Measure A - Where's our sales tax money going? Measure A - Where's our sales tax money going? (November 11, 2005)

Medical care for those who can't pay
by Carol Bogart

You can tell 3-year-old Eduardo Resendiz doesn't feel good. He sits listlessly on the lap of his mother, Gabriela Hernandez, at Axis Community Health Clinic on Railroad Avenue. The family is typical of those who turn to Axis for free medical care. Associate Executive Director Sue Compton defines most Axis clients as "the working poor."

In April, Axis got its fiscal 2004 Measure A money -- $500,000 -- which allowed it to extend its hours. Three months later, at the beginning of fiscal 2005, the second $500,000 was disbursed -- as it will be each July for the next 15 years. By approving Measure A, county taxpayers OK'd a one-half of one percent sales tax to help medical facilities struggling with the costs of "uncompensated care" -- or free care to the uninsured and under-insured.

ValleyCare Health System is in line for Measure A help in a planned Emergency Room expansion. The hospital also hopes to equip a van to provide free dental care to low-income kids in local schools. Those "capital improvement" projects are taking a backseat, though, to Measure A's big bailout of the Alameda County Medical Center -- known to most as Highland Hospital -- in Oakland.

Many hospitals supported that bailout, said Director of Alameda County Health Care Services David Kears, because costs associated with indigent patients who go to Highland aren't being added to other hospitals' burgeoning costs of uncompensated care.

As Measure A is written, 75 percent of the money collected goes directly to Highland. The windfall repeats every year for the next 15 years -- for a whopping total of more than $1.3 billion, maybe more if consumers start upping their spending at, say, Stoneridge Shopping Center -- or a big new auto mall proposed for Staples Ranch.

A large patient base that can't pay its bills created a deep financial hole for Highland, said Kears, although others blame years of "mismanagement" at a facility Kears acknowledges has had 10 directors in the 20 years he's been county director of health care services.

New administration is again in place at Highland where, Kears acknowledges, Measure A funds have meant unionized hospital workers who might otherwise have been laid off have kept their jobs. "Retaining qualified nurses and health care professionals" is a Measure A mandate approved by most Alameda county voters. How did Measure A do here?

Measure A did not pass in Pleasanton with the required two-thirds majority. Slightly over half of local voters said yes to a proposal that sets aside revenue generated by the new a one-half of one percent sales tax increase. That increase equals $90 million in the first year alone.

As for how the remaining Measure Funds are being divvied up, Kears said, "Nobody got everything they wanted." He adds that Tri-Valley health care facilities will get a proportionately large share of the balance not set aside for Highland.

Pleasanton, he acknowledges, kicks in the largest share of Measure A sales tax revenue as people buy such things as luxury cars, designer clothes and expensive furniture. That's not a factor, though, he said, in how much Measure A money funnels back to Pleasanton. Allocations are determined -- rightly he believes -- by how much a clinic or hospital spends caring for those who cannot pay.

According to Measure A's actual ballot language, its mission is: "To provide and maintain trauma and emergency medical services throughout Alameda County and to provide primary, preventative and mental health services to indigent, low income and uninsured children, families and seniors, to retain qualified nurses and health care professionals and to prevent closure of county clinics and the Alameda County Medical Center (Highland Hospital) ... ."

Compton said few of the children Axis sees are sent to Highland. Most, she said, are insured through Medi-Cal -- the state's insurance program for those with low or no income. If a child has a broken bone and is insured through Medi-Cal, she said, Axis refers the child to the emergency room at ValleyCare.

About 30 percent of the adults who come to Axis are sent on to Highland, she added. For many, it means a four-hour bus ride. Typically, the patient has no insurance. Adult men and women who don't have kids rarely qualify for Medi-Cal, she explains. "The state thinks they should be out working." Even then, the employer may not offer affordable -- or any -- health insurance. Medi-Cal: Insurance - sort of

ValleyCare Chief Financial Officer Ken Jensen points to Medi-Cal shortfalls as one reason a just-concluded audit of the hospital's fiscal 2004-2005 books revealed over $7 million in uncompensated care. As ValleyCare Foundation Vice-President Ken Mercer points out, with or without insurance, a Pleasanton woman in labor is not going to hop on a bus and go to Oakland.

Adding on to ValleyCare's emergency room, both say, is an urgent need. A hand-lettered sign on the wall tells it all: "Hall bed."

The emergency room is so short of beds that when things get busy, patients routinely are placed on one of four gurneys in the hall.

Collapsible curtains provide a measure of privacy when the doctor comes. But, as emergency room director Nancy Zeradnik explained, if more room is needed, it's musical beds. The patient on a bed in a shared room is wheeled out into the hall. The hall bed patient is wheeled into the room.

There aren't enough isolation rooms, either.

Just three, in a county where tuberculosis is on the rise and a recent meningitis outbreak killed three kids in Livermore and Danville. Zeradnik, a registered nurse, worries about what would happen if, say, Pleasanton came down with a bad case of bird flu.

