Hospitals Struggling to Qualify for Funds

As election day draws near, just three private hospitals qualify for $260 million in tobacco funds, while others are busily juggling their numbers to cash in on the financial windfall if Measure O passes in November.

The biggest hospital not qualified for any money this year is St. John’s Regional Medical Center in Oxnard. But backers of Measure O said Friday that is temporary.

“I will guarantee you a year of my salary that if Measure O passes, St. John’s will qualify,” said Michael Bakst, executive director of Community Memorial Hospital and sponsor of the measure. “They have to qualify; there is no way they can’t qualify.”

But on paper they don’t even come close.

In order to share in the estimated $10 million a year for the next 25 years, private hospitals must have 360 “self-pay” patient days annually. That means a hospital must treat about one uninsured person a day for a year. The figure was devised by Community Memorial administrators who say it is easy for the public to understand and a good way to judge how much uninsured care a hospital delivers.

The first payments to hospitals will be based on the uninsured care provided in 1998.

In that year, St. John’s had just 37 self-pay days despite treating the most uninsured and indigent patients of the county’s seven private hospitals, state data show. The publicly funded Ventura County Medical Center, the county’s largest provider of health care for the poor and uninsured, is excluded from receiving tobacco dollars under Measure O.

Bakst said St. John’s numbers are badly skewed but when recalculated they stand to win about $1 million a year if the initiative passes. He also noted that hospitals will not get the same amount each year, because the number of uninsured patients they treat will vary.

Rita O’Connor, a spokeswoman for St. John’s, said hospital officials are refiguring their statistics, because they believe their 1998 numbers were incorrect.

Critics of the initiative say it’s all a numbers game.

“The only way St. John’s can qualify is if they cook the books,” said Neal Andrews, a health care consultant and spokesman for the Coalition Against Measure O. “They will have to reclassify their charity services as bad debts.”

Noel Klebaum, litigation supervisor in the Ventura County counsel’s office, said it is puzzling that St. John’s qualifies for so little Measure O funding.

“We can only guess that these statistics are subject to a great deal of manipulation by hospitals to look good on their financial statements.”

Other hospitals that don’t qualify are Santa Paula Memorial Hospital, with 333 self-pay days; Ojai Valley Community, with 120; and St. John’s Pleasant Valley in Camarillo, with 6.

Bakst said Santa Paula, after the appropriate adjustments, would likely qualify and get about $125,000 a year, plus $20,000 for doctors who lose money treating uninsured patients.

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St. John’s in Pleasant Valley would probably share whatever money St. John’s in Oxnard gets, because they are run by a common administration, hospital officials said.

Ojai Valley probably won’t qualify this year, but Community Memorial officials said if it upgrades its emergency room to a 24-hour facility it will serve more self-pay patients and thus could qualify for money in the future.

“If someone doesn’t qualify, that means they didn’t treat the number of patients necessary and they shouldn’t get any money,” Bakst said.

Under the current formula, Los Robles Regional Medical Center in Thousand Oaks stands to get about $1.8 million, Community Memorial about $1.2 million and Simi Valley about $670,000 a year, if Measure O becomes law.

The initiative calls for an independent auditor to be appointed who will review each hospital’s statistics annually for accuracy.

Kenny Kwong, audit manager at the statewide Health Planning and Development office, said hospitals can only tamper so much with their numbers before breaking the law. Willfully giving false information, he said, can result in charges of perjury against the person who submits the report and a $5,000 fine against the hospital.

“It’s not a matter of leeway, it’s either right or wrong,” Kwong said.

Measure O has become the costliest campaign of this election year with Community Memorial spending $1.5 million on top-flight lawyers, professional consultants and campaign strategists to get its message out. By contrast, a citizen-led coalition opposing the initiative has raised $61,000 and has relied mainly on public rallies to contest what it sees as a corporate grab of money intended to reimburse taxpayers for public dollars spent on treating tobacco-related illnesses.

The initiative would wrest control of $260 million in tobacco funds from county government to Ventura County-based private hospitals that qualify. County supervisors say Community Memorial’s real aim is keeping the Ventura County Medical Center from getting any of the money. They also charge Bakst with trying to put the county hospital out of business, so that nearby Community Memorial can prosper, an allegation he has repeatedly denied.

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The initiative says any money left over after the hospitals and doctors get their share will go for elder care, immunization and nursing scholarships.

Opponents of Measure O say Community Memorial deliberately wrote the initiative in a way that ensures just a few hospitals will share in the wealth, while trying to sell it as a benefit to hospitals countywide.

“They know only a few will qualify,” said Andrews of the Coalition Against Measure O.

But Michael Lurie, director of planning and managed care at Community Memorial, said it would have been politically foolish to devise a formula that shut out other hospitals.

“Would it have made sense politically for us to go into a back room and say we will do this to benefit three hospitals, not seven?” he asked.

Jim Lott, vice president of the Health Care Assn. of Southern California, which represents the county’s private hospitals, said when Measure O was presented to the local hospitals they all knew what it entailed. Community Memorial asked the other hospitals to publicly back the measure after it was drafted.

“I sat in the room with them as the case was being made that this was conceivably the only way to get money for health care for the hospitals,” Lott said. “There was full disclosure when the presentation was made; they all understood the formula.”

Lott said he would have raised the 360-day threshold to 400 or more.

“It might be an incentive for hospitals to treat more indigent patients,” he said.

County officials ask why private hospitals that don’t qualify for any money would stand behind Measure O. Bakst said it’s simple: Measure O holds out the promise of money while the county offers nothing.

“We are in the midst of a major health care revolution,” Bakst said. “This is an opportunity for 25 years to put resources back into all hospitals to ensure patients have services into the future.”

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County Chief Administrative Officer Harry Hufford shakes his head at the whole thing.

Before the other hospitals agreed to back Community Memorial’s campaign, the county offered $750,000 a year to all local hospitals, he said. A counterproposal was never offered, he said.

“Only a few of the hospitals qualify and they make it appear as if they all will,” Hufford said. “The promises are many but beyond their ability to deliver. They [the hospitals] won’t see money for nursing or care for the elderly; it’s way beyond what money will be available.”

But Hufford said his chief complaint is that Measure O would take $260 million from taxpayers and give to a few private hospitals with no public accountability.

“It’s a masterpiece of deception. You have to give them credit for their chutzpah,” he said. “It’s like stealing the gold from Ft. Knox.”