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EXCLUSIVE: Fallbrook Hospital, healthcare district seek solution to sustain services; CHS subsidiary gives 130-day notice

Thursday, June 19th, 2014
Issue 25, Volume 18.
Debbie Ramsey
Managing Editor
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Change is coming to hospital-based healthcare in Fallbrook, and that will happen sooner rather than later, according to an announcement made June 12 to the Village News by Fallbrook Hospital Corporation (a subsidiary of Community Health Systems) and Fallbrook Healthcare District.

"The operation of Fallbrook Hospital, as it is currently, is not viable, not sustainable for the long term," said hospital CEO Kapua Conley. "We need to be more amenable to the times and the hospital is working collectively with the healthcare district to see what can be changed here for the long term."

According to Stephen Abbott, president of the Fallbrook Healthcare District, the district's contingency plan showed a loss of $5.8 million for last fiscal year and $4.5 million the year prior.

The reason for the shortfall and the need for change is due to three factors, they said.

"It's been a domino effect," said Conley. "There are three things that have crippled the operation and accelerated the need for change. First, healthcare reform (Affordable Care Act) has led to reduced healthcare payments from both federal and state sources, yet our costs have remained the same. Second, we now have competition from three new hospitals in the area (Palomar, Temecula Valley, and Loma Linda). Finally, we have experienced increased penetration of managed healthcare in our community." Some medical groups with large numbers of managed care cases have been redirecting patients out of Fallbrook to other providers for tests and treatments.

"All of these things have happened in the same, relatively short period of time," said Conley.

"The reality is that insurance carriers are driving the bus," said Vi Dupre, administrator of Fallbrook Healthcare District.

Conley said what Fallbrook needs to do is to "align its model with what the payers' (insurance/medical groups) are today. "Because right now we are at the bottom of the totem pole when it comes to receiving those managed care patients," he said.

Since the process of seeking and securing the right kind of change is just beginning, there are no specifics to share with the community yet.

"The most important thing for the community to know is that we are working together on this and the hospital is fully operational," said Conley. "The one thing that is definite at this point is that how we operate right now has to change."

Abbott said in terms of the healthcare district's financial position, "We collect approximately $1.5 million annually. Of that we award approximately $500-600,000 annually [in grants] to numerous healthcare programs throughout our community, and invest approximately the same amount into our 'lease termination contingency fund'. Presently we have $9.5 million in reserve, much of which is set aside for non-depreciated capital improvements and unused prepaid rent."

"Doing the math on income and investments versus expenditures, it's pretty clear that the present model is unsustainable, which our consultant validates in the contingency plan," said Abbott. "So, even if we could spend every nickel we had, we would be completely out of cash in less than 18 months, and we would still need to reimburse FHC (CHS) for unused prepaid rent and non-depreciated capital assets, which are numerous."

Abbott said the district had recently updated it's contingency plan in the event something like this occurred. In that plan is a list of other healthcare organizations that might be sought out to provide services in the Fallbrook market.

The potential affiliation partners suggested in Fallbrook's contingency plan include:

*Universal Health Systems – currently operates Temecula Valley Hospital, Inland Valley Medical Center, Rancho Springs Medical Center, Corona Regional Medical Center, and Surgery Center of the Temecula Valley.

*Loma Linda University Medical Center (LLUMC) – currently operates LLUMC, LLU Murrieta, LLU Children's Hospital, LL Behavioral Medicine Center, LL Heart & Surgical Hospital.

*Scripps Health – currently operates Scripps Green, Scripps Memorial La Jolla, Scripps Memorial Encinitas, Scripps Mercy, Scripps Clinic, Scripps Coastal Medical Center, and specialty centers.

*Tri-City Medical Center

*Palomar Medical Center

*UC San Diego Health Systems

*Sharp Health System

The plan, the group said, is to approach these entities and see what interest there might be in operating a share of the services currently offered by Fallbrook Hospital.

