Feb 1, 2019
by Carol Benfell
On March 5, voters in the Palm Drive Health Care District will go to the polls to decide if Sebastopol’s struggling public hospital will be leased, then sold, to a private, for-profit company, American Advanced Management Group of Modesto.
The District is putting the former Palm Drive Hospital on the market because it has consistently lost money. Despite 20 years of good faith efforts and multiple managers, the District is $28 million in debt and in its second bankruptcy. Former employees and vendors are still owed more than $8 million.
American Advanced Management Group (AAMG) is a six-year-old company that owns four other small rural hospitals in California. AAMG began running the Sebastopol hospital in September under a 10-year management agreement with the District.
The District and AAMG were still in negotiations on the lease/sale at press time. The District will present the contract to voters and explain it at a series of town hall meetings in February. California law gives voters a choice on the proposed lease/sale because the District is a governmental entity, with a publicly elected board.
Some things about the hospital—now named Sonoma Specialty Hospital—are expected to stay the same whatever voters decide.
Parcel taxes, now $155 a year, will continue. However, if the sale is approved, parcel tax funds now subsidizing hospital costs could be used to pay down debt and provide limited community health services.
Whatever voters decide, the ongoing transition to a specialized long-term acute care hospital will continue. The emergency room has already closed, and an urgent care center is expected to open in mid-February.
An emergency room accepts everyone who comes through its doors. An urgent care center does not. Indigent, uninsured people are referred instead to Community Health Centers or the urgent care center will call 911 for emergency transport.
However, in a disaster, Sonoma Specialty Hospital promises to open its doors to everyone as it did during recent wildfires.
If voters approve the lease/sale, proceeds could be used to pay down District debts. Any future profits or losses from hospital operations would belong to AAMG and would no longer be the responsibility of the District and its taxpayers.
If the sale is approved, AAMG will make all business decisions about the hospital, from continuing outpatient laboratory, radiology and surgery services, as it says it intends to do, to selling the property. The District is accountable to voters; AAMG is not.
If voters disapprove the lease/sale, the District will continue to own the hospital, to make overall decisions, to owe AAMG a monthly $100,000 management fee and to be liable for any future hospital losses.
Questions have been raised about the District’s ability to finance needed upgrades to the hospital, to make it compliant with state and federal regulations and to keep it open. AAMG says it will spend the money to make the upgrades if voters approve the ballot measure.
If voters reject the lease/sale, the 10-year management agreement requires the District and AAMG to develop a new lease/sale contract to present to voters at another special election in November. Meanwhile, AAMG would continue to manage the hospital.
AAMG believes it can succeed where others failed because Sonoma Specialty Hospital will be a long-term acute care hospital, not a short-term acute care hospital like the former Palm Drive Hospital and Sonoma West Medical Center.
A long-term acute care hospital partners with other hospitals instead of competing with them. Hospitals like Sutter Medical Center and Santa Rosa Memorial Hospital have an incentive to refer patients: they are not paid for extended patient stays, no matter how necessary, but long-term acute care hospitals are.
SONOMA SPECIALTY is poised to become the only long-term acute care hospital in Sonoma County.
A long-term acute care hospital is not the kind of hospital West County residents are used to.
Sebastopol’s hospital has historically been open to anyone who came through its doors. That will no longer be true. Only patients referred directly by hospitals or physicians will be admitted as inpatients.
A long-term acute care hospital specializes in patients referred from other hospitals; patients who are too sick even for skilled nursing facilities and require continuing acute care for such things as inability to wean from a respirator, cardiac disease or complex wound care.
Because the emergency room is closed, West County residents with life-threatening conditions, such as stroke or heart attack, will have to go to emergency rooms in Santa Rosa, Petaluma or Healdsburg.
The District would like to inform you about the sale agreement. We will provide education and information about the purchasers American Advanced Management Group. Learn about health services that remain available to you in West County: Urgent Care, Surgery, Lab, Radiology, and Hospital Care.
INFO: Cheri R. Taub (707) 823-3586 ASK ANY QUESTION YOU WANT
2/8: 6:30 – 8pm (A League of Women Voters Debate)
Sebastopol Community Church, 1000 Gravenstein Hwy N, Sebastopol
2/18: - 6 – 8pm
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