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HASC-Guide:SupplementS.q 7/22/11 11:32 AM Page 19

BB--2200 ORANGE COUNTY BUSINESS JOURNAL Advertising Supplement JULY 25, 2011

ince 1923, the Hospital Association of Southern California(HASC) has effectively advanced the interests of hospitals inLos Angeles, Orange, Riverside, San Bernardino, SantaBarbara and Ventura Counties. We are comprised of 165member hospitals and health systems (public, private, not-for-

profit and for-profit), plus numerous related professional associa-tions and associate members, all with the common goal: to improvethe operating environment for hospitals and the health status of thecommunities they serve.

Working alongside the California Hospital Association (CHA), weprovide leadership at the local, state and federal levels on legisla-tion, budget concerns and regulatory issues. We work with countyboards of supervisors, chambers of commerce, local departments ofhealth and other agencies to assure the hospitalʼs voice is heard.

We serve our members through two unique organizations:HASC – a historically strong hospital trade association that serves

the political, economic and educational needs of hospitals.AllHealth – a HASC subsidiary providing specialized fee-for-serv-

ice products to help hospitals improve operations.In a changing health care environment, hospitals need assertive

representation. Through partnerships with CHA and community hospitals, we work to influ-ence the future of health care in a way that best represents hospital interests, patientsʼneeds and the communities they serve. Together, we create visionary change no hospitalcan achieve alone.

HASC helps to:� Improve quality and patient safety� Support hospital transition to value-based purchasing and health reform

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� Promote appropriate reimbursement from Medicare and Medi-Cal

� Preserve the safety net, trauma systems and access to care� Provide education, funding and promotion of disaster and

pandemic preparedness� Initiate long-range solutions to the hospital workforce shortage

HASC sponsors 25 board-appointed member committees andnumerous task forces where hospital executives can meet, conferand initiate action on policy issues. Topics for current committees andtask forces include quality and patient safety, palliative care, behav-ioral health, licensure and accreditation, managed care, emergencymedical services and contracting, among many others.

With 95% market share, our membership represents a varied crosssection of Southern Californiaʼs health care community. Membersinclude:

� 165 hospitals� 30 hospital systems� 52% non-profit facilities� 37% investor-owned facilities

� 11% government-sponsored facilities� 11 affiliated professional societies

HASC has a staff of 65 and a $22 million operating budget with offices located in LosAngeles, Orange, Riverside and Ventura Counties.

To learn more about HASC, please visit www.hasc.org or contact Julie Puentes, HASCRegional Vice President, in the Orange County Regional Office at [email protected].

IMPROVING CARE, IMPROVING COMMUNITIES

Jim Barber


JULY 25, 2011 Advertising Supplement ORANGE COUNTY BUSINESS JOURNAL BB--2211



EXECUTIVE COMMITTEE MEMBERSChair:

Richard Yochum, President/CEOPomona Valley Hospital Medical Center

Chair-Elect:Michael Hunn, SVP and Chief Executive

California RegionProvidence Health & Services

President:Jim Barber, President/CEO

Hospital Association of Southern CaliforniaTreasurer:

Douglas Bagley, CEORiverside County Regional Medical Center

Secretary:John Calderone, Ph.D., CEO

Olympia Medical CenterMembers at Large:

Richard Afable, M.D., President/CEOHoag Memorial Hospital Presbyterian

Steven Barron, PresidentSt. Bernardine Medical Center

Michael Rembis, CEOHollywood Presbyterian Medical Center

Gary Wilde, President/CEOCommunity Memorial Health System

BOARD MEMBERS (In addition to all membersof the Executive Committee)

COAST AREAChair:

Craig Leach, President/CEOTorrance Memorial Medical Center

Mark Gavens, COOCedars-Sinai Medical Center

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Chair:Gerald Kozai, President/CEO

St. Francis Medical Center

Diana Hendel, CEOCommunity Hospital of Long Beach/Long Beach

Memorial Medical Center/Miller Childrenʼs Hospital

INLAND AREAChair:

James Holmes, President/CEORedlands Community Hospital

Patrick Brilliant, President/CEORiverside Community Hospital

Karolee Sowle, CEODesert Regional Medical Center

LOS ANGELES CENTRAL AREAChair:

Beth Zachary, President/CEOWhite Memorial Medical Center/Adventist Health

Leonard LaBella, CEOVerdugo Hills Hospital

NORTHWEST AREAChair:

Gustavo Valdespino, CEOValley Presbyterian Hospital

Barry Wolfman, Chief ExecutiveProvidence Saint Joseph Medical Center

ORANGE COUNTY AREAChair:

Peter Bastone, President/CEOMission Hospital


PATIENT CARE ADMINISTRATIONBeverly Quaye, EdD, RN, Vice President,

Patient Care Services/Chief Nursing OfficerSt. Francis Medical Center

MULTI SYSTEMS REPRESENTATIVESLinda Bradley, CEO

Centinela Hospital Medical CenterPrime Healthcare Services

Mark Costa, Executive DirectorKaiser Permanente Los Angeles

Adam Darvish, Vice President, Southern California District

Kindred Healthcare

Ruthita Fike, CEOLoma Linda University Medical Center

John Schunhoff, Ph.D., Interim DirectorL. A. County Department of Health Services

Kenneth Westbrook, President/CEOIntegrated Healthcare Holdings, Inc.