"One entity could want to come in and operate multiple items or various providers could result," said Abbott. "We need to see what they feel are opportunities for them."

Above all, both Fallbrook Hospital Corporation (CHS) and the Fallbrook Healthcare District want residents to know the hospital is still open and operational.

"We are still delivering great, quality care; there is no impact at this time on that," said Conley. "As things change, we will be very transparent and allow time for people to make transitions. We are prepared to share all information we have with prospective organizations."

Dupre said the transparency factor is very important since "entities will need information about the current hospital operation, the physical plant, etc. to develop ideas and proposals."

Whether or not Fallbrook Hospital Corporation (CHS) will continue to be in the healthcare provider mix under the new structure remains to be known.

"It's too early to tell," said Conley. "We want to come up with a solution. We want to be open-minded."

All parties involved in seeking a solution agreed that some members of the public will view the situation negatively, while others will see it as a positive move.

"It's easy to gravitate toward the negative aspect of this, but after looking at reports, there is definitely tremendous opportunity here to enhance healthcare," said Conley.

Conley said Fallbrook's situation is not unique in America's small community hospitals today, but what is different is the community's support organization.

"Fallbrook is not the only community going through this, but Fallbrook has a healthcare district and many do not," he said. "That is a definite benefit."

Abbott agreed that the Fallbrook community has strengths not found elsewhere.

"This community has supported this hospital for 15 or 20 years longer than the fate most community hospitals have experienced in this county," said Abbott. "There is enough to build on here." And with the growth coming to the Interstate 15 corridor area of Fallbrook, all agreed that the demand will do nothing but continue to grow.

While change is coming to Fallbrook, the overall medical care landscape in San Diego County has seen many changes and additions over the past few years.

"Affiliations have been happening regularly and successfully in the San Diego County market in recent years," said Conley. "We want to collaborate with others, instead of viewing everyone as competition. We have to change with the times."

To formally begin the process of finding a solution, Fallbrook Hospital Corporation (CHS) followed the procedures outlined in their 30-year lease with the Fallbrook Healthcare District, which began 16 years ago in 1998. On May 21, it notified the district that it wishes to close several of the core services at the hospital in a period of time not to exceed 130 days, unless the district could assume financial responsibility for the losses associated with providing those services.

The services marked for closure would include: obstetrics (labor and delivery birthing rooms), surgical services (general, gynecological, kidney, ophthalmologic, orthopedic, pediatric, plastic, podiatric, and urologic), anesthesia services, endoscopy procedure services, laboratory services, radiology services, pharmacy services, and emergency services (emergency communication systems, emergency room services, and orthopedic emergency services).

While a new affiliate could potentially assume all operations, it could be that a variety of entities choose to specialize in offering services locally. "Those could include a stand-alone emergency room, comprehensive urgent care, ambulatory surgery center, dialysis center, acute care rehab, psychiatric facility, imaging center, etc.," said Abbott.

According to Dupre, "It is Fallbrook Healthcare Districts intent to keep the public informed as regularly as possible, mindful of the fact that some of the initial discussions regarding services to other operators will need to be conducted confidentially."

"Although we don't know what the future looks like, there will be something viable for the community," said Abbott. "I don't think there will be a padlock on the door in 130 days. The question is just the timing of all the new plans and the transition."



Comment Profile ImageJustwomdering
Comment #1 | Thursday, Jun 19, 2014 at 8:23 am
Please note the first reason being..the affordable care act.(.I'd love to see Me Mondays comment regarding this.,as I do think he was a staunch supporter of the plan) The affordable care act..what a failure! Perhaps insisting that people actually pay for their visits would be a good idea as well..not using the ER as a doctors office?..and not allowing non citizens use unless payment received before being seen( those of us with insurance have to do..called a co pay) five years ago we saw this coming as this hospital doesn't have all the updated equipment and technology that newer facilities have.when it comes to health are people shouldn't have to"settle"hopefully something can be resolved as Fallbrook does need a good viable facility..perhaps like GM they need to wipe the slate and start over...
Comment Profile ImageDon
Comment #2 | Thursday, Jun 19, 2014 at 10:28 am
First off, if there is any truth to the claim that the ACA has reduced payments it's because of mis-management. Everyone in this community need to look into what I have heard are ongoing federal and SEC investigations into the company that is REALLY running our local hospital, CHS or Community Health Systems.

