More on Accounting & Financial Management

Financial losses lead rural Doctors Medical Center to close

Tax deals and donations were not enough to keep the facility open.

Susan Morse, Managing Editor

A 2007 Google street view photo of Doctors Medical CenterA 2007 Google street view photo of Doctors Medical Center

Doctors Medical Center in San Pablo, Calif. closed its doors on Tuesday after losing money for years, highlighting the challenge to health systems that serve the poor.

A new urgent care facility opened nearby this week to help serve the population.

About 80 percent of Doctors’ patient revenue came from Medicare and Medi-Cal, the state’s Medicaid program while fewer than 10 percent of the hospital’s patients had private insurance, according to published reports. That resulted in financial pressure for Doctors/

[Also: These 779 hospitals actually scored Medicare bonuses]

For-profit giant Tenet Healthcare took over Doctors in 1997 but declined to renew its lease in 2004, returning the hospital to the management of the West Contra Costa Healthcare District, according to published reports.

The hospital suffered $23 million in operating losses in 2005 and another $35 million in operating losses the following year.

It survived through an influx of funds and two parcel tax measures. Kaiser, Alta Bates Summit Medical Center and Walnut Creek’s John Muir Health System kicked in a combined $17 million from 2008 through 2010 to keep Doctors open.

Residents last year rejected a third parcel tax measure.

[Also: Which states earned the most Medicare bonuses?]

In March, Eric Zell, chairman of the board of directors warned of the closure saying all other options had been exhausted.

Jan Emerson-Shea of the California Hospital Association said hospitals are losing billions of dollars over the coming years under the Affordable Care Act, according to a published report. Small and rural hospitals are most vulnerable, she said, while also being the most likely to merge with other hospital systems.

The distribution of tax money has als been an issue for some trauma centers in California.

Antelope Valley Hospital in Los Angeles County recently filed a claim against the county and its board of supervisors for allegedly failing to allocate millions in property taxes to trauma centers.

At issue is Measure B property tax money enacted in part due to the increasing cost of uncompensated care at trauma centers for patients with no insurance or ability to pay for emergency services.

Measure B generated more than $256 million in revenue in one year, yet a 2014 state audit stated more money has gone to the county's non-trauma hospital than to all 12 non-county trauma hospitals combined.

Twitter: @SusanMorseHFN