SPECIAL CONSTITUENT REPRESENTATIVES

Behavioral Health Services:Gary Mittelberg, Director, Behavioral Health

Glendale Adventist Medical CenterHospital Distinct Part SNF:

Trevor Wright, Associate AdministratorProvidence Little Company of Mary Medical

Center—Torrance

EX-OFFICIO MEMBERC. Duane Dauner, President/CEO

California Hospital Association

Steve Geidt, CEOSaddleback Memorial Medical Center

Debbie Walsh, CEOFountain Valley Regional Hospital and

Medical Center

SAN GABRIEL VALLEY AREAChair:

James West, President/CEOPresbyterian Intercommunity Hospital

Philip Cohen, CEOGarfield Medical Center/Greater El Monte

Community Hospital/Monterey Park Hospital

SANTA BARBARA/VENTURA AREAChair:

James Raggio, CEOLompoc Valley Medical Center

Paul Lorenz, Hospital AdministratorVentura County Medical Center

MEDICAL STAFF LIAISONPaula Verrette, M.D., Vice President,

Quality/Performance ImprovementChief Medical Officer

Huntington Memorial Hospital

TRUSTEE LIAISONWalter Noce, Jr., Chairman of the Board

St. Joseph Health System

HEALTH CARE EXECUTIVES OF SOUTHERN CALIFORNIA

Josh Luke, Ph.D., CEOWestern Medical Center – Anaheim






Donald Lorack, CEOAHMC Anaheim Regional Medical Center

Michael Choo, CEOAnaheim General Hospital

Don Kreitz, CEOChapman Medical Center

Kimberly Cripe, CEOChildrenʼs Hospital of Orange County

Craig Myers, CEOCoastal Communities Hospital

Susan Taylor, CEOCollege Hospital—Costa Mesa

Debbie Walsh, CEOFountain Valley Regional Hospital and Medical Center

Virgis Narbutas, CEOGarden Grove Hospital and Medical Center

Sandra Yule, CEOHealthSouth Tustin Rehabilitation Hospital

Richard Afable, CEOHoag Memorial Hospital Presbyterian

Virgis Narbutas, CEOHuntington Beach Hospital

Julie Miller-Phipps, CEOKaiser Permanente Orange County

OOrraannggee CCoouunnttyy LLeeaaddeerrsshhiippAdam Darvish, VP Southern CaliforniaKindred Hospital – Brea

Adam Darvish, VP Southern CaliforniaKindred Hospital – Westminster

Virgis Narbutas, CEOLa Palma Intercommunity Hospital

Michele Finney, CEOLos Alamitos Medical Center

Kenneth McFarland, Interim CEOMission Hospital

Wayne Lingenfelter, CEONewport Specialty Hospital

Marcia Manker, CEOOrange Coast Memorial Medical Center

Kent Clayton, CEOPlacentia-Linda Hospital

Steve Geidt, CEOSaddleback Memorial Medical Center

Steven Moreau, CEOSt. Joseph Hospital

Lee Penrose, CEOSt. Jude Medical Center

Terry Belmont, CEO/Assoc. Vice Chancellor Medical Center AffairsUniversity of California, Irvine Healthcare

Virgis Narbutas, CEOWest Anaheim Medical Center

Dennis Knox, CEOWestern Medical Center – Anaheim

Daniel Brothman, CEOWestern Medical Center – Santa Ana

HOSPITAL SYSTEMS

Dr. Jonathan Wu, President/CEO/Chairman of the BoardAHMC Healthcare, Inc.

Kenneth K. Westbrook, President/CEOIntegrated Healthcare Holdings, Inc.

Barry S. Arbuckle, Ph.D., President/CEOMemorialCare Health System

Georg Hopf, President/CEO/ChairmanPacific Health Corporation

Lex Reddy, CEOPrime Healthcare Services

Deborah Proctor, CEOSt. Joseph Health System

Jeff Koury, SVP/COOTenet California





he spotlight is shining on health care costs. Itʼs an issue that generatesnewspaper headlines and debate among business leaders, policy-makers and consumers. But for all of the arguments – and accusations– that emanate from this discussion, the facts are more complex thanthe dialogue often reflects.

Californiaʼs community hospitals are on the front lines of our healthcare system. Hospitals deliver care to every patient in need – any time of theday or night – whether or not the person has health insurance or the ability topay.

Hospital charges were established more than fifty years ago to cover thecost of patient care services, with an additional amount allocated to covercharity care, bad debt and future capital needs. When Congress created theMedicare and Medicaid programs in 1965, the federal government coveredthe cost of delivering services to the enrollees of both programs. Since thattime, however, state and federal actions have been implemented that resultin significant payment shortfalls, especially in the Medi-Cal (Medicaid) pro-gram. Medi-Cal reimburses hospitals only 78% of the cost to provide hospi-tal care to the Medi-Cal beneficiaries. California ranks 49th among all states(next to the lowest) in Medicaid payments to health care providers.

