Vote to Close Public Hospital Causes Concerns That the Poor Will Suffer

Special to The Times

The decision to close the county-funded General Hospital serving the poor in this affluent corner of the Central Coast has some worried that it will leave a hole in the fraying health-care system. General serves as the only public hospital between Monterey and Ventura counties.

The San Luis Obispo County Board of Supervisors voted 4-1 this week to close the hospital. Another hearing will be held in three months, when a timeline for closure will be considered.

“The fact is that more of the medically indigent are treated in the other four private hospitals than at General,” said Gere Sibbach, the county’s auditor.

He said the county pays private hospitals for those who qualify as medically indigent under state law.


General, however, accounts for 40% of the county’s medically indigent patient admissions, in addition to insured and other paying patients. But in the fiscal year that ended in June, General admitted just 1,250 patients. It is licensed for 76 beds, but rarely needs to staff more than 40.

The town has been debating whether to close General for two decades. There is much fondness for the old facility in the hills east of downtown. The medical center stands on the same grounds where the city fathers built the first General Hospital in 1878.

A ballot initiative in 1996 showed that county voters advocated keeping the hospital open by a 73% margin, while another in 1998 showed a much slimmer majority opposed to paying for its upkeep through increased sales taxes.

The closure will save $1.4 million out of a total county budget of $250 million, Sibbach said. The plan is to use the savings on the county’s system of outpatient clinics, which also serve the area’s poor.


Many doctors in the area have considered General superfluous for some time, because San Luis Obispo is already served by two private hospitals and has a population of only 43,000. Countywide, there are four private hospitals to serve 250,000 residents.

But some residents believe that now is the wrong time to bail out of the hospital business, because the county is seeing its health care system erode, as physicians’ groups go bankrupt and insurance giants move out of the area.

Mission Medical Associates, once the region’s largest physicians’ group, closed recently because of financial difficulties.

The Lifeguard and Health Net health maintenance organizations, which provided insurance for thousands of public employees, are pulling out of the county because of financial strains in their own operations.

“The minimal savings of $1.4 million just does not justify the closing of a hospital,” said Dan Cashier, the chairman of an interim board studying General Hospital. “We’re concerned that we don’t have a stable health care environment.”

Cashier said that although the county has maintained it will save the $1.4 million, it has no idea what private hospitals’ costs for serving the indigent will be.

A driving force behind the region’s medical crisis among private providers is low Medicare reimbursements, doctors say.

Under Medicare, the federal health coverage program for senior citizens, San Luis Obispo County is considered a small, rural county and receives reimbursements considerably below neighboring Santa Barbara County -- and lower still than Los Angeles County.


Pam Heatherington, who supports keeping General Hospital open, said she is working with other residents to start a community-based hospital to provide service to the poor.

Heatherington’s group hopes the hospital will be supported by local fund-raising, as well as state and federal grants.

County officials have said they will rent out the old hospital site for $1 if the drive is successful.

“What’s really odd to me is this county for over 100 years has taken care of the county’s poor. And now it says it can’t,” Heatherington said.

She believes closing the hospital will affect not only the medically indigent but people on Medi-Cal and Medicare as well.

“They turn to General Hospital because many private doctors in the area will not see them,” she said. “And now it says it can’t.”