The hospital "triages" emergency room patients -- getting immediate care to those who need it most. It beats by 20 minutes, for example, the national emergency response care standard set for someone in cardiac arrest.

And its staff has become adept at improvising. Zeradnik recalled attending to such patients -- administering drugs and prepping them for a heart catheterization -- while the patient was still on the gurney that just came off the ambulance. Sometimes, it's the only bed the emergency room has.

Patients get irritable, staff is frustrated, but the emergency room has just 12 beds when its admission records indicate it needs at least five more. So, if 20 people show up within minutes of one another on a busy night, those assessed as less in need of immediate care will just have to wait.

Jensen said, "We really need to expand the emergency room for all patients, not just (those on) Medi-Cal." Money, money who's got the money?

No one debates that ValleyCare's ER needs to grow. Just how to pay for it has been the issue.

Dollars for capital improvements like a bigger emergency room -- $1 million dollars to be exact -- in Measure A funds will be disbursed to ValleyCare as soon it starts its expansion project. Problem. Anticipated costs to complete the project are closer to $3 million.

Kears believes ValleyCare could pony up more of the needed funds itself, pointing to its recent "net gain of $5 million dollars."

Jensen acknowledges that the hospital did realize a $5 million "profit" the past fiscal year, but points out it also spent $4 million in upgrades like cutting-edge technology such as computer-assisted surgery. And, he said, ValleyCare is still paying off debt on construction bonds from prior renovations and expansions.

The hospital has other projects on the table, too, like bringing back its cancer center. Resources from investor-partners and lower interest loans are already in place, said Mercer. Financial reality, he explained, pushed fully-funded projects to the front burner. Without firm funding, Mercer said the emergency room expansion could be "delayed." Emergency Room expansion -- when?

It's a Catch 22. Until ValleyCare commits to the expansion with signed contracts, it won't get any Measure A money earmarked for capital improvements, said both Kears and Alameda County Supervisor Scott Haggerty (R-District 1).

The good news is that any "direct service" money -- money earmarked for services delivered directly to indigent patients -- that's left over after requested funds have been disbursed, plus the interest earned, is being transferred into the Measure A capital improvements funds for projects like ValleyCare's bigger emergency room and Axis' expanded clinic in Livermore, said Kears.

At Axis, Compton is grateful to Haggerty and his Measure A expert, Josh Thurman, for the money Axis has received for direct patient care. Axis helps 12,000 low-income patients every year, she said. About 3,500 live in Pleasanton.

Although providing funds to support emergency rooms that care for some patients free of charge is a Measure A mandate, just how soon ValleyCare's remodeled, bigger emergency room might be realized remains up in the air pending the hospital's ability to prove it has all its funding in place, said Mercer. Like others, Mercer had hoped for a bigger share of Measure A money to help pay for the project. Banks, he said, charge higher interest rates when those seeking the loan bring less "money-in-hand" -- in this case Measure A funds -- to the table.

The more Measure A money ValleyCare has in its pocket, the better the interest rate it can get on a loan, he added. Kears and Haggerty have told ValleyCare to apply for another $500,000 for its emergency room expansion in the next round of applications and disbursements.

Kears said, "If the economy takes off" -- i.e.: consumer confidence goes up and people start buying more -- the added sales tax would mean more money for Measure A's coffers. He said as soon as ValleyCare begins incurring costs of constructing its new emergency room, he'll start disbursing the initial $1 million approved for ValleyCare in Measure A capital improvement funds. In fact, he said, the hospital need only present him with signed contracts and he'll sign the checks.

"We want to support them, they're deserving of the support," Kears said. "We work with people."

Meantime, Haggerty, who feels strongly that no one should be denied health care because he or she can't pay, has pledged to help ValleyCare raise the needed funds for its ER project. Mercer, who is ValleyCare's chief fundraiser, said corporate sponsors like Oracle's Larry Ellison will be approached to donate money for ValleyCare's emergency room expansion, as will private benefactors. If Oracle kicks in the needed money, Mercer jokes, "We'll even name it for him."

"Uncompensated" care at ValleyCare -- 2004-2005

* $2.5 million: uninsured patients unable to pay their bills

* $4.8 million: Medi-Cal (and some Medicare) patients whose medical services weren't covered. Such services include prenatal ultrasounds and other obstetrical care, length of hospital stay or any service Medi-Cal deems "not medically necessary." For example, Medi-Cal might say a patient needs just a two-day stay, but the doctor thinks four days is warranted. Medi-Cal will pay for the first two days. ValleyCare absorbs the difference.

Total uncompensated care for 2004-2005: $7.4 million.

Plus $3.5 million for "community benefits" like the Ryan Comer Cancer Library and various free seminars

Source: ValleyCare Health System audit, Ken Jensen, ValleyCare Chief Financial Officer

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