Santa Teresita Hospital to Drop Medi-Cal Pact

Officials at Santa Teresita Hospital, saying they have lost millions of dollars treating Medi-Cal patients, have announced that they will drop out of the program effective Aug. 1.

The 283-bed hospital is reimbursed by the state for less than half of what it costs to care for its Medi-Cal patients, hospital Administrator Michael Costello said. As a result, Costello estimates that the hospital lost $1.1 million caring for Medi-Cal patients last year alone. The hospital’s controller said Medi-Cal payments have fallen short by more than $4 million since 1986.

Santa Teresita notified the state Department of Health Services last week that it will leave the program; a 120-day notification is required.

Santa Teresita’s decision to drop out leaves the San Gabriel Valley with 11 acute-care hospitals under contract to treat the area’s estimated 60,000 Medi-Cal patients, state officials said.

It is the fourth local hospital to terminate its contract since 1988.

“We have no alternative,” Costello said. “It is impossible to provide care and be paid less than the cost to deliver that care.

“We want to provide for them but we just cannot afford it,” Costello said of Medi-Cal patients, who comprise 20% of Santa Teresita’s clientele.

After Aug. 1, the hospital will treat Medi-Cal patients only in emergencies, such as critical illness or advanced stages of childbirth, he said.

When California began its Medi-Cal contract program in 1982, 17 general hospitals in the San Gabriel Valley signed up, state officials said.

In addition to the four hospitals that have since dropped out, two others have closed--one in 1984, the other in 1985.

State officials said the remaining hospitals should be able to absorb Santa Teresita’s Medi-Cal patient load.

“I don’t think Santa Teresita’s decision to drop out of the Medi-Cal program will have a major impact,” said Darryl Nixon, Los Angeles representative for the state Department of Health Services.

Medi-Cal officials maintain that hospitals should be able to properly care for Medi-Cal patients with the money allocated under their contracts.

“(Hospital officials) exaggerate the cost,” said Mike Murray, executive director of the California Medical Assistance Commission, which negotiates Medi-Cal contracts with hospitals. For instance, he said, some hospitals tell the state it costs $2,000 a day to care for a Medi-Cal patient, when in fact the sum is just a “wish list” figure.

Medi-Cal pays hospitals an average of $602 per day per patient, according to the commission’s annual report, published in January.

However, hospitals spend an average of $1,007 per patient per day, according to the California Assn. of Hospitals and Health Systems, a hospital advocacy group.

Lori Aldrete, director of communications for the hospital group, said Medi-Cal “doesn’t come anywhere near paying the cost.”

In 1989, California hospitals lost $3.1 billion in unpaid care, including Medi-Cal and Medicare shortfalls as well as the cost of treatment provided to patients without insurance, Aldrete said. She said the Medi-Cal shortfall alone was $1.2 billion.

“We are seeing more hospitals hesitating to signing a contract,” she said. “The government just isn’t keeping up with the rising costs, so hospitals are falling deeper and deeper and losing more and more each year.”

Even though 11 San Gabriel Valley hospitals will continue to accept Medi-Cal, some patients and health officials are concerned that if the current trend continues, more hospitals will be squeezed out, at the expense of low-income patients.

“This is a vicious circle,” said Patricia Luna, 43, whose granddaughter was recently hospitalized at Santa Teresita after she developed a high fever. “The poor don’t have a voice so they’re pushed aside.”

Luna, a Monrovia resident who works as an accounting clerk in Pasadena, has been taking care of her 9-year-old granddaughter, Skye Howell-Luna, whose mother died six years ago. As part of a government-funded adoption assistance program, Skye is entitled to receive Medi-Cal until she is 18.

The hospitals that will continue to accept Medi-Cal in the San Gabriel Valley are: Covina Valley Community Hospital, Garfield Medical Center in Monterey Park, Greater El Monte Community Hospital, Huntington Memorial Hospital in Pasadena, Monrovia Community Hospital, Monterey Park Hospital, Pomona Valley Hospital Medical Center, St. Luke Medical Center in Pasadena, San Gabriel Valley Medical Center in San Gabriel, Valley Hospital in Pomona and West Covina Hospital.

Santa Teresita’s decision to drop out of the Medi-Cal program comes at a time when the San Gabriel Valley is experiencing a collapse in its trauma care system. Huntington Memorial officials, citing a $3.7-million loss last year, announced that they will close the hospital’s trauma center, the last in the valley, on May 1.

“The problem is that the patients are getting sicker and sicker and the resources for them are getting smaller and smaller,” Huntington Memorial spokeswoman Peg Kean said. “Health care just hasn’t received the attention it needs, and the patients are caught in the middle.”

Kean said the hospital has the facilities to accommodate some of Santa Teresita’s Medi-Cal patients now but worries that the hospital may not be able to treat the patients indefinitely. Kean said Huntington is also receiving inadequate reimbursement from the state.

“I can’t speak for another hospital, but I can certainly understand (Santa Teresita’s) financial problems,” Kean said.

Costello, meanwhile, worries about the future of medical care in California. “This is a tragic time that affects all of us because you never know when you’ll be an indigent patient,” he said. “There used to be a time when hospitals were all things to all people . . . no more.”