Over the years, the basis upon which hospital charges are established hasevolved. Today, hospital prices are based on many factors – including gov-ernmental payment shortfalls, discounted health plan reimbursements, charity care, bad debt,county indigent patients, new technologies, labor costs and unfunded state and federal man-dates.

In 2010, California hospitals provided $12.5 billion in uncompensated care. Of that amount,more than $3.6 billion was the result of Medicare payment shortfalls and $4.8 billion was attrib-utable to underpayments from the Medi-Cal program. These inadequate governmental paymentsare set by the federal and state governments. These payment levels are expected to get evenworse in the coming years as the federal government continues to ratchet back hospital pay-ments in order to pay for health care reform and the state grapples with its own budget deficits.

When governmental programs fail to pay hospitals for the actual cost of caring for their bene-ficiaries, hospitals and other health care providers must shift these unreimbursed costs to the pri-vate sector by negotiating higher payments from private insurers and individuals who pay theirbills directly. This “cost-shifting” is not a new phenomenon. It has existed for decades as Medi-Cal and Medicare have repeatedly reduced payments to hospitals and other providers. It is what

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by C. Duane Dauner, President/CEO, California Hospital Association

former Governor Arnold Schwarzenegger termed the “hidden tax” and itaffects every Californian who pays his/her bill directly or who has privatehealth insurance. This hidden tax costs every California family more than$1,200 per year in extra health insurance premiums or in direct payments bythe self-insured who have the ability to pay their bills.

California hospitals also face challenges posed by unfunded state man-dates such as the stateʼs earthquake compliance standards – estimated bythe independent RAND Corporation to cost as much as $110 billion. The ris-ing costs for personnel, health information technology, medical equipment,prescription medications, medical education, special services such as trau-ma care and research generally are paid for by private insurance and self-insured individuals.

Compensation to labor is the largest factor affecting hospital costs.According to a recent report by the American Hospital Association (AHA),nearly 60 cents of every dollar spent by hospitals goes to pay for wages andbenefits to individuals who directly care for patients or support their care. InCalifornia, these figures are higher in part because of the stateʼs rigid nurse-to-patient ratio law – the only such universal mandate in the nation.

Other factors that drive up the cost of hospital care include an aging pop-ulation, obesity, chronic conditions and behavior-induced illnesses. The acu-ity of hospital patients is rising as a result of these forces, thereby putting

more pressure on the cost side of the health care equation.Despite all of these cost drivers, hospital care as a percent of total spending on health care

services and supplies has actually declined from 43% in 1980 to 32% in 2010. Growth in spend-ing in hospitals is less than the rise in costs for pharmaceuticals, home health and other servic-es.

Many factors affect the consumption of health care services, which in turn lead to increasedcosts. The solution to this perplexing dilemma lies in collaborative efforts to bring together keystakeholders and patients in innovative ways to improve the availability and quality of care in asafe, cost-effective manner; improve healthy behavior in all individuals; and align incentives sothat every person, whether he/she uses or provides health care, has a stake in changing thedemand and supply sides of health care.

This challenge is not for the faint of heart. It requires visionary and practical solutions, align-ment of financial and clinical incentives, commitment, collaboration, coordination and accounta-bility.


C. DuaneDauner



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� Orange County has no county hospital.� Orange County has 30 private hospitals

and one public, non-County academic hospital (UC Irvine Medical Center), 25 emergency rooms, and approximately 6,600 licensed hospital beds.

� Orange County has three trauma centers: UC Irvine Medical Center in Orange, Western Medical Center Santa Ana, and Mission Hospital in Mission Viejo. UC Irvine and Western Medical Center also serve as burn centers for the county.

� The County of Orange contracts with community hospitals to serve approximately 40,000 otherwise uninsured legal residents in the countyʼs Medical Services Initiative program (MSI).

� 27 community clinics in Orange County currently provide access to primary care for Medi-Cal beneficiaries and the otherwise uninsured. Some of these community clinics are affiliated with and financially supported by community hospitals.

� Medicaid, known as Medi-Cal in California, is administered by CalOptima in Orange County, a public agency with total annual revenues of $1.3 billion. CalOptima serves 416,220 Medi-Cal and Healthy Families members today and is projected to nearly double in size to serve approximately 28% of Orange Countyʼs population in various programs between now and 2014.

� Orange County hospitals provided over $1 billion in uncompensated care in 2009. At least half of this amount was attributable to costs of delivering care that were not covered in the Medicare, Medi-Cal and county MSI programs.

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Julie Puentes

Julie Puentes, HASCʼs Regional Vice President in OrangeCounty, works closely with the leadership of 30 hospitals here inOrange County, representing just under 20% of HASCʼs totalSouthern California membership. The Regional Office serves as thehospitals ̓ bridge with elected officials and department staff at theCounty of Orange, CalOptima (the Countyʼs Medi-Cal ManagedCare agency), and the community, facilitating communications andactivities on behalf of the hospital community as a whole.

