Catalina Tries to Improve Hospital’s Fiscal Condition

LONG BEACH AREA —  Spurred on by the efforts of a newly elected city councilman, Avalon officials may yet save the tiny hospital on Santa Catalina Island that has been operating in the red for years.

“Avalon needs a good acute hospital,” said Councilman Ralph Morrow, who campaigned on a “save the hospital” platform that won wide support in the April municipal elections. “The people here want the hospital.”

Morrow believes the hospital’s salvation lies in a federal program that aids small, rural hospitals, and in the willingness of island residents to tax themselves to help fund the facility.

The city-owned 12-bed hospital has served the island for 30 years. The facility, which has been operated under contract by Long Beach Memorial Hospital since 1984, has been losing as much as $340,000 a year. Long Beach hospital officials want out of the management contract when it expires in December, they said.

Only 26 miles from Los Angeles, Catalina is a popular Southern California playground. A million visitors a year flock into Avalon, the island’s only city, or sail into Two Harbors and other isolated coves.

Health care experts have suggested that the City Council close the hospital and operate a “super clinic” in its place. The clinic would meet the emergency medical needs of tourists and the island’s 3,000 permanent residents, city officials said.

Last year’s operational budget was $1.5 million, but with an average of only one or two patients a day, the hospital’s losses mounted, city officials reported. Over the years, Long Beach Memorial has lost nearly $2 million running the Catalina hospital, officials report.

“Obviously Long Beach isn’t anxious to renew the contract when it expires Dec. 31st,” said Avalon City Manager Chuck Prince.

Before the city elections, the council was leaning heavily toward closure because it didn’t have the money to cover the red ink. The super clinic idea seemed more affordable, until Morrow launched his campaign to keep the hospital open.

Once elected, Morrow headed for Northern California to look at two similar small, rural hospitals to find out how they had survived. One is in Cedarville, a tiny hamlet in Modoc County, the other in Garberville in Humboldt County.

Both are 18-bed hospitals that were once in financial trouble, but officials have managed to keep them open with help from the local communities. They did it by making extensive use of an obscure federal law that was passed specifically to help small, rural hospitals survive, Morrow said.

The law allows such hospitals and outpatient clinics to recover the full cost of providing care for Medical and Medicare patients, he said. Like most big-city hospitals, Avalon has been recovering only 30% of these costs, Morrow explained.

In addition to qualifying for the special rural status, both Northern California hospital districts had to go to the voters for tax increases. The communities responded by overwhelmingly approving special parcel taxes to keep their hospitals open.

“Our financial situation is still very fragile,” said Dian Pecora, administrator of the Southern Humboldt County Hospital District.

She said that even with increased federal money, the hospital couldn’t break even on its operational budget without the $250,000 raised by the parcel tax and donations. “They make the critical difference,” she said.

The Avalon City Council, which with two city employees makes up the island hospital’s board of directors, has made no decision on Morrow’s proposal.

But Prince said it looks as if the City Council is trying to keep the acute hospital open and find new ways to finance it.

Morrow is certain that the people of Avalon are willing to do whatever is needed to make sure their hospital doesn’t close.

“There’s only one rural hospital in all of Los Angeles County, and that’s us,” he said. “And that’s not going to change, because there’s 26 miles of water between Avalon and the big city.”

To adequately serve the community and the tourists, the island needs a good emergency room, two or three acute-care beds and eight or nine long-term care beds, Morrow said. The more serious medical cases can be transferred to the mainland, he said.

In addition, Morrow wants the city to recruit a full-time, board-certified family practitioner to Catalina to oversee the island’s medical needs.

Before the council makes a final decision about whether to close the hospital, Morrow wants the council to hold a town meeting in the next few weeks to report the new findings and gauge the public mood.

“We’re 30 to 45 days away from a final decision,” Prince said. “I anticipate the council will act before the end of July.”