U.S. Threatens Cuts to Alameda Medical Center

OAKLAND —  The federal agency that oversees the nation’s Medicare and Medicaid programs is threatening to cut off millions of dollars in payments to Alameda County Medical Center unless it corrects a number of deficiencies that surfaced after two surprise inspections this year.

In a dramatic move that could in effect shut down the county’s largest trauma center, a public psychiatric hospital and other facilities, the federal Centers for Medicare and Medicaid Services set a Nov. 10 deadline for the medical center to fix the problems or lose 70% to 75% of its annual funding.

The threat of closure reverberated throughout the East Bay because the medical center’s Highland Hospital in Oakland is the only trauma center serving the north part of the county. Highland’s emergency room sees about 75,000 patients a year, many of whom are indigent or lack heath insurance.

In interviews earlier this month, medical center executives said they expected the federal agency to back off on its threat to halt funding. Agency officials, however, say they plan another unannounced survey of the medical center before the Nov. 10 deadline to ensure that the fixes occur.

“We are very pleased with the progress we made, and we will be in substantial compliance” when the next survey takes place, said Mike Burroughs, interim chief executive of the medical center. “I don’t anticipate [funding cuts] at all.”

But Gretchen Kane, a nurse consultant with the federal agency’s Division of Survey and Certification in San Francisco, said the threat of a funding cutoff remains.

“The facility has submitted a plan of correction,” she said. “But we haven’t made a decision whether it is accepted. We need to see how the facility will fix the most urgent problems, who will do it and how [the work] will be monitored.”

If the plan is accepted by federal regulators, “there will be another unannounced survey” to verify that the plan has resulted in concrete improvements, she said.

The threat of a funding cutoff is the latest in a series of crises to hit the medical center in the last 12 months.

In August, about 1,000 workers walked off the job for one day at all of the center’s facilities, including Highland; the John George Psychiatric Pavilion and Fairmont Hospital, both in neighboring San Leandro; and outpatient clinics in Oakland, San Leandro and Hayward.

The strikers, members of three Service Employee International Union locals, were outraged by the medical center trustees’ announcement in April of plans to cut 10% of the workforce.

The decision came a month after Alameda County voters approved a half-cent sales tax increase that is expected to provide an additional $70 million to the medical center each year for the next 15 years. Many union employees worked to pass the measure.

The hospital has undergone surprise inspections by regulators this year.

The first, in February, was triggered in part by the beating and strangulation of Dr. Erlinda Ursua, 60, on Nov. 20, 2003, in an isolated exam room at John George while she was performing a physical exam on a newly admitted 37-year-old psychiatric patient. The patient has since been charged with Ursua’s murder and is awaiting trial.

Two weeks later, another psychiatric patient, who was 38, committed suicide at the hospital.

According to documents obtained by the Oakland Tribune through the federal Freedom of Information Act, regulators laid out in detail the problems at the psychiatric hospital that were discovered in February. They included continuing to allow patients access to dangerous objects and failing to repair security systems.

The survey also found that hospital managers had failed to correct deficiencies that regulators had ordered before the February inspection.

Regulators from the state Department of Health Services came back for a second surprise inspection Aug. 12 that focused on all medical center facilities.

Though they found significant improvements at John George, the inspectors found new problems, primarily at Highland Hospital. Those included deficiencies in medical records and pharmacy operations, said Kathy Bolmer, a clinical psychologist who heads KB Behavioral Health Care Consultants.

KB, which specializes in turning around troubled mental healthcare facilities, was hired by the medical center’s trustees in March to deal with the problems at John George. Bolmer said that during an “exit conference” after the August survey, the 18-member inspection team “complimented us on the enormous changes that were made” in response to the highly critical survey in February.

Despite the John George turnaround, the threat of a funding cutoff Nov. 10 remains unless other problems are corrected.

According to Charlie Ridgell, a representative of SEIU Local 250, which represents hospital workers at the medical center, problems at the center are symptomatic of management shortcomings that stretch back more than a decade.

“There’s a culture here of sort of passing the buck,” Ridgell said. One example of the lack of accountability is the revolving door at the top. “This institution has had an average of one CEO a year for the past 12 years,” he said.

The latest threat from federal regulators may finally lead to some positive changes, he said. Last month, medical center trustees reversed themselves and abandoned their plans for major layoffs. Instead, they voted to form a labor restructuring panel composed of management, workers and physicians to look for ways to improve efficiency and reduce waste.

A key to the agreement at the center was the trustees’ pledge not to lay off anyone whose job was eliminated through the labor restructuring committee. Affected workers will be retrained for better jobs, Ridgell said.

“My hope,” he said, “is that out of this committee, instead of a culture of pessimism, we will engender a culture of optimism.”