Projects undertaken by the Regional Office span the breadth ofhospitals ̓ engagement in our communities: emergency medicalresponse, public health, disaster planning, mental and behavioralhealth, care for the uninsured, and care for the Medi-Cal population.HASCʼs focus is always about collaboration, whether the task isrelated to forging memoranda of understanding or negotiating con-

HHAASSCC iinn OOrraannggee CCoouunnttyytract language, the development of policy, the enforcement of stan-dards of care, planning in concert with law enforcement for publicsafety, or the dissemination of essential information to the public.

Hospitals are often the largest or among the largest employers ina community. HASC is actively engaged on behalf of hospitals withbusiness, community and political groups. Julie serves as a speak-er at community events on topics such as health care reform and theeconomic contributions of hospitals. The Regional Office also fieldsoccasional inquiries from the general public about hospitals and hos-pital services.

For more information about the hospital community in OrangeCounty and issues they are facing, please contact Julie [email protected].



he costs to provide health care are rising at the same time advances in medicine, anaging population and rising burden of chronic disease are increasing demand forcare, according to the American Hospital Association (AHA) and its new TrendWatchReport titled, “The Cost of Caring: Drivers of Spending on Hospital Care. Accordingto the report, issues and trends affecting rising health care costs also include invest-ments in new clinical technology, adoption of electronic health records, the growing

levels of uncompensated care for the uninsured and underinsured, and the health careʼsworkforce shortage.

While hospitals grapple with these complex and overlapping cost factors, they are work-ing to make health care more affordable and provide quality patient care.

Medical advances such as new procedures, devices, imaging technology and pharma-ceuticals have enabled people to live longer. These advances are responsible for 70% ofthe improvement in survival rates for heart attack patients and two-thirds of the reduction inmortality for those suffering from cancer, according to AHA. Less invasive surgery meanspatients can be discharged and recover faster, missing less time from work. Theseadvances lead to higher standards of care and increased utilization, which can drive upcosts.

While technological advances are leading to better patient outcomes, demographicchanges are leading to increased use of all health care services, including hospital servic-es. The number of people over age 65 will more than double by the year 2050. As peopleage they have more health problems, and consequently, require more health care services.Nearly half of all Medicare beneficiaries have three or more chronic conditions that are veryexpensive to treat. The most common of these are hypertension, arthritis, heart conditions,cognitive or mental impairments, and diabetes.

Also driving up costs is the highly trained and highly skilled health care workforce. About60 cents of every dollar spent by a hospital goes to pay for wages and benefits of healthcare workers who directly care for patients before, during and after their hospital stay.

Finally, hospitals are absorbing the cost burden for caring for the uninsured and underin-sured. As the nationʼs uninsured population continues to grow, hospitals are caring for morepatients who are unable to pay for the care they receive. Hospitals are therefore providingmore financial assistance and accruing more bad debt. At the same time, Medicaid (Medi-Cal in California) enrollment is increasing, yet payments from this government program toproviders fall well short of hospitalsʼ costs.

“Understanding these cost drivers is critical to developing strategies to contain costs,”said AHA President and CEO Rich Umbdenstock. “With need for hospital services on therise, now is not the time to cut health funding for vital health care programs. Hospitals havebeen, and will continue to be, part of the national conversation on changes that will reducecosts and improve care for all patients,” he added.

While health care costs continue to rise, hospital care is shrinking as a share of totalhealth care spending, according to AHAʼs TrendWatch Report. Hospital care costs account-ed for 33% of total health care spending in 2009, compared to 43% in 1980, as healthspending continued to rise. It remains the largest single category of health care spending,illustrating hospitalsʼ central role in caring for the most acutely ill and injured patients.

Despite the myriad of factors driving health care spending and costs for everyone, hos-pitals are seeking new approaches to reduce costs without compromising care. Some ofthese opportunities include forming partnerships among hospitals, physicians and othercare providers to better coordinate care; implementing performance improvement and other“best practice” initiatives, and developing new and more coordinated delivery models toimprove care for patients as they transition between care settings.

For additional information or to see the full AHA TrendWatch Report, please go towww.AHA.org.

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ealth care coverage is one of the most expensive benefits paid for by employers. Whetheryouʼre a small start-up, large multi-national or something in between, youʼre well aware ofthe effects that health care insurance costs have on your business, employee retentionand productivity.

Nationally, the United States spends an estimated $2 trillion annually on health careexpenses, more than any other industrialized country in the world. According to a report by

the Council on Foreign Relations, many U.S. businesses are less competitive globally because ofballooning health care costs. In addition, the annual Milliman Medical Index (MMI) reported that theannual cost of health care coverage for a typical family of four in a preferred provider plan (PPO)rose 7.3% in the past year, from $18,074 in 2010 to $19,393 in 2011.

