Local Owners Give Hospital Survival Hope

Thirty years ago, a health care corporation bought Ojai Valley Community Hospital. A few years later another bought it. Then another. And another.

So when talk of a fifth acquisition drifted through the halls of the barely profitable medical center two years ago, doctors and community leaders decided enough was enough.

They rallied together and formed a nonprofit foundation, took out $2.5 million in bank loans and in a leap of faith purchased the 110-bed hospital--putting it in the hands of local citizens for the first time.

Eight months later, a sense of stability has settled over the hospital, even as backers struggle to keep it out of the red.

“This hospital has been through a lot of tumult in the last 40 years,” said Victoria Alexander, the hospital’s chief executive. “I think people here have hope for the very first time.”

It was a bold move.

Nearly two-thirds of all California hospitals are losing money, according to state officials, and the plight of small rural hospitals looks even worse.

Dozens are closing their doors or being swallowed up by national chains, unable to survive as larger facilities siphon off patients by reshaping themselves as specialty centers or by cutting rates to secure health management organization contracts.

For Ojai, losing the hospital would leave thousands of residents without nearby emergency care. The closest other hospitals are 30 minutes away in Ventura and Santa Paula.

It would also mean losing the Ojai Valley’s third-largest employer.

Ojai’s maverick hospital directors don’t want to see that happen. They believe they can save the 40-year-old institution by eliminating shareholders and pouring profits, however slight, back into the facility.

“Most small hospitals are being consumed by larger hospitals, but that doesn’t mean everybody is right and we’re wrong,” said Ojai department store owner Alan Rains, president of the foundation board and a driving force behind last year’s hospital purchase. “It says we are independent and feisty.”

The hospital, which employs 280 staff members and runs on a $14-million budget, is making a slight profit, Rains said. Its directors expect to save about $100,000 in property taxes as a result of the hospital’s nonprofit status.

Last month they launched the first phase of an ambitious fund-raising plan, drawing $50,000 in donations from local doctors and $15,000 from other residents.

The second phase, to begin later this year, will focus on donations for capital improvements. Plans are also in the works for an endowment fund.

Community-Run Hospitals Rare

Health care industry experts say community-run hospitals in California are a rarity.

“The important ingredient to succeeding is community support,” said Jim Lott, senior vice president of the Healthcare Assn. of Southern California. “You have to have a commitment to use the facility.

“All of those ingredients seem to be in place in Ojai,” he added. “They get real high marks in terms of potential for success.”

Built in 1959, Ojai Valley Community Hospital sits at the base of the rugged Topatopa Mountains, a few miles from the center of town and across the street from the bank where supporters last year took out one of two loans to buy it.

An intensive care unit and lab were added in 1977, and a skilled nursing facility was built about the same time.

On any given day, nurses and doctors treat 10 or 12 patients in the acute unit and about 60 in the skilled nursing facility--numbers backers would like to see increase.

But getting more residents to use the hospital remains a challenge. Last year under the previous owners, the hospital closed its money-losing maternity ward, forcing women into larger hospitals elsewhere. Other residents choose larger hospitals for specialized care, or for treatment they believe they won’t find in Ojai.

The changes in ownership haven’t been reassuring.

The frequent acquisitions often put hospital staff members at odds with the out-of-town owners and fostered feelings of instability in the community, backers say.

Now, backers are trying to convince residents that the hospital is on the mend.

Last month, hospital boosters held a community forum to find out what services the community wants from its hospital.

The meeting was attended by more than 50 people, including doctors, nurses, business and civic leaders, and members of the public. Many expressed concerns about the broader implications for the Ojai Valley if the hospital were to close.

Nearby Hospital Viewed as Necessity

Dr. Martin Pops, vice chairman of the foundation board of directors, said that in an isolated area such as Ojai it is essential to have quick access to emergency care.

Additionally, nearly one in five Ojai residents is over 65--the highest percentage of seniors in Ventura County, according to the U.S. census--and those residents need a hospital close by.

“People want this hospital to be here,” said Suzanne Collinsworth-Smith, executive director of the Gables of Ojai, a retirement community serving about 70 seniors.

Some business owners hope the switch to nonprofit local ownership will yield innovative partnerships and alternative health care.

Sheila Cluff, owner of the Oaks at Ojai health spa and resort, envisions a partnership in which patients recovering from cosmetic surgery could be transferred to local spas for rest and rehabilitation.

The spas and hospital could also join forces for health screenings or obesity clinics, Cluff said. Such ventures could create a unique niche for Ojai and generate economic opportunities for the hospital.

Nordhoff High School educators Ann Inman and Kimberly Hoj want the maternity ward reopened. Both women had their children at the hospital in 1999, before the ward was closed, and heaped praise on the nurses and staff.

“We got incredible care, and we feel really passionate about that,” said Inman, a social science teacher. “We should have a way to have babies here and not go to Ventura.”

Rains said the hospital hopes to reopen some form of “birthing center” in the future.

In the meantime, hospital directors are facing $1 million to $2 million in state-mandated earthquake retrofitting costs by 2008.

Rains and hospital directors are also pushing ahead with fund-raising goals, hoping to raise $250,000 by the end of the year.

Lott, of the Healthcare Assn., said other small towns facing their hospitals’ closure or corporate takeovers could end up following Ojai’s lead.

“I think we are going to see more of that because people don’t like to lose their neighborhood hospitals,” Lott said. “We beat up on hospitals all the time, on the costs and everything. But we don’t want to live without them.”