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Jim Suver / Laura Austin File Photo

RRH executives speak to Budget Subcommittee : Threats to rural hospitals, labor and delivery surface as common challenges in healthcare

Ridgecrest Regional Hospital(RRH)–

    Jim Suver, CEO of Ridgecrest Regional Hospital, was one of five California hospital executives to give testimony at last week’s hearing for the state’s Budget Subcommittee No. 1 on Health, chaired by Assemblywoman Dr. Akilah Weber (D-San Diego).

Dr. Weber said that the purpose was to provide hospital perspectives that have threatened financial sustainability, access, quality, and affordability in healthcare.

“As we are well aware, the financial sustainability and vitality of hospitals in California has become increasingly challenging in the past several years,” said Weber. While healthcare was already in a fragile state prior to 2020, the pandemic and other drivers created a “storm that many hospitals could not weather,” with several facilities closing their doors.

She noted that even hospitals that have not discontinued all services have suspended labor and delivery services, a move significantly influenced by lower volumes and increasing costs of maternal care.

“It is imperative that the state and legislature closely track the hospitals closing labor and delivery units,” she said. This is particularly critical in underserved communities, such as the rural and socio-economically disadvantaged.

Kristof Stremikis, director of California Health Care Foundation’s Market Analysis and Insight team, gave an overview of some of the major challenges of the 348 of California’s 411 hospitals evaluated.

“It is impossible to overstate the heroic nature of the sector’s response to COVID-19 and the essential role [hospitals] play in the care continuum after the public health emergency,” Stremikis listed as one of his key takeaways.

“You are talking about public policy for the State as a whole, which is what you need to do,” he said. However, he said that based on the variability in trends “it really takes a hospital-by-hospital, community-by-community, analysis.”

There are hospitals in communities that don’t have the resources to meet the needs of their communities, he said. “I wish there was one characteristic or one option that would fix that, or put everyone on sound financial footing. But we just don’t see that. What I really see is the need for tailored solutions in local communities.”

His statement was borne out in the testimonies that ranged from large systems like Adventist Health to our small rural RRH to the plight of the bankrupted Madera Community Hospital to the overwhelmed demands on urban-based MLK Community Healthcare.

Weber asked if Stremikis was in discussions with other states, and whether there were any similarities between the struggles Californians are facing, compared to those of other states. “Yes — labor and delivery is a national issue,” he replied.

Karen Paolinelli, CEO of Madera Community Hospital, said that prior to the pandemic a key threat to financial solvency was an inadequate offset for the unreimbursed costs for un- or under-insured patients.

“As the pandemic raged on, we found ourselves increasingly reliant on travel nurses” — a costly but necessary measure to meet the overwhelming demand. Wages for traveling nurses skyrocketed to $200-$250 per hour, and when staff nurses saw the opportunity to increase their wages they left to become traveling nurses.

Paolinelli said that Madera is now on a pathway to be reopened, largely thanks to a $50 million lifeline through California’s Distressed Hospital Loan Program. (RRH was also awarded $5.5 million, thanks in large part to the efforts of State Sen. Shannon Grove).

Todd Hofheins, chief operating officer of Adventist Health, reiterated the challenges of sustaining labor and delivery — particularly in areas with low birthrates. “If the delivery volume is not high enough, it becomes unsafe for the hospital to maintain that care.”

Suver acknowledged that volume has been an issue in the Indian Wells Valley. Even with a market share of 95 percent (typically excluding all patients except those with high risks), the average number of births per month during his 16-year tenure at RRH has declined from about 60 to 38.

Industry standards suggest that in order to maintain competency, labor and delivery programs should manage volumes of 100 or more per month.

Suver said that in addition to the safety issue, recruitment has been a challenge. Recruiting firms have reported to RRH that provider expectations include being on call no more than one day in five, and a starting salary in the mid-$500,000 range. Despite subsidizing labor and delivery by millions last year, RRH simply could not attract sufficient obstetricians to maintain a safe program this year.

During follow-up testimony, two of the other four hospital executives said that they have or plan to close labor and delivery services.

Suver corroborated the COVID challenges expressed by other executives, adding that he was proud of his staff for saving the life of a young father before transferring him to a tertiary facility. “Even our little hospital in the middle of the desert saves lives.”

In addition to the other challenges relating to COVID and rising labor costs, Suver noted that RRH went into the COVID era with a $4 million dip in revenues after the hospital was closed for repairs from a pair of 6.4- and 7.1-magnitude earthquakes. But even in the post-COVID world, increased costs for labor and supplies have not gone down.

The majority of primary care in town is provided through hospital clinics. “Every medical group that has tried to come into our community has not been able to make it,” said Suver.

In many cases, service lines that were historically lucrative enough to offset losses in acute care are now losing money as well.

“We say we care about the most vulnerable population, but it sounds like we are kind of stingy when it comes to them,” said Assemblyman Jim Patterson (R-Fresno).

In addition to his recent trip to Sacramento, Suver was also a part of a local contingent that traveled to DC the first week of March to discuss the local healthcare crisis with policymakers. (See related story, this edition).

Advocates continue to fight for RRH

In addition to recent testimony Ridgecrest Regional Hospital CEO Jim Suver presented in Sacramento (see related report), a contingent of community advocates traveled to Washington DC earlier this month to find long-term solutions that will protect access to and quality of healthcare services in the Indian Wells Valley.

“Since our fiscal crisis came to a head in 2022, RRH board and leadership have been engaged in finding solutions that will not only resolve the immediate barriers for local healthcare, but address the sustainability of services,” said Suver.

“We have been very fortunate with the engagement of City and China Lake officials, as well as many other organizations in our community, to sit down with our decision makers to find solutions.”

Suver and other officials met with the offices of California Senators Alex Padilla and Laphonza Butler, as well as Congressmen David Valadao, Jay Obernolte and Ken Calvert. “These relationships are instrumental in pursuing both immediate and future funding solutions for the hospital. The commitment of these offices to assist with loan forgiveness and other potential funding sources is evident.”

RRH is also working with a consultant to propose language for the National Defense Authorization Act, a grant application for the Targeted Technical Assistance for Rural Hospitals program, and other possible programs that will enhance services in Ridgecrest and the IWV.

“Hospitals across the state and nation are struggling, so our elected officials understand that there are critical issues that must be addressed in terms of how healthcare is funded and delivered in America,” said Suver.

“However, Ridgecrest also has unique challenges that we are working hard to communicate to our representatives: we are 100 miles away from the nearest hospital, we provide critical service to a population of 30,000 geographically isolated residents, and we are the closest hospital to those who contribute to the mission of national security at China Lake.”

“The City continues to work in support of RRH, and was proud to advocate side-by-side with the hospital,” said Mayor Eric Bruen. “We believe, as they do, that a healthy hospital helps to ensure a healthy community.”