No one can deny that our current health care system is getting more costly, more fragmentedand is unsustainable. Premium increases are at an all-time high, which is severely impacting bothemployer-sponsored and individual coverage. In addition, the severe economic downturn also hasdramatically affected Californiaʼs health care system. According to UCLAʼs Center for Health PolicyResearch, nearly 2 million Californians lost their health insurance in 2008 and 2009 because of therecession, bringing the stateʼs total number of uninsured to more than 8 million people.

The long-term goal of federal health care reform – the Affordable Care Act (ACA) – is to changethe way care is delivered and paid for. The law was designed to make it easier for more people toobtain, pay for and keep health care coverage through a variety of government, individual andemployer-based mechanisms. What is not clear about the ACA is the impact the law will actuallyhave on the rising cost of care.

Some elements of health care reform – such as incentives for improved quality and preventivecare – may help stem the tide of rising costs. On the other hand, increased utilization, resulting fromthe elimination of lifetime benefit limits and expanded access to care, may continue to drive costsupward. So what does all this mean for employers in California?

“Hospitals throughout California are both providers of health care services as well as majoremployers and we uniquely see the potential challenges and opportunities of health reform,” saidMethodist Hospital of Southern Californiaʼs President Dennis Lee. “Reforming health care is goingto create periods of uncertainty and fluctuation, but I encourage large and small employers alike tonot let the uncertainty paralyze them. Employers can look to their community hospital as a trustedpartner in getting educated on what the impacts and opportunities are,” said Lee.

In 2010, insurance market reforms and coverage provisions for small businesses were enacted,and over the course of the next three years a series of coverage expansion and financial changeswill be rolled out.

Two provisions in the law can benefit small businesses. The first is a tax credit to help small busi-nesses cover the costs of health care for their employees. The second is the health benefitexchange, which is designed to give small businesses and individuals easy access to affordableplans. Californiaʼs insurance exchange is expected to be up and running in 2014.

Under the law, small business employers qualify for the tax credits if they have less than 25 full-time equivalent employees with average annual wages less than $50,000. They must also cover50% or more of employee premiums. According to the U.S. Small Business Administration, thereare about 500,000 small businesses in the state eligible for the tax credits.

For large employers, the law intends a smooth transition for those already providing health cov-erage by exempting employer-based coverage that was in effect on March 23, 2010, from certainprovisions in the Affordable Care Act, so current coverage can continue. It creates the Early RetireeReinsurance program, which provides financial assistance to continue employer-based healthinsurance for early retirees ages 55 to 64 who are not yet eligible for Medicare. This program is abridge to 2014, when early retirees will be able to purchase affordable coverage in the new healthinsurance exchanges.

By 2014, employers that have 50 or more full time workers and do not provide affordable healthcoverage must pay an assessment based on the number of full-time workers they employ. The lawalso creates an option for employees who spend between 8% and 9.8% of their income on premi-ums to use those contributions toward their coverage as a voucher in the health exchanges, at noadditional cost to their employer.

While community hospitals develop and implement best practices to improve the quality and effi-ciency of care, health reform opens the door for purchasers – Californiaʼs employers and workforce– to drive market changes that will create a high-performing health care system, according toDennis Lee.

“The key is employer education and engagement,” said Lee. “Employers can implement healthand wellness programs that reward employees for taking action to maintain and improve theirhealth and they can choose health plans that reward providers for better health outcomes. Manycommunities will be able to take advantage of educational opportunities hosted by their communi-ty hospital so employers and employees can make intelligent choices from their health coverageoptions,” he continued.

Federal health care reform was a catalyst for policymakers, businesses, health care providersand other stakeholders to start addressing an unsustainable, costly health care system. Creatingreal reform in the future however, means creating a system that supports existing employer-basedcoverage, provides adequate access to health care services by covering more Californians andreduces costs for everyone.

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“Reforming health care is going to create periods of uncertainty and fluctuation, but Iencourage large and small employers alike tonot let the uncertainty paralyze them. Employerscan look to their community hospital as a trusted partner in getting educated on what theimpacts and opportunities are.”

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magine a five-foot tall robot help-ing to diagnose a stroke victim ina small, rural California hospital.Or you suddenly become ill on abusiness trip hundreds of milesfrom home and the emergency

room (ER) physician needs immedi-ate access to your medical records.With a simple click of a mouse, yourentire medical history now appearson an ER computer screen so physi-cians can check your last treatmentsand current prescriptions.

Twenty-first-century technologicalinnovations are happening all aroundus, and these advances are transforming how community hospitals deliver high-tech,high-quality patient care throughout California. For example, technology is helping bringurban-based specialists to patients in rural communities through remote robots andmobile video conferencing. In addition, comprehensive electronic health record systemsare enabling providers to make quicker and more informed medical decisions toimprove patient care.

“California hospitals are leading the nation in adopting new technology-based clinicaland management tools to improve the safety, effectiveness and efficiency of patientcare,” said Pamela Lane, vice president, Health Informatics at the California HospitalAssociation. “As Californiaʼs population continues to grow, age and require more healthcare services, an effective health care delivery system is critical to ensuring that every-one gets the care they need when and where they need it,” said Lane.

