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