17 News Special Report: Do we need KMC?

BAKERSFIELD, CA - Budget numbers show KernMedicalCenter's finances are still spiraling out of control. As KernCounty gets set to take on another $30 million deficit this year, we asked why?

What we found is KMC loses more money than any county hospital in the state, and per patient has the most staff and the highest spending.

Some people, including some in county government, are asking, “Do we need KMC?”

Counties are obligated to provide health care to the poor and uninsured. In KernCounty, this includes thousands of undocumented immigrants, a population the Affordable Care Act does not help. Right now, that leaves the county to pick up the bill.

According to KMC staff, keeping the hospital's doors open is a cost the county takes on every day, losing nearly $3 million a month. "The hospital cannot continue at the rate that it is currently incurring," said County Supervisor Mike Maggard.

KernCounty is one of 12 counties with hospitals across the state.

According to our analysis of data from the Office of Statewide Health Planning and Development, KMC is one of only two county-run hospitals that lost money in the last five years. The other is San Francisco GeneralHospital. But according to our analysis over the last five years, KernCounty lost 14 times what San Francisco General lost. 

This data is based on the net incomes of county-run hospitals from the OSHPD from the Hospital Summary Individual Disclosure Reports. A KMC official brought it to 17 News's attention that a more accurate analysis of county hospital budgets would have analyzed data from the hospitals' operating income. This is because many county-run hospitals lose money but covered those losses through other county funding sources to offset operating losses. 

KMC supplied 17 News with data from OSHPD based on Annual Financial Data Profile from the years 2008-2012. In this data out of 17 hospitals  11 lost money overall in the last five years combined including: Contra Costa Regional Medical Center, LAC/Harbor-UCLA Medical Center, LAC/USC Medical Center, Riverside County Regional Medical Center, UC San Diego, San Francisco General Hospital, Santa Clara Valley Regional Medical Center, LAC/Rancho Los Amigos National Rehabilitation Center, San Joaquin General Hospital, San Mateo General Hospital, and Ventura County Medical Center. 

"It's a never ending saga like a TV series that never ends," said Mike Turnipseed, executive director of the Kern County Taxpayers Association.

State data suggests a major issue is staffing. According to our analysis of data from the OSHPD, KMC has the most full-time equivalent staff per patient and spends the most money per patients of any county hospital.

"Yes, KernMedicalCenter has been overstaffed in the past," said Russell Judd, new CEO of Kern Medical Center.

However, streamlining the roughly 1,400 employees isn't simple. County staff says current contracts guarantee employees a minimum number of hours regardless of how many patients are served. "We have floors with a minimum patient population, with a maximum employee staff coverage, and it takes us weeks or months to adjust and flex to match our staffing with our patient load," said Supervisor Maggard.

That's why Maggard is looking at another option, bringing in patients, specifically the 150,000 members with Medi-Cal that belong to the county-based insurance program, Kern Health Systems.

Right now, Kern Health Systems said patients can be referred to various hospitals across KernCounty and other parts of the state.  "That system is broken at the moment, and it's a fundamental solution to KMC that we must fix," said Supervisor Maggard.

Maggard said he wants all those patients referred to KMC and only KMC, something other KernCounty hospitals say would affect their bottom line dramatically.

So why does KernCounty have KMC? According to county officials, the county is obligated to provide care for the poor and uninsured. But, it's not obligated to operate a hospital to provide this care. In fact, most other counties use different methods, methods Kern is considering.

One option is to create an independently funded hospital authority, taking decision-making power away from the Board of Supervisors.

The other option is to close KMC and contract with other KernCounty hospitals to care for the uninsured.

But, the idea of closing the county hospital isn't popular.  "Shutting it down would be a failure," said Turnipseed.

And, a burden the other local hospitals would have to take over in the absence of KMC, something KMC CEO Russell Judd said currently other hospitals aren't taking on. 

According 2011-2012 financial data from the state 0.39 percent of patients at BakersfieldMemorialHospital were in the county-covered indigent group. 0.19 percent of patients at Mercy Hospitals were county-covered indigent; 0.51 percent of patients at San JoaquinCommunityHospital were county-covered indigent. KMC told us that 24 percent of its patients fall into this group but there are new questions about that figure. 

KMC combines all its patients into that single group while the other hospitals divide the group meaning a comparison of these numbers might overstate difference between KMC and the other hospitals.

So for comparison sake we added up the total number of all indigent patients admitted to KernCounty hospitals in fiscal year 2011-2012. Of the 4,796 admitted county-indigent patients, Memorial took care of 22 percent, Mercy cared for 15 percent, San Joaquin cared for 4 percent, KMC cared for 53 percent and the remaining 6 percent at other hospitals. 

According to Judd, those uninsured are not expected to go away even with the implementation of the Affordable Care Act. That's because not everyone qualifies for insurance under the federal law, namely the undocumented.