The use of technology in a hospital setting is not new, but a tangible change is occur-ring in how it can now reach more people, help lower costs and reduce the time patientsand doctors have to spend treating medical conditions.

“The types of innovations hospitals are deploying are improving patient outcomes.

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This translates to better value for thehealth care dollar and enables thedelivery system to shift from treatingdisease to creating wellness,” saidLane.

Hospital leaders understand thatlarge and small businesses in Californiaare becoming more discerning with thehealth care expenses for their employ-ees and themselves and are choosingproviders that are improving efficienciesand value.

Among the most cost-effective andvaluable technological advances hospi-tals are implementing are telemedicine

and electronic health records (EHRs). Both enable hospitals to break down the physicaland geographic barriers of proving and managing care for more people.

With the current shortage of specialists, primary care doctors, lab technicians and thosewith the cultural competency to care for different ethnic populations, hospitals are usingthese technologies to continue delivering the right care at the right time and prevent cost-ly medical conditions and treatments that drive up health care costs for Californiaʼs busi-ness community.

Hospitals with telemedicine capabilities are enabling physicians to provide real-timeclinical care to patients without physically being with them. Eliminating transportation andother barriers leaves more time for physicians to attend to medical matters and increasesthe ability of patients to get examinations and consultations from specialists they may nototherwise be able to access.

For example, where phone calls used to be the only remote tool available for special-ists to connect with patients in remote areas, more and more hospitals have video capa-bilities to diagnose medical conditions. An example is life-sized robots with flat screenmonitors that help doctors in metropolitan areas treat patients hundreds of miles away.Mobile video conferencing at the hospital bedside or in doctorsʼ offices enable doctors andother members of the care team to interact with the patient and family members to assesssymptoms, ask questions and discuss treatment options in real time.

Hospitals with telemonitoring services for blood pressure and blood sugar levels arehelping to reduce the need for people to go to the doctorʼs office, thereby reducingemployee absences.

Californiaʼs community hospitals have also been at the forefront of implementing com-prehensive EHRs with a patientʼs medical record, including important clinical data such asmedications, vital signs, past medical history, immunizations, laboratory data and radiolo-gy reports.

EHRs are the next step in the continued progress of health care that can strengthen therelationship between patients and their health care providers. For example, EHRs canreduce the risk of medical errors by improving the accuracy and clarity of medical records.They also give patients direct access to their records, making health information availableto help reduce delays in treatment and empowering them to make more informed deci-sions.

EHRs also allow all members of a patientʼs care team to securely and confidentiallyaccess patient files to reduce unnecessary duplication of paper and lab work as well asimprove collaboration among doctors and the entire medical team.

According to Lane, the long-term vision for EHR is that a complete record will be avail-able to every patient and his or her medical team no matter where they are located. Tothat end, the U.S. Department of Health Services has created national guidelines forEHRs and initiated $1.2 billion in federal grants for hospitals and doctors to invest in theseadvanced record systems. This is the first wave of funding under the health care reformplan to create vast records-sharing networks aimed at cutting costs and improving care inthe coming decade.

Californiaʼs hospitals are also supportive of the launch of the California TelehealthNetwork, the $30 million statewide high-speed, broadband network dedicated to healthcare.

“Federal officials have been very impressed with the progress that Californiaʼs hospitalshave made to adopt telehealth technologies to improve safety and quality,” said EricBrown, president and CEO of the California Telehealth Network. “The hospitals that havebeen able to take advantage of federal grants are adopting new technologies and break-ing down the gaps in availability of care gap between urban and rural areas. Hospitalsthroughout the state have embraced the national health policy of improving access andwellness,” said Brown.

California also has received nearly $40 million to help create a statewide health infor-mation exchange that will make it possible for patients and providers to securely sharemedical information. The network will require entities like health plans, hospitals, phar-macies, labs and doctors to become certified before they are authorized to exchangedata. Once authorized, these entities can use the network like the yellow pages to routemessages to the appropriate provider.

“The state is seeing hospitals take a more prominent role in the delivery of health careand make the necessary technological improvements to enhance the effectiveness ofcare for patients and increase the value for purchasers,” said Lane.


“California hospitals are leading thenation in adopting new technology-based clinical and management tools toimprove the safety, effectiveness and efficiency of patient care.”

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uch has been written about the predicted shortage of primary care physicians and nursing professionals within the next fewyears. Just as critical, but less well-known, is the shortage of allied health professionals – those clinicians who work both atthe bedside and behind the scenes to provide laboratory, imaging and other critical services needed to diagnose and treatpatients.

While Californiaʼs community hospitals today employ more than 440,000 high-skilled and trained health care workers, arecent survey of California hospitals, analyzed by researchers at the University of California at San Franciscoʼs Center for

the Health Professions, indicates alarming rates of retirements expected over the next five years. According to the report, a large num-ber of retirements of health care workers will lead to serious shortages of clinical laboratory scientists, respiratory therapists, physicaltherapists, radiological technologists and a host of specially trained imaging professionals, including ultrasound and MRI technologists.

