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With the Fallbrook Hospital facing a loss of $6 million that is growing at a clip of $500,000 a month, the directors of Fallbrook Healthcare District voted on Wednesday, October 8, to pull the plug on its emergency room and completely change the way it does business.

The five directors voted to cast the struggling hospital’s fate with Oceanside’s Tri-City Medical Center and Escondido’s Palomar Health hospital districts. Fallbrook Healthcare District will soon join a joint-powers-agreement type of governing body with those two districts, which are each located some 30 miles away. Specifics are to be worked out.

“We have $9 million reserves and if we continue at this rate we will completely deplete our resources at hand,” said board of directors president Stephen Abbott at the October 6 meeting attended by some 80 citizens. The directors are negotiating the termination of a 30-year agreement with Tennessee-based Community Health Systems, which has run the hospital for the past 16 years.

The Fallbrook ER will morph into an urgent-care-type facility. Serious heart attack and trauma care patients from Fallbrook and Bonsall will need to be rushed to Temecula, Escondido, or Oceanside after November 17.

Insiders say it has been at least ten years since a hospital emergency room flat-lined, coinciding with the closures of Mission Bay and El Cajon Valley hospitals.

The ailing Fallbrook Hospital started turning away pregnant moms last month when its obstetrics unit stopped taking patients. And the hospital has seen the exodus of two eye doctors and two gastro-intestinal specialists who were based in Fallbrook but who no longer choose to perform operations at the hospital.

The 47-bed, two-story, 52-year-old hospital has suffered from a decrease in ER use as well as in many other departments. The biggest challenge facing Fallbrook Hospital, admits president Abbott, is that stand-alone hospitals can't survive without affiliating with a larger health-care network like UCSD, Scripps, or Sharp. But is the Tri City/Palomar affiliation merely a rearrangment of the Titanic’s deck chairs?

San Diego–based Nathan Kaufman consults over 80 hospital districts nationwide on how to adapt to the realities of modern medicine. He has been publicly urging Tri-City for years that it absolutely needs to affiliate with a larger provider or it could face realities like a fire-sale of assets or bankruptcy.

“Tri-City has been teetering on financial difficulty for years,” says Kaufman. “Like many public districts that are funded by taxes, they have well-meaning people who have been elected to run them. But that doesn’t mean those who are elected have the competencies to figure out how to make that district survive.”

Kaufman points out that since Grossmont Hospital in La Mesa became Sharp Grossmont Hospital, that operation has “...turned things around. The board that ran Grossmont realized that if they went along with business as usual, they wouldn’t survive. There is no plausible way Tri-City can survive as a stand-alone.”

Scripps, which already is attracting patients from Tri-City's core Oceanside/Carlsbad/Vista service area to its hospitals in Encinitas and La Jolla, is currently building a three-story outpatient clinic in Oceanside at Hwy 78, two miles west of Tri-City, which Kaufman says will put an even greater burden on Tri-City to maintain solvency.

When Fallbrook Hospital director Gordon Tinker was asked in a public meeting if he was aware that Tri-City could also face the same problems of solvency, he responded, “That’s what our consultant told us.” (Fallbrook hired a different consultant besides Kaufman.)

The Fallbrook Hospital District only received one other offer to run the hospital, from Riverside-based for-profit Strategic Global Management, which runs hospitals in Hemet and Victorville. But the directors said that offer left all the financial risks with the district and hence voted to go with the Tri-City/Palomar arrangement.

One item not brought up at Wednesday’s meeting: the entire second floor of the Fallbrook Hospital building can't be utilized by patients because it doesn’t have an elevator, which all California hospitals must have by law. It is currently used for storage.

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Comments

Ken Leighton Oct. 10, 2014 @ 1:51 p.m.

The hospital district administrator called to let me know the board members are officially known as directors of the Fallbrook Healthcare District.

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AlexClarke Oct. 11, 2014 @ 6:50 a.m.

90% of emergency room patients are not insured and that is the problem.

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Visduh Oct. 11, 2014 @ 9:36 a.m.

Ken, I think that is an exaggeration to say that Tri-City and Palomar are each thirty miles from Fallbrook. But it is true that the community of Fallbrook is rather isolated and far from the other population centers of No County. And that is probably why Fallbrook wanted its own hospital and got a small one. Seems a shame that a smaller facility like that cannot just keep on meeting the needs of the area. But a modern ER needs a large capital outlay, and then a large clientele to keep it going. This move by Fallbrook hospital may be a good decision, in that it didn't have the money or the workload to keep an ER viable.

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Ken Leighton Oct. 11, 2014 @ 11:52 a.m.

Visduh- What is happening to Fallbrook has happened scores of times to other hospitals across the country according to specialists I have spoken with. Medicare and Medicaid only pays a fraction of ER costs, leaving the hospital to go deeper in debt with most ER visits. Many ER users are simply not ensured. It takes a lot of well trained, expensive people to keep an ER open. This is a pretty easy reality to understand. But what is even more noteworthy is that the much larger Tri-City Hospital is headed down the same path. My parents who live in Oceanside and many other people I know in the Oceanside/Carlsbad/Vista area, simply don't go to Tri-City because of its reputation and because of the superior product provided by Scripps, et al. The directors at Fallbrook did the best they could with what limited options they had. They asked for any and all proposals from other major hospital groups to come on board, but none did except for Palomar and Tri-City, and a for-profit group that turned in a proposal that was lose-lose for Fallbrook. What is most remarkable is that Nathan Kaufman who gets paid big money to help hospital districts across the country negotiate through this difficult new world of modern medicine (and who happens to live in San Diego) has been very vocal about the inevitable Major Fail of Tri-City (www.utsandiego.com/news/.../better-strategy-needed-to-fix-tri-city/) and has been imploring the elected Tri-City hospital directors to affiliate with a major group before it is too late. According to what Kaufman said on a TV interview show earlier this year, these directors did not even bother to contact him and pick his brain after this piece ran. Keep in mind that Kaufman was doing this as a private citizen concerned about Tri-City's march into insolvency, NOT as a prospective client. I think it is sad that the good, well-meaning people of Fallbrook are about to hitch their wagon to a larger entity that is also in deep trouble. Palomar, by the way, is also a self-standing, not-for-profit, public entity, but it has a brand new facility and for the moment looks to be in a better position than Tri-City, but I am told Palomar like Tri-City is having trouble securing bonds with fair market rates. In other words, they can not get the money they need to make the improvements they need because of the very nature of who they are. This issue is not over for Fallbrook. Or Tri-City.

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