"As the law is written we will always have a significant population of the uninsured," said John Nilon, Kern County Administrative Officer.

KernCounty said last year there were about 160,000 uninsured in the county. Since provisions of the Affordable Care Act took effect, the county said it cannot say for sure the number of uninsured, but early estimates show the uninsured only decreased to about 140,000, many of whom could be Kern's 119,000 illegal immigrants, people KMC will not turn away.

"We're here to care for the people. That's why KernMedicalCenter exists. We will never turn anyone away because of any type of status," said Judd.

But, a ruling made 10 days ago by a Fresno Superior Court judge is challenging that mandate, lifting a 30-year injunction requiring FresnoCounty to cover the undocumented. "If we have sister counties in California that have been upheld in their positions that do not cover the undocumented that come to their door, I would like to see that." said Supervisor Maggard.

But some say KMC is not just about caring for the uninsured, it's also essential to caring for the critically injured. That's because according to the state, KMC is the only trauma center between Fresno and Los Angeles. "Where would those people go? I don't know. Without KernMedicalCenter there's hundreds that don't survive," said Judd.

And, potentially hundreds who no longer receive specialty care in Bakersfield.  "We have on any day about 20 babies in that NICU. There are not an additional 20 beds in the neonatal intensive care unit in this town," said Judd.

Judd also said without KMC there won't be enough rooms to deliver babies.
"We deliver 220 or so babies each month," said Judd. "There is not the capacity in this town to deliver those babies. The community cannot live without KernMedicalCenter. I've got to find a solution."

Supervisors are scheduled to discuss the future of KMC at length Monday, May 12th. It will take place from 10 a.m. to 4 p.m. at the Board of Supervisors chambers.  17 News did reach out to San Joaquin and MercyMemorialHospitals about KMC. Here's how they answered our questions:

Dignity Health: Mercy and Memorial Hospitals
1) In light of KMC's fiscal troubles is Dignity in any talks with Kern County to possibly take on some of the responsibility of providing care for the uninsured and medically indigent?
We do provide care for the uninsured and medically indigent. These patients present at all local hospitals. KernMedicalCenter receives federal and state funding to support these patients. We care for all patients that present at our hospitals, regardless of their coverage.
2) Would any of your hospitals be willing to garner the necessary qualifications to become a trauma center in case the county closed KMC?
The answer is yes. We have been approached by physicians and others in the community over the years but have declined because of our intent to fully support the trauma center at KernMedicalCenter.
3) KernCounty is considering mandating Kern Health Systems to refer its members only to KMC. What do you think of that? Would that substantially hurt business?
We have negotiated a contract in good faith and have been a longtime supporter of Kern Health Systems. Such an action could result in a reduction in volume for all local hospitals and prevent Dignity Health from carrying out its mission to serve all of the residents of KernCounty.

San Joaquin Community Hospital:

1) In light of KMC's fiscal troubles is San Joaquin in any talks with Kern County to possibly take on some of the responsibility of providing care for the uninsured and medically indigent?
KernMedicalCenter is an incredibly important component of our local health care community. The services they provide to many citizens of KernCounty are invaluable and our hope is that KMC continues to move forward and be an active hospital in Bakersfield for many years to come. At San JoaquinCommunityHospital, we are similarly committed to providing medical care that is both compassionate and of the highest quality to each of our patients. As a not-for-profit hospital, we are also focused on reaching out to the indigent populations in our community through multiple community benefit activities. In 2013, our hospital provided over $22 million in charity care to help offset the costs for patients that could not afford to pay their medical expenses. In addition, through programs like the Grossman's Burn Center Chevron fund and our Children's Mobile Immunizations Program, we are actively working to both prevent the spread of disease and assist families when the need for care arises. These activities are a major part of our mission of providing whole-person care."

2) Would any of your hospitals be willing to garner the necessary qualifications to become a trauma center in case the county closed KMC?

"KernMedicalCenter has done a great job in running the trauma center for Bakersfield and KernCounty. As KMC continues to operate as a trauma center at this time, there are no current plans for San JoaquinCommunityHospital to open a competing service line. It wouldn't be fair to speculate on the myriad of "what-ifs" that would be present were KMC to close. If or when that situation arises, the local health care community would have a number of issues to collectively and individually assess. Certainly, the location of a new trauma center would be on the list."

3) Kern county is considering mandating Kern Health Systems to referral its members only to KMC. What do you think of that? Would that substantially hurt business? "Like KMC, Kern Health Systems is a core member of our local health care community. At San JoaquinCommunityHospital and our affiliated outpatient services, we are committed to providing high quality care for all of our patients and their families, including those who are members of Kern Health Systems. Since no such mandate has been enacted by the county, it wouldn't be fair to speculate on the ramifications if such a decision were made. In health care, the only constant is change. At SJCH, adjustments are constantly made to safeguard our hospital and give us the ability to quickly adapt to any situation."