0920_September Comstock's Magazine September 2020 | Page 42

HEALTH CARE aniel Wolcott, president and CEO of Dameron Hospital in Stockton, was walking a corridor on the COVID-19 floor in early July when he encountered a fully outfitted nurse: gown, N95 mask, face shield. He asked how many times she changed her gear during each 12-hour shift. It was every hour or two — eight or nine new sets of personal protective equipment each shift. It reminded him of the courage of those holding the line on the coronavirus crisis. “Out of a 12 hour-shift, a nurse is staying in this very hot and sweaty PPE equipment for probably eight to nine hours out of the 12,” Wolcott, also president of Adventist Health Lodi Memorial, says. It illustrates something else too: what the pandemic has done to hospital finances. New requirements and soaring prices ballooned PPE costs per patient per day from an average of 35 cents pre-pandemic to almost $26 in April, according to the Society for Healthcare Organization Procurement Professionals — a more than 7,300-percent increase. That’s not all: The pandemic has forced hospitals to invest in clinical equipment, technology and infrastructure for telehealth visits, ventilators and empty beds to accommodate surges. The Capital Region’s hospitals are the lifeboats against the repeated swells of this coronavirus. The biggest systems are being hit with huge losses. Sutter Health, which runs eight hospitals in the Capital Region, reported that in April alone it lost $168 million, or 19 percent below break even — even with factoring in $200 million in federal bailout money. Kaiser Permanente, which operates six hospitals in the Capital Region, posted a $1.1 billion loss for the first quarter. But experts say it’s not those big systems whose survival is at risk. It’s smaller, independent hospitals like 200- bed Dameron. If it and others go under, it would leave holes in health care systems at a time when coronavirus has been surging. Their failure would also drain much-needed jobs and spending out of the region at a time of economic crisis. Hospital closures outside major metropolitan areas can be bad news for health and the economy. Distance to “If we’re not able to get Dameron turned around to the place where Adventist Health believes it can be successful over time, then Adventist Health can’t afford to just acquire a failing hospital. … Stockton could potentially lose a community asset that provides choice for half a million people.” DANIEL WOLCOTT PRESIDENT, ADVENTIST HEALTH LODI MEMORIAL PRESIDENT AND CEO, DAMERON HOSPITAL hospitals matters for survival. An August 2019 National Bureau of Economic Research study of 92 hospital closures in California found that rural hospital closures increased inpatient mortality by almost 9 percent. Hospital shutdowns also have economic impacts. A 2004 study found that the closure of the sole hospital in a community cuts per-capita income by 4 percent and increases the unemployment rate by 1.6 percent. Dameron is San Joaquin County’s fourth-largest private employer. Marshall Medical Center in Placerville, another independent hospital that also has several outpatient clinics, is El Dorado County’s second-largest employer. Two hospitals in Nevada County — Tahoe Forest Hospital and Sierra Nevada Memorial Hospital — are among the five biggest employers there, public or private. ‘Tweeners’ in jeopardy The crisis has shredded hospital budgets. Nationally, April was the worst month ever for hospitals financially. Even before the pandemic, nearly 40 percent of California hospitals had negative margins, according to a May report by health care consulting firm Kaufman Hall. Now they’ve seen possibly permanent reductions in the number of nonurgent but often important elective procedures — almost a quarter of Americans said they’d wait a year or longer to schedule an elective procedure in a hospital, and one in 10 said they would not reschedule at all. That matters because elective procedures — say, back surgeries and heart procedures — are “where hospitals and surgical practices make all their money,” says Bert Orlov, director of the health care consulting group at EisnerAmper, which has an office in Sacramento. “The revenue loss from COVID-19 for California hospitals is devastating, presenting a financial shock never before felt and likely reshaping the future healthcare landscape,” Kaufman Hall’s report says. Area health care experts say the bigger hospital systems will survive because they have reserves and willing creditors. The smallest also may do fine — a few rural hospitals like Tahoe Forest are designated as “critical access” and get extra help from the federal government. So those most at 42 comstocksmag.com | September 2020