This expected workforce shortage comes at the same time as the baby boom generation enters its senior years requiring increasedhealth care and as the nation prepares for fundamental changes in the health care delivery system driven by the implementation ofhealth care reform beginning in 2014.

One might be tempted to assume – given the current high levels of unemployment driven by the recession – that filling these well-paying jobs would be easy. The unfortunate reality, however, is not so simple.

“Itʼs a complex equation weʼre trying to solve,” said Cathy Martin, director of the California Hospital Associationʼs (CHA) Healthcare

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Workforce Coalition. “Nationwide, the healthsector is one of the very few sectors addingjobs in todayʼs economic climate. However,California hospitals have been particularly hardhit with a combination of factors including therecession and payment cuts from Medicareand Medi-Cal that have forced them to engagein short-term cost-cutting strategies. Thosestrategies include workforce reductions or con-solidations. While at the same time, in somehospitals, especially those in Californiaʼs ruralcommunities, positions are available but vacan-cies remain due to lack of professionals to fillthem,” she added.

Martin adds that health care jobs are expect-ed to be “an economic engine for California inthe future,” with demand for services driven byour growing and aging population. On the flipside, however, is the reality that many profes-sionals currently making up our health careworkforce are baby boomers – the very peoplewho will be retiring in the next few years.”

According to Patrice Ryan, vice president ofHuman Resources at Cottage Health System inSanta Barbara and chair of the CHA WorkforceCommittee, it is anticipated that the fastestgrowing area of health care employment will bein allied health, with a projected 63% increasebetween 2010 and 2030. “Hospitals across thestate are investing millions of dollars to helpeducate health professionals, but cuts to edu-cation budgets by the state and other fundersare creating financial gaps that canʼt be filled byhospitals alone,” said Ryan. “California is at acrossroads in determining whether it will makethe investments necessary to educate and trainits own residents to fill these jobs,” she added.

The looming shortages in the future arebringing a new sense of urgency to all stake-holders to develop innovative solutions that willimprove access to education and training forthese professions. Funding for educationshould be a top priority. Other solutions for clos-ing the gap require Californiaʼs policymakersand educational leaders to:

� Ensure health science curriculum is more closely aligned with the needs of health care employers;

� Standardize prerequisite courses across all educational institutions so students transferring between colleges are not required to retake courses, and;

� Address barriers to clinical training such as streamlining the applications process for becoming an approved clinical laboratory training site and replacing paper applications forms with online documents.

CHA formed the statewide HealthcareWorkforce Coalition in 2007 for the purpose ofdeveloping strategic solutions to the shortageof non-nursing allied health professionals. Thecoalition includes a broad cross-section ofstake holders including the University ofCalifornia, California State University, CaliforniaCommunity Colleges Chancellorʼs Office,California Labor and Workforce DevelopmentAgency, California Health Workforce Alliance,UC San Francisco Center for the HealthProfessions, California Institute for Nursing andHealth Care, Office of Statewide HealthPlanning and Development, and the CaliforniaPrimary Care Association.


Total Employees Eligible for Retirement by Occupation and Eligibility Period (Age 62)*

Occupation

# Eligible for Retirement

2010 2013 2015 Total

Clinical Lab Scientist 217 189 438 844 Respiratory Therapist 92 99 280 471

Pharmacist 76 80 260 416 Radiological Technologist 41 51 205 297 Pharmacy Technician 21 27 140 188

Physical Therapist 19 15 139 173

Total Expected Retirements 466 461 1462 2389

*According to 2010 CHA Allied Health Workforce Survey125 California Hospitals Responding



he health care sector is an economic mainstay, providing stability and even growth during times ofrecession. Health care has added an average of 24,000 jobs per month over the prior 12 months.Hospital care is an important component of the health care sector. Hospitals:

� Employ over 5.4 million people.� Are the second largest source of private sector jobs.� Spend about $342 billion on goods and services from other businesses.

The goods and services hospitals purchase from other businesses create addi-tional economic value for the community. With these “ripple effects” included,each hospital job supports about two more jobs and; every dollar spent by a hos-pital supports roughly $2.30 of additional business activity. Overall, hospitals:

� Support one of nine jobs in the U.S.� Support over $2.2 trillion in economic activity.

Read more in Beyond Health Care: The Economic Contribution of Hospitals at www.aha.org under“Research and Trends.”

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In 2009, America’s hospitals treated 127 million people in their emergencydepartments, provided care for 515 million other outpatients, performed 27million surgeries, and delivered 4 millionbabies. Every year, hospitals providevital health care services like these tomillions of people in thousands of communities. However, the importanceof hospitals to their communitiesextends far beyond health care.



aliforniaʼs community hospitals provide lifesaving care for millions of patients eachyear. Following an inpatient stay for an injury or illness, many patients require con-tinued medical care, either at home or in a specialized facility. These post-acute-careservices play an essential role in the individualʼs successful recovery and return tohealth and home.