There's no such thing as the "Fallbrook Hospital Corporation", we need to push the Healthcare District to ditch this horrendous company from Tennessee and affiliate with a local provider like Tri-Cities that actually cares about our community.

Comment Profile ImageBBart
Comment #3 | Thursday, Jun 19, 2014 at 2:11 pm
Re: ACA ... just 2 months ago the right wing in this forum was complaining bitterly about federal provisions to compensate healthcare entities for excessive losses during the transition. Now we hear - hopefully not from the very same neighbors - that the uncompensated reductions are worthy of further hand wringing.
How many places on earth are there where a heart attack victim is a half hour drive from the nearest ER? Not anyplace where the community recognizes that health maintenance is recognized as a communal value.
Comment Continued : The comment above was written from the same location.
Post Continued
Comment Profile ImageBart
Comment #4 | Thursday, Jun 19, 2014 at 2:22 pm
re: "people actually pay for their visits...". My annual income would cover 1 day in ICU not counting the saline solution or the radiologist. That's why we have insurance - it spreads the risk, so that we all can pay share of the aggregate cost, which we All hope wil not befall us individually but which we know will befall some of us as a community. If the medical industry sometimes uses the opportunity to profiteer from such a system, that is deplorable but it is not fair to say that the existence of an insurance system is the culprit.
Comment Profile ImageFrustrated
Comment #5 | Thursday, Jun 19, 2014 at 3:14 pm
The surrounding "New" facilities were not built in a day. Why has it come to this drastic measure. Where and why was there not the planning 3-5 years ago? Too many band aids, for too long. Now the community with possible loss of jobs, loss of convenient care within our community and a general distrust is surrounding the facility. Internal steps should have been taken years ago to maintain the viability of the hospital to keep patients and doctors coming to Fallbrook Hospital.
Comment Profile ImageJustwondering
Comment #6 | Thursday, Jun 19, 2014 at 5:03 pm
Re statement regarding those of us who pay was to include insurance coverage...but if you'd delve further,and perhaps we as a village could request it..a break down of exactly how much medical care is provided to those who do not pay..either indigent or simply can't afford it,because some one is covering the the ones who are paying big premiums...I was in an insurance meeting this morning ..there is someone paying out of their pocket for every person getting a subsidiary...and definately...this didn't happen overnight...
Comment Profile ImageERIN
Comment #7 | Thursday, Jun 19, 2014 at 5:06 pm
Well, on the good side. When the hospital closes. Fallbrook will have the largest Robertito's in the country.
Comment Profile Imagegrunt
Comment #8 | Thursday, Jun 19, 2014 at 5:25 pm
Bart, you either missed Justwondering's meaning, or you changed it. "Using the ER as a Dr's office" does not equate with ICU. Health Insurance should be like automobile insurance. YOU take care (pay for) normal maintenance (routine visits, check ups, contraceptives) and then when hit with ICU's the cost is then covered by insurance. Why should someone be able to go to the hospital for a cold and have the rest of us pay? Health costs and insurance costs would go down drastically is insurance paid for outside the norm cost only. Also, wish the hospital would publish it's cost in providing non-emergency care provided in the ER especially for illegal aliens (or what ever PC term is used). Then in my perfect world, the US government would reimburse Fallbrook with monies deducted from aid to Mexico (starting with our support for thier very effect border control).
