Hayward’s St. Rose Hospital Faces $3M Funding Gap By Sept. 30

Supervisors Wilma Chan and 
Richard Valle, St. Rose interim
CEO Mak Nakayama/Photo Shane Bond

ALAMEDA COUNTY//HEALTH CARE | Hayward’s perennially cash-strapped St. Rose Hospital faces a projected $3 million hole by Sept. 30, according to county officials. In addition, another $3 million in cash flow issues by next January will require the hospital to seek $6 million in funds to help keep St. Roses’s doors open.

St. Rose’s interim CEO Mak Nakayama and Alameda County Health Care Services Director Alex Briscoe noted short-term funding will begin in January to help handle the cash flow issue. A long-term plan being discussed includes one of two options, one with a private provider and another is Alameda County Health Center as a public provider. Kaiser, who has a hospital located across the street from St. Rose, has pledged their support to help maintain St. Rose. Former St. Rose CEO Michael Mahoney resigned earlier this year in the aftermath of disclosures the facility was facing the possibility of imminent cash shortages.

News of uncertainty at St. Rose came to light last Friday at Hayward City Hall during a town hall to discuss the onset of the Affordable Care Act’s affect on the struggling Hayward hospital and hosted by Alameda County Supervisors Richard Valle and Wilma Chan. “The reason we are here today is to talk about healthcare insurance and the dramatic changes that we see in the field concerning the Affordable Health Care Act and how these changes will affect not only St. Rose but healthcare throughout the county,” said Valle, in his opening statement.

Chan spelled out a dramatic desperation for health services and rising costs that have weighed heavily on the shoulders of Americans for years; especially in the post-Great Recession era. Emergency room care is an extremely expensive financial burden compared to someone seeing a primary care physician, according to Chan. St. Rose has played an important role in general and acute care but most patients are either under or uninsured and rely on St. Rose as their general and primary care provider.

Since the economic downturn hit in 2008 the county has seen a climax in uninsured residents rising from 166,000 to 199,000. Hayward has a higher rate of uninsured residents than Oakland, according to Briscoe, who added to the potency of primary care’s role in rising health care costs and St. Rose’s financial situation. “There is not now nor will there be in the foreseeable future enough primary care,” said Briscoe, “Costs are rising because not enough people are seeing their regular primary care doctor due to the lack thereof; therefore the health care industry sends citizens to the highest level of care.”

This kind of financial upheaval is an additional weight to St. Rose, whose financial struggle was heightened after the Sisters of St. Joseph left the hospital to incorporation, becoming a non-profit stand-alone hospital who has the lowest per-patient income of any hospital in the East Bay. The hospital only earns $2,494 per patient per day and is reliant on a fractional reimbursement from Medicare or Medi-Cal. In 2007, the hospital saw both Kaiser Permanente and Sutter Health support a $7 million short-term emergency fund and Alameda County has provided a straight cash subsidy of $40 million in the last five years to help keep the hospital afloat. County and local hospitals have partnered in issuing a stabilization fund of $12.25 million this past spring.

When the hospital comes into the post-medical reform era St. Roses’s role for uninsured folks will only be enhanced, according to Briscoe. “This is the most sweeping reform since Medi-Care and Medi-Caid were created and it really closes one of the great ethical and moral gaps in our society’s approach to the safety net…Now 56,000 new folks will get free health care and another 107,000 who get some help to buy healthcare on the private insurance market,” said Briscoe. Briscoe says these newly insured citizens will be entering the safety net system and handled by hospitals that have the capacity to deal with the newly insured. “Alameda County is dependent on certain hospitals on playing a certain role, handling the uninsured or underinsured,” said Briscoe, emphasizing St. Rose’s importance for that role. Meanwhile, the short-term prognosis for St. Rose may also include help from labor.

Matthew Mullany, a representative of the Teamsters Union Local 856, spoke about pension money givebacks by union members to help keep the hospital open. “What has not been mentioned is that they’ve [union members] have taken wage freezes for two years now,” said Mullany, “We have all worked in good faith for the past few years to keep the hospital open. I am here to tell you that the union is still willing to do that.”

The union representative noted a potential sub-contracting issue that may take place at St. Rose. Mullany spoke against having a sub-contractor becoming the new employer for specific departments in the hospital, “There may be two departments there now that may be sub-contracted out,” said Mullany, “It is not definite yet…I don’t believe it is the right time to do such a thing.” Mullany said that he doesn’t believe that Nakayama, an interim president, should be making long-term decisions for the hospital, which includes sub-contracting, “I say that respectfully,” added Mullany. The union representative said that at the current time it doesn’t make sense to have two different employers in the hospital at the same time because of potential labor unrest. “I don’t say that as a threat or as a challenge,” noted Mullany, “We don’t want any unrest.”    

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