MONUMENT VALLEY, Utah-The only hospital in this remote rural area recently closed, but an unusual provision in its property lease has helped ensure at least some healthcare will remain.
Financially troubled 20-bed Monument Valley Hospital shut its doors July 19 after merger talks with a for-profit provider collapsed.
Its owner, a local company called RGJ, decided to honor a stipulation in the property's original lease, which required the site be used to provide healthcare. The company accepted a joint proposal from the federal Indian Health Service and a county health agency to open an ambulatory clinic and provide emergency stabilization services on the site.
The clinic will be operational within 90 days and will serve the 35,000 American Indians who live in a 2.5 million-acre area in Arizona and Utah. RGJ will allow the clinic to operate rent-free for at least two years.
Monument Valley had been in negotiations with American SurgiCare, a Salt Lake City-based company, since May. Talks ended because "they had a bigger price tag than what we wanted to put up," said Brent Alder, American SurgiCare's chief executive officer.
Later, the hospital gave in to its financial woes. It had operated on an annual budget of between $3 million and $5 million. About 35%, or more than $1 million, went toward uncompensated care, said Ray Carney, its president and CEO. "That's really what killed us," he said.
Even after receiving more than $500,000 in donations in 1995 and 1996, the hospital lost just less than $400,000 in 1994 and about $600,000 in 1995, Carney said. The losses were "insurmountable" for the not-for-profit hospital, he said.
It admitted 800 to 900 patients per year and ran medical and dental clinics that cared for 700 to 1,200 patients per month, Carney said.
The Indian Health Service and San Juan Health Care Services will pay $20,000 to start up alternative healthcare services. They are prepared for as much as a $150,000 loss in the first year, with the goal of at least breaking even in the long term, said Steven Simpson, an attorney for RGJ. San Juan Health Care Services, which provides public health services in San Juan County, is managed by Lutheran Health Services of Fargo, N.D.
Located in the rugged country of a Navajo Indian reservation, Monument Valley was the most isolated of 22 rural hospitals in the state and one of only a handful on a reservation, according to the Utah Association of Health Care Providers.
While patients can travel some 20 miles to receive outpatient care at a clinic in Kayenta, Ariz., the nearest inpatient hospital is about 80 miles away in Tuba City, Ariz.
Carney said he had to rev up the ambulance and track down a paramedic himself when a woman came to his home after midnight looking for help for a 9-year-old girl with abdominal pain.
"We are desperately in need of certain functions," he said. "We need emergency medicine, but it doesn't pay for itself."
The original owner of the hospital's site must have known healthcare would always be difficult to provide in the area.
Around 1950 the Seventh-day Adventist Church secured a portion of a 640-acre stretch of reservation land from Harry Gouldings, a private landowner who founded the Monument Valley trading post. He included in the land lease the requirement that the Adventists must provide health services on the site if they wanted to use the area for their community.
The church, most recently represented by the Nevada-Utah Conference of Seventh-day Adventists, opened the hospital in 1961. Though the lease has changed hands over the years, each new owner kept the promise of providing healthcare and allowed the church to continue running the facility.
But when it closed, the conference stepped out of the picture. The responsibility for the lease fell solely on the shoulders of RGJ, which now owned the property. Company owners Roland and Gerald LaFont felt an obligation to honor the original agreement brokered by Gouldings, their attorney said.
RGJ began looking for replacement providers to at least provide ambulatory and emergency care to residents. They received two proposals, which presented them with different directions.
American SurgiCare entered the ring again. Founded in 1994, the company currently runs an outpatient surgery center in Boulder, Colo. It's also building a $7.4 million facility in Blanding, Utah, that will provide an eight-bed inpatient hospital and an outpatient surgery center equipped with telemedicine capabilities.
The company wants to establish a PPO for some 53,000 Navajo Indians in the four-corners area where Arizona, Colorado, New Mexico and Utah intersect. Ideally the PPO would contract with the Indian Health Service, much like it would with Medicare or another insurer, Alder said. The Monument Valley site fits into these plans as a possible referral source for the new facility in Blanding, 72 miles away.
Nancy Davis, the chief of contract health services for the Indian Health Service, called the idea of contracting with managed-care organizations "pro-vocative" and said the agency is studying the possibility.
But American SurgiCare's proposal wasn't tantalizing enough for RGJ. The owners opted for less of an unknown, selecting the joint proposal from the Indian Health Service and San Juan Health Services.
RGJ attorney Simpson said the public health agencies had been more realistic in their projections and had taken a fairly conservative approach.
"We were trying to decide who would be the best long-term operator, who would be there from now on," Simpson said. "We felt more comfortable with the county and focused on their experience. American SurgiCare was the new kid on the block and that was a little more worrisome for us."