Vote expected to close Palm Drive Hospital, at least temporarily

Even as nurses and doctors launch a last-ditch effort to keep Palm Drive Hospital open, its board of directors is poised this week to shut down the core of the money-losing Sebastopol hospital.

On Monday, the board is scheduled to vote on resolutions that would cease acute inpatient services, close the emergency department by April 28 and "suspend," but not terminate, the hospital's license.

Hospital officials said Friday that suspension of Palm Drive's license as a general acute care hospital would most likely require the hospital to shut down for a period while it transitions to a more sustainable health care model that could include an urgent care center and outpatient services.

"Palm Drive is the largest employer in Sebastopol, and the loss of 242 jobs will have a grave impact on the community," said Debra Hurst, a registered nurse who works in Palm Drive's medical surgical unit.

Hurst, who also is a union negotiator and member of the California Nurses Union, said she and other Palm Drive staff want hospital officials to delay Monday's vote.

"We want them to hold off on this vote until options they haven't explored have been explored," she said.

But the board's president said Saturday the hospital will be out of money before any long-term solution could be properly considered, much less put into place.

"We're not putting the vote off," said Chris Dawson, the board president, who added he and his colleagues would need time to implement the shutdown, including a plan that would "ensure the safety of our patients and that our employees are taken care of.

"The bottom line is we will be out of money in the next few weeks. We have to get this process in place as soon as possible."

Assemblyman Marc Levine, D-San Rafael, is among those in the Legislature trying to fast-track his bill that would give some relief to Palm Drive's bond obligations.

Doctors have drafted a proposal to take over control of the hospital, Hurst said.

On Friday, Dr. James Gude, a pulmonary and critical care specialist with strong ties to Palm Drive, urged hospital officials not to close the facility.

"I think it will be a catastrophe," Gude said Friday during a meeting at Palm Drive with hospital officials, including CEO Thomas Harlan.

In a preliminary proposal Gude drafted last week, he suggested that management of the Palm Drive facility could be put in the hands of the Palm Drive Health Care Foundation, a nonprofit founded in 1999 when a group of local investors rescued it from closure. The following year, voters created a public agency to buy the hospital and approved a property tax to pay for it.

Under Gude's proposal, inpatient services and the emergency department could be replaced with outpatient services and an urgent care center, possibly under current licensing.

"Rent it to us and let us run with it," Gude said.

Monday's scheduled vote on ending significant hospital services follows a board vote last week authorizing Palm Drive managers to put the hospital back into bankruptcy. The hospital previously filed for bankruptcy protection in 2007 and emerged in 2010 when it sold $11 million in bonds to pay off debt and underwrite future improvements.

Dawson said while he didn't know how the vote would go on Monday, the information directors had been given on the hospital's financial situation was sobering.

"Nobody is happy about it, but this is what has to happen," he said, noting that each member of the five-person board had indicated at Tuesday's emergency meeting that the hospital had run out of viable options to stay open right now.

Hospital officials have said they need to jettison inpatient services that are draining Palm Drive's finances. The health care trend of moving from inpatient toward outpatient services has resulted in fewer overnight stays, even as both private and government insurance reimbursements decline.

In the past five years, private insurance payments at Palm Drive have tumbled 26 percent because the economic recession has reduced the number of people with insurance and insurance companies are paying less of a patient's medical costs.

Even as more North Coast residents sign up for insurance under the Affordable Care Act, many are choosing to be treated at larger hospitals for procedures that require overnight stays.

Palm Drive's administration, led by Harlan, argues that it has looked at every possible financial and business permutation to keep the hospital running. But every scenario has come up short financially, he said.

Administrators have set up an email address at thefuture@palmdrivehospital.com and are urging the public to send in comments and suggestions about the hospital's direction.