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CEO says Fallbrook Hospital financial state a concern


Last updated 4/4/2013 at Noon

Fallbrook Hospital CEO Kapua Conley

On March 21, at the monthly meeting of the Fallbrook Community Forum, Gordon Tinker, director of the Fallbrook Healthcare District, introduced Kapua Conley, CEO of Fallbrook Hospital, who spoke about the history, present state, and future of the community’s hospital.

Conley first discussed the healthy funding amounts extended to the hospital during its earlier years. A handout he provided stated, “In the 1990s the hospital started experiencing financial problems, mainly due to the growth of managed healthcare and escalating costs.” In 1998, the Fallbrook Healthcare district partnered with Community Health Systems (CHS) to manage the hospital under a 30-year lease. The lease has reached its 15th year. As declared in its mission statement, the Fallbrook Healthcare District “is committed to continuing services provided by Fallbrook Hospital.”

Conley said over the past 12 to 15 months many Fallbrook patients seeking healthcare from their local physician have been directed “away from Fallbrook Hospital.” One year ago, when their existing contract expired with Fallbrook Hospital, Graybill Medical Group (the largest medical group in the community, owned by Sharp Healthcare) started directing patients to other facilities for services. Conley said most of these patients could have received the same services at Fallbrook Hospital.

“Because of this deterrence in the flow of patients, Fallbrook Hospital has experienced a serious reduction in revenue,” Conley said.

Even though a new contract was established between Fallbrook Hospital and Graybill Medical, the volume did not return, so the concern is even greater now, it appears.

For patients to use Fallbrook Hospital’s services, they evidently have to insist on it with their physician, rather than take it for granted that they will be sent there.

Another negative impact to the hospital has been the growth of healthcare services over the past two years in North San Diego County and Southern Riverside County. The region has gone from experiencing a bed deficit to a bed surplus. Some of the providers that have newer facilities in the region include Loma Linda Hospital, Universal Health Services, and Palomar Hospital. It is rumored that Kaiser Permanente is currently scouting for land in the nearby Interstate 15 corridor. These entities are working diligently to entice Fallbrook patients.

When asked specifically about the volume of loss experienced by Fallbrook Hospital, Conley said, “These hospitals have aligned with managed care companies and physicians groups to bypass Fallbrook Hospital, therefore dramatically deteriorating Fallbrook Hospital’s volume of patients. He said on a year-to-date basis, surgeries at the hospital are down 50 percent and outpatient services down 20 percent.

“If an increase in patient volume is not seen within one or two years, Fallbrook Hospital will likely be forced to close,” said Conley.

Discussion ensued as to if the hospital were to close, it could have a large, negative economic impact on the community, its residents, and property values. It also would mean the surrendering of an emergency room, which could lead to loss of life due to transportation times to out-of-town facilities. Conley alluded to concern because it is the only emergency room within a 17-mile radius.

Conley said it could mean the loss of 400 jobs, loss of access to primary care services, and the loss of physicians who would deem it necessary to relocate. Fallbrook Hospital is said to be the second largest employer in town.

When asked if local physicians are aware of the problem and how they may be contributing to the hospital’s downfall, Conley said, “These physician groups have developed comprehensive relationships through managed care contracts that

for them to bypass Fallbrook Hospital and use other facilities instead.”

Ironically, it is Fallbrook Hospital that has funded the recruitment of new doctors to the town for the past six years, to help better meet the needs of the community.

The financial dilemma is undoubtedly a challenging one. Conley explained that he “doesn’t want to cut the core services that Fallbrook Hospital offers.”

“The bottom line is that Fallbrook Hospital needs the community’s physicians to support this facility (with business), which will result in an increase of patient volume,” he said.

Conley indicated there had been talk between Fallbrook Hospital and other entities to “partner,” but thus far the indication is other partners would want to force Fallbrook’s closure.

Roy Moosa, owner of Sun Realty, said if Fallbrook Hospital closes, “the community would be set back at least 10 to 15 years.”

Conversation included an idea for a Town Hall Meeting to be held so that more residents could be made aware of the current situation.


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