Comment Profile Imagewe pay and pay
Comment #9 | Thursday, Jun 19, 2014 at 8:18 pm
some of our property tax dollars collected are paid in grants by this district to places here that provide more free services to the same people who live off every other government handout and get freebie care at the hospital. why are we paying double for these people? really stupid use of our money.
Comment Profile Imagebarth
Comment #10 | Friday, Jun 20, 2014 at 2:14 pm
Using the ER as a doctor's office is a desperate last resort for those with no other resources (including those with no insurance). ACA is aimed exactly at this problem.
Comment Profile ImageFallbrook resident
Comment #11 | Friday, Jun 20, 2014 at 5:26 pm
Fallbrook Hospitals reputation is not that great. People rather make the drive to go anywhere but here. They don't have all that's needed for serious situations and end up transferring patients anyways. Might as well save all the hassle and go elsewhere.
Comment Profile Imagegrunt
Comment #12 | Friday, Jun 20, 2014 at 6:28 pm
Barth, you, like Obama, go to the extreme. "Just wondering" says Dr. visit and you go worse case ICU. Mention using ER as a doctors office and you immediately go "desperate last resort". ACA will 1) destroy health care (look no further than the government run VA. 2) bankrupt health care professionals (look no further than this article 3) bankrupt counties, states and the nation. The vast majority of people that use the ER for a doctor's office are using their FIRST resort; I believe that even the illegals spend more on auto maintenance than their own health care. Insurance should be for OUTSIDE THE NORMAL, UNEXPECTED, AND CATASTROPHE health care. Why should insurance pay, for example, for birth control or birth enhancement? Pay for it yourself or don't play. Socialism which is where we are headed has not worked, granting the government control has not worked and socialist countries live far worst than we. Look at most of them - our "poor" have bigger living quarters and more "stuff" than their middle class.
Comment Profile ImageJH
Comment #13 | Friday, Jun 20, 2014 at 9:13 pm
Reading your article about Fallbrook Hospital reminded me about something that happened a couple of years ago. My wife broke her arm and went to another hospital emergency room in San Diego County. They examined her, make X-rays and sent her to another branch where they had better orthopedic care. Less than a year later i fell and fractured my elbow. I made the mistake of going to Fallbrook Hospital where I had to wait, was examined and X-rayed by what looked like one of Roentgens original X-ray machines (he invented X-rays over a century ago.) The personnel at Fallbrook Hospital took only 15 minutes or so to examine me.
I was flabbergasted to get a bill from Fallbrook Hospital for three-times what the other hospital billed us! It was even worse when I found out I was stuck paying that outrageous bill out of pocket!
Being a scientist by training, I decided to find out more about this hospital and the people who run it. Let me share with you what I found out about the company that manages Fallbrook Hospital.
Community Health Systems is about a $20billion dollar company that runs 208 hospitals in 29 states and makes over $500million profit doing it. (Those numbers are approximate because they acquired Health Management Assoc. in January for about $3.9billion to become the largest for-profit hospital management company and Ive tried to add the two companies numbers from 2012 annual reports.)
The boss at CHS, Wayne T. Smith, makes about $8.8million per year, about twice the annual losses at Fallbrook Hospital.
If you look up CHS and HMA on Wikipedia, you will get a interesting view of them.
