The clock is ticking for Healdsburg (Calif.) General Hospital, a 49-bed facility owned by Columbia/HCA Healthcare Corp.
Because of financial losses, Columbia intends to close the hospital on June 2 if no buyer or viable partner emerges. Columbia announced its 90-day ultimatum for the hospital on March 4.
Since then, community leaders, as well as a number of California-based healthcare systems, have provided hope that the hospital will survive.
Healdsburg and Columbia have begun preliminary discussions with a number of companies.
"It's looking very positive that the hospital will remain open," said Mary Schwind, Healdsburg's chief executive officer.
Among the first bidders was a group of community leaders and Healdsburg physicians, who formed the North County Hospital Association shortly after Columbia's announcement. The 16-member group said it intends to purchase the hospital, planning to make a formal bid by last Friday. At deadline, the group had not made the offer and declined to reveal its terms.
Sacramento-based Sutter Health, Rose-ville-based Adventist Health and Long Beach-based Pacific Health Corp. also expressed interest in the hospital. Representatives of the systems confirmed their interest but declined further comment. Sutter Health added that it also is interested in another healthcare facility in the same county, 48-bed Palm Drive Hospital in Sebastopol. Both Healdsburg and Palm Drive are among the more than 100 hospitals that Columbia would like to spin off as part of its restructuring plan outlined last year.
The bid by North County Hospital Association would place the Healdsburg hospital in the hands of the community and out of reach of corporate giants, said Daniel Rose, M.D., association chairman. The group would convert the facility into a not-for-profit, community-based hospital. "The history of the hospital has been one of continued ownership by outside systems that have not put the needs of the community and our hospital first," he said. "We have been treated like a colony, with more taken out than put in."
In the past five years, the hospital has had three owners. Columbia inherited the hospital three years ago when it merged with Healthtrust, which purchased the hospital when it acquired Epic Healthcare Group in 1994.
Schwind, who has held the CEO position for eight months, said she is the 12th CEO in eight years.
During its three years with Columbia, the hospital has experienced about a 16% decline in net revenues and a 15% decline in admissions, Schwind said.
"We're a casualty of managed care," she said. "The health plans in this market direct a lot of the care to Santa Rosa." Santa Rosa, which is about 15 miles away, has four large hospitals.
Rose, on the other hand, blames the hospital's financial problems on several factors. "(Columbia) inherited some poor strategic decisions from previous owners," he said. "They got this hospital along with many others. They did not particularly need us. They did not make the commitment to this hospital (that) they did with other hospitals they wanted to save. They made some decisions that did not help us."
The hospital has experienced a financial loss for a number of years.
For the fiscal year ending Feb. 29, 1996, Healdsburg had a net loss of $2.1 million from total revenues of $17.6 million, according to SMG Marketing Group.
"Every owner has left a little trail of damage," said Kendra Parry, a principal with the Westport Group, a consulting firm based in Augusta, Maine. The North County Hospital Association hired the company, which specializes in healthcare for rural and underserved areas, to conduct a financial audit of the hospital and assess the community's healthcare needs.
The 90-year-old Healdsburg General Hospital is the town's only inpatient, critical-care facility and thus is important to the community, Schwind and Rose said.
"This hospital is an integral part of the quality of life in this community," said Rose, who has been a family physician in Healdsburg for the past 25 years. "It's a huge part of the commerce. It's a safety net for the many people who can't travel to Santa Rosa and for everyone who can't drive another half-hour in an emergency."
The North County Hospital Association and Pacific Health also have entered discussions about possible collaboration on Healdsburg. Rose and Pacific Health CEO Jim Young declined comment on specifics.
The future of Healdsburg is still unclear. Columbia is considering a number of possibilities. "We've been discussing options with (Healdsburg) for a while, said Columbia spokesman Jeff Prescott. "It may mean partnering with someone else or coming up with an alternative use for the hospital."