Peace Talks Have Begun in 7-Year Hospital War

The bitter Measure O campaign behind them, Ventura County and Community Memorial Hospital officials have quietly begun talks to end a seven-year hospital war and bridge the gap between the county’s public and private health-care systems.

Just a month after Community Memorial lost a $2.3-million campaign to wrest $260 million from county government, both parties are reaching out with words of peace, although a proposal to expand the county-run HMO has already created new tensions.

Community Memorial--located just two blocks from the rival public hospital, Ventura County Medical Center, in Ventura--hopes to work with the county on a host of thorny issues, including earthquake retrofitting, distribution of tobacco settlement money and perhaps a merger of the two hospitals.

County Chief Administrator Harry Hufford confirmed last week that he has begun preliminary talks with a CMH representative, and Community Memorial Executive Director Michael Bakst said Friday that the parties want to develop an agenda so they can begin to meet in earnest.

Hufford said most of his bosses on the county Board of Supervisors have asked him to pursue “a more rational process for working together.” And newly elected Supervisor Steve Bennett, who takes office in January, has made ending the hostilities one of his top goals.

“There’s a grand opportunity right now for improved relationships and to deliver better health care to the community,” Hufford said. “I’ve talked with someone who represents CMH, and we’re trying to figure a way to work together. . . . I’d love to figure out an end to these hospital wars.”

Bakst said he hopes the early contacts will lead to a long-term easing of tensions between the two hospitals, rivals since miserly managed care insurance contracts made them so nearly a decade ago.

“We are all tired of the hospital war issue,” he said. “In the aftermath of the election . . . we saw an opportunity to sit down and work things out.”

Not that an end to the county-Community Memorial hospital war will come easily.

Even as Bakst embraced detente, he said a new proposal by Supervisor Frank Schillo to include the uninsured working poor in the county’s health-maintenance system could sabotage peace talks if private hospitals are not part of the plan.

“Anything short of including the private sector in this HMO expansion could precipitate some of the problems we’ve experienced in the past,” Bakst said. “The hospital disagreements will erupt one more time.”

Indeed, the county and Community Memorial have tried to compromise before.

The parties talked peace in 1998 after Community Memorial proposed merging the two hospitals into one regional medical center to save millions of dollars on state-mandated earthquake readiness.

But talks stalled, then ended, as new hostilities flared last spring when Community Memorial began its Measure O campaign to wrest control of $260 million in tobacco settlement tax money from county government and give it to private hospitals. Community Memorial argued that county supervisors could not be trusted to spend the money on health care. Voters rejected the initiative by a 2-to-1 margin.

Taking an adversarial stance in 1996, Community Memorial also spent $1.6 million on a ballot initiative that killed a $38-million county hospital expansion.

The private hospital was concerned that its public neighbor was using taxpayers’ money to compete for patients. Community Memorial said it lost hundreds of patients when the supervisors set up a low-cost HMO for county employees.

The scope of the county’s outreach plan stretches beyond the two historical combatants--Community Memorial and the county--to all eight general hospitals in Ventura County, Hufford said.

Panels Formed for Sharing Tobacco Funds

A week before the Nov. 7 election, county supervisors undercut Measure O by pledging to share the $10 million a year it receives in tobacco money with private health organizations.

Now, the county needs to determine precisely which hospitals and what agencies will receive a piece of the windfall, Hufford said. Two committees have been formed, he said.

“There have been conversations by me and members of the board with probably every [local] hospital,” he said. “We really started this process last spring, before Measure O put it on a back burner. Now we’re picking it up again, and board members are part of the process.”

But negotiations between Community Memorial and the county are at the heart of the matter, since the Measure O campaign showed how their disputes can divide the greater health-care community.

Hufford said one area of potential cooperation is costly seismic retrofitting, because Community Memorial and the county both need to upgrade their hospitals by 2008, as required by state law.

“That is a specific [issue] to cause people to think about where we’re going and how much money the community is willing to pay for facilities,” he said.

Bakst, who proposed merging the two hospitals in 1998, said that both would have to borrow big money to reconstruct their hospitals--and Community’s price tag alone will range between $50 million and $65 million.

“We’ll have to look at working together,” Bakst said. “From a business perspective, it would seem to make sense to do it. . . . Maybe the time is right to look at merging the two systems.”

County officials have said that retrofitting of the four-story county hospital would cost only $2 million to $5 million. But Hufford said recent estimates are “substantially more” than that.

Founded in 1901, Community Memorial’s current facility was built in phases--in 1967, 1974 and in the 1980s. At least the first phase would require substantial reconstruction, officials have said.

Most of the existing county hospital building, which opened in 1921, was built decades ago, although a wing where about half its patients are housed was constructed in the mid-1980s and probably would require little seismic reinforcement, officials have said.

Supervisors Frank Schillo and Judy Mikels supported a merger in concept two years ago. But in talks in 1996 and 1998, both sides accused the other of refusing to bargain in good faith. Discussions broke off.

Then this year, in the midst of the Measure O campaign, Supervisor John K. Flynn accused the private hospital of trying to stage a “hostile takeover” of the county health-care system. “They’ve got a gun to the county’s head,” he said. Anger only rose after that.

Since Measure O’s loss last month, Community Memorial has turned mostly cooperative again.

Bakst said that would have happened even if his hospital had won. Either way, he said, the ballot measure focused public attention on health care and created a climate in which all parties now want to work together.

“So you couldn’t have a better time frame established than we do now,” he said. “The agendas are clear now.”

How Friendly Hospitals Became Fierce Rivals

With a new joint county-Community Memorial medical center, the two hospitals could resume the genial relationship they shared until managed-care insurance contracts drained them of revenue.

Until the early 1990s, the two institutions peacefully coexisted as neighbors in central Ventura, the county hospital ministering to the poor and the nonprofit community hospital treating the rest.

There were occasional disputes over how two large hospitals so close together should divvy up medical services. But the same doctors worked at both, and they shared expensive equipment.

But then the county hospital system began to change and expand. It added clinics throughout the county, supervisors pushed construction of the new hospital wing and the county ended part-time contracts with 15 to 20 physicians who had worked at both hospitals and hired its own full-time doctors.

Community Memorial saw the reworked county system as a competitor and opened new clinics itself to grab the most lucrative part of the county’s poverty health business, pregnant women covered by Medi-Cal.

Currently, dozens of beds at both hospitals are empty on a typical day. Both maintain costly intensive-care units for newborn babies. Both buy expensive diagnostic equipment. And each contracts separately for basic services and supplies that could be bought for less collectively. Community Memorial makes a small operating profit and the county hospital drains millions of dollars from the county general fund each year.

Hufford said it’s time to consider Community Memorial as the good citizen it has been for most of its history.

“Community has taken these adverse positions, and in some areas that has made them appear to be hostile takeover folks,” Hufford said. “But in the long term, a lot of people have given a lot of time and money to CMH, and it’s an important part of this community.”

Hufford noted that other longtime adversaries have found peace.

“Some groups have been hostile to each other for 1,000 years and they’re trying to negotiate a relationship,” he said. “Well, we certainly ought to give it a try too.”