Workers at one hospital acquired by CHS claimed that workload increases, slashed benefits, and staff reductions had lowered the quality of both patient care and quality of life for employees. and Currently it is being accused by Tenet Healthcare of overbilling Medicare in its aggressive admissions policy compared to its peers. It was subpoenaed by Medicare on its aggressive billing to the Medicare systems
HMA is even more interesting. In 2012, the CBS show, "60 Minutes," interviewed over 100 former employees of HMA. These former employees criticized HMA of implementing unethical for-profit measures. and earlier this year The New York Times reported that the Justice Department had joined eight separate whistle-blower lawsuits against HMA in six states. The lawsuits alleged a wide-ranging strategy that attempted to inflate HMA's payments from Medicare and Medicaid by increasing hospital admissions. The Justice Department accused HMA of admitting patients to hospitals regardless of whether they needed hospital care and pressuring doctors to admit patients to the hospital. The NY Times article said HMA posted daily scorecards for emergency room doctors showing who met daily goals for emergency room admissions.
I have looked at other issues also - drug companies in particular. What I have concluded is ..
We do not have healthcare in America any more, we have a for-profit medical business
Comment Profile Imagekma
Comment #14 | Friday, Jun 20, 2014 at 9:53 pm
When was the last time you ppl checked your area's demographics? The comments on here make Fallbrook seem like a town of racists!? Reality is Fallbrook is a town where more than HALF the kids in the local public schools eat FREE breakfast and lunch! I had an MRI at Fallbrook hospital in a semi truck in the parking lot. The machine was filthy...! I was billed almost $3k for that MRI?! The next MRI I had was in a facility in Encinitas and cost $400 cash?! Seems like the hospital's losses might be a bit inflated?!
Comment Profile ImageMy experiences
Comment #15 | Saturday, Jun 21, 2014 at 11:06 am
The complainers can get all their digs in but I have had excellent care at Fallbrook Hospital and so have my family members. The emergency doctors have done a great job for us over the years and we have been happy to have such kind nurses who really did their best to make us feel comfortable and well cared for. I have also had 2 surgeries and other family members have had surgeries also. To each their own, but we've been really happy. I hope a good solution is found because I don't want to lose our local hospital services.
Comment Profile ImageBarney
Comment #16 | Saturday, Jun 21, 2014 at 1:11 pm
Have to agree wholeheartedly with My Experiences. Fallbrook Hospital on three occasions found issues that the "big boys" couldn't after visiting them first. Two of them would have had life-threatening issues had they not been found when there were. While it's true they don't have the most up-to-date facilities, they are small and can handle only certain cases, they have the most caring staff who take the time to listen to the patient and use their knowledge to figure out the problem. Bottom line, however, is that people will always have less than stellar experiences with doctors and hospitals, no matter the size or reputation.
Comment Profile ImageLucky
Comment #17 | Saturday, Jun 21, 2014 at 7:47 pm
I believe Fallbrook Hospital's lack of proper care actually caused my father's death; and, their horrible treatment of my head injury nearly killed me.
How can anyone in their right mind think this is a hospital that could give emergency care? And, yes, the bills were totally two to three times that of a real hospital. A good friend of ours nearly severed his thumb in an accident. After getting so-called ER care, he followed up with his dog's vet and received superior care.

VILLAGE NEWS NOTE: Lucky, we are unable to approve the other comments you have made as you would have to provide a link to a complaint filed with the state regarding your father's and your treatment situations. If you would like to provide the link, we can do that. Certain specific comments like those and regarding your friend would have to have support information (third party) in order to approve. Thank you. Debbie Ramsey
Comment Profile ImageTrent
Comment #18 | Sunday, Jun 22, 2014 at 10:12 am
Welcome to Obama's scorched earth politics plan to create a Socialist country. His ACA is the perfect beginning to cripple the "greedy" capitalist ways. Forcing The rich and middle class to pay for all the people stuck in growing lines for there free goodies. As the healthcare providers crash and burn, and more and more people get tossed in the begging group, Obama grins. "My plan is working"..."Soon they will have no choice but to adopt my plan." "Now, let me think, If I open up the borders, all these extra immigrants will expedite the crisis that much sooner." "The perfect One, Two punch!" "Lets see, invitations sent to South American countries, check. Change Border patrol policies and punish any rogue agents trying to enforce the law, check." Obama laughs as he envisions taking all the money from the upper and middle classes and stuffing it all into a giant Pinata hung high next to the border. With Obama's disregard to this country's own laws, he has created this massive drive to eliminate the middle class. Destroying the economy, jobs and the American dream. In his mind all of these new immigrants will thank the Obama polices and become life-long Democratic supporters. Maintaining the new "friendlier" America. Since the only way to change in this country is by voting, Obama has that covered also. By opening the border and offering amnesty for "new Americans" to vote, he has diluted the oppositions vote. With so much national debt and millions of welfare recipients, even a 2 term Republican Presidency may not be able to repair the damage. That's why its referred as scorched earth politics. His "Trickle-up" economics policies will punish future generations of Americans, and punish anyone daring to step out to become middle class. Our grandfathers spoke about the Great Depression, well this is your story for the next few generations.
Comment Profile ImageRuth Noyes
Comment #19 | Monday, Jun 23, 2014 at 12:18 am
I would like to say I am sorry to hear the less than pleasant experiences listed about Fallbrook Hospital with regard to the care given.
Since my own experience with the doctors there has been just the opposite, I do want to publicly state, since I don't know if I can name names here yet will on request, that my time at Fallbrook was awesome.
One doctor saved my friend Randy's life by identifying a life threatening issue immediately, my son in law had gone in for a severe headache and that was diagnosed immediately and correctly as a life threatening issue as well, my daughter had a leg pain, that turned out to be a blood clot that was caught moments before blowing, which is what killed her older brother, as a patient advocate, I took in a patient and the ER Doctor was clearly honest with her, she became sober within months and now will probably live a good long life because of his care and his honesty and finally, while in Oceanside where I once worked as an MA, I had a horrible headache, Tri City said I was going to die within seconds and I left deciding it would not be there. I came to Fallbrook and the ER Doctor said my blood pressure went up because I had a cavity that decided to show and I was overweight. Twenty years later and I still wonder what treatment Tri City would have provided. That being said, there is ONE doctor there if I were on death's door, I would not let near me. So, I can see both sides yet want the good to be heard as well and that is all I am saying.
Comment Profile ImageReality Checker
Comment #20 | Monday, Jun 23, 2014 at 11:20 am
I'm so glad I was smart enough to join the military and retire with Tricare Health Insurance. It's portable, fairly dependable, affordable, with plenty of good doctors to choose from. I had to sacrifice the best years of my life, and my health, but dog gone am I happy I don't have to get stuck with Obozo-Care.
Comment Profile ImageThomas S.
Comment #21 | Wednesday, Jun 25, 2014 at 12:55 pm
Those who have still not yet seen through Barack Obama will have many more opportunities to do so in 2015 when the employer mandate kicks in (unless Obama chooses to play dictator again and change the plain language of the law with a speech or a blog post) tens of millions of Americans will be kicked off their current insurance plans because of the unsustainable cost the requirement to provide insurance would place on employers. Obamacare is resulting in exactly what the opponents -labeled crazy, evil or Racist said it would. More than five million million have already lost their plans, millions more will lose their plans and doctors when the employer mandate kicks in.
Comment Profile ImageNanette P.
Comment #22 | Friday, Sep 5, 2014 at 3:27 am
Fallbrook is a wonderful Community hospital, as a small community hospital they can not offer all the services that the bigger hospitals offer. communities need education as to where they should seek care in case of a stroke or heart attack...not all hospitals are equal
Comment Profile ImageYesenia
Comment #23 | Tuesday, Sep 16, 2014 at 8:46 am
Sad. This hospital is an awesome hospital. The nursing staff are welcoming, friendly, knowledgeable, and very professional. I used to work there as a nurse.
Comment Profile ImageTammy T
Comment #24 | Friday, Oct 31, 2014 at 9:38 am
Fallbrook hospital closing is a big lost for Fallbrook community. We need their services.
Comment Profile ImageKarin
Comment #25 | Thursday, Nov 13, 2014 at 8:04 pm
It's about time they close Fallbrook Hospital. I almost lost my life due to poor quality care received by the nurses, my ob-gyn, and other medical drs. in ICU. I was naive to be believe in receiving good care in Fallbrook. Thankfully the ob-gyn lost his license!! After surviving my ordeal at the Hospital, a friend told me it was common knowledge in Fallbrook that whenever someone has an emergency in Fallbrook you head straight to the Hospital and then make a quick right out of town!! It should have been shut down a long time ago.

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