A majority of Californiaʼs more than 400 acute-care hospitals offer at least one post-acute-care service or program. Post-acute care includes institutional-based programs, suchas inpatient rehabilitation facilities, skilled-nursing facilities (SNFs) and long-term-care hos-pitals. It also includes home and community-based services, such as home health agenciesand outpatient therapeutic services. Finally, post-acute care includes highly specialized serv-ices, such as palliative care, hospital case management and discharge planning.

The IssueAs Californiaʼs population continues to increase and age, the demand for more health

care services, including post-acute-care services, continues to grow. At the same time,health care providers are facing increased financial pressures, and are challenged by out-dated reimbursement and regulatory policies. Californiaʼs post-acute medical care system

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is complex and fragmented. Patientaccess is limited and outcomes are com-promised.

Medi-CalAt present, Medi-Cal reimbursement is

inadequate to provide optimal and cost-effective post-acute care. Authorizationand payment processes are cumbersomeand lengthy, and often lead to delays inpatient access. Reimbursement levels arepoor, so much so that many providerschoose not to care for Medi-Cal patients orto limit the number they can accommo-date. For example, in some regions, Medi-Cal beneficiaries have no access to homehealth services or adequate outpatientcare. Availability of transitional and rehabil-itative services is also limited as manySNFs do not provide a full range of med-ical and therapeutic care. As a result, indi-viduals who might otherwise be able toreturn home remain in inpatient settings atgreater cost.

Californiaʼs hospitals incur millions ofdollars in unreimbursed costs as they con-tinue to care for patients who may nolonger need to be in their facilities. Evenmore importantly, individual patients maybe prevented from returning to home andcommunity by our outdated and inade-quate payment system.

MedicareThe federal Medicare for seniors is also

equally complicated and cumbersome.Each level of post-acute care has specificand unique admission policies, programregulations and reimbursement mecha-nisms. While Medicare beneficiaries gen-erally enjoy access to a wide range ofpost-acute-care services, the fragmenta-tion and variety of providers leads to con-fusion and competition and does not pro-mote coordination of care across settings.In the context of health care reform, theCenters for Medicare & Medicaid Services(CMS) has proposed far-reaching reformsto the post-acute-care reimbursement anddelivery system.

Many of CMSʼ initiatives hold promise forimproving care transitions and patient out-come. However, if not implemented care-

fully, proposed changes to reimbursement and policy may result in decreased access toadequate post-acute-care services and compromises in patient outcomes.

Californiaʼs 430 hospitals and health systems are already working to develop creativepractices to address these difficult challenges. Hospitals have established close workingrelationships with care providers at all levels of post-acute care, both within their ownorganization and in partnership with other care providers. They work closely with commu-nity-based care organizations to identify and address community needs. Many are alsodeveloping specialized care transition programs or care coordination programs to provideimproved follow-up and patient support.

RecommendationsThe California Hospital Association (CHA) recommends developing payment and regu-

latory policies that promote care delivery across a full continuum of care, and provide ade-quate patient access to post-acute-care services, including transitional and rehabilitativeservices. CHA is committed to the long-term goal of creating “an optimally healthy society”in which every Californian has equitable access to safe, affordable, high-quality, medicallynecessary physical and mental health care.







f youʼve been to a hospital emergency room (ER) lately, you may have seen a crowded waitingroom or had to wait to see an ER physician. Thatʼs because there have been a record numberof people visiting Californiaʼs hospital emergency rooms.

In 2009, there were more than 12 million visits to Californiaʼs community hospital ERs. Thatʼsan increase of 74% since the beginning of the decade. During that same time period, more than70 hospitals and ERs closed. With more patients and fewer emergency rooms available,

Californiaʼs ERs are becoming increasingly overcrowded. ERs are now seeing more than 32,000patients every day, or nearly 1,400 patients every hour. As Californiaʼs population continues to growand age, the situation is expected to get worse before it gets better.

Emergency rooms are open 24/7 to care for everyone who enters their doors. As an emergencyroom nurse, I can tell you firsthand that weʼre on the front lines every day – caring for you, your fam-ily, friends, for the seriously ill and injured, for the uninsured and for the millions of Medi-Cal patientswho canʼt find a primary care physician to see them. Hospital emergency rooms are truly the “safe-

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by Marcus Godfrey, RN, President-Elect, California State Council, Emergency Nurses Association

ty net” provider for the communities they serve,and they are facing increasing challenges.

Due to our nationʼs slow economic recovery,jobs and employer-based insurance coveragecontinues to decline. Government-sponsoredhealth care programs are also cutting back dueto budget shortfalls, including counties that arereducing mental health services and the num-ber of available beds for psychiatric patients. Asthese and other cutbacks in the health care sys-tem occur, Californiaʼs population continues togrow and age. In short, weʼre looking at the per-fect storm of more patients, requiring moreservices, and fewer hospital and emergencyroom beds.

California now has 7 million uninsured peoplewho regularly use expensive ER servicesbecause they have no regular physician to carefor them. In addition, patients with insuranceare using ER services for the convenience ofthe 24/7 availability of services especially afterhours when doctorʼs offices are closed. Andfinally, the 8 million people covered by Medi-Cal– children, low income and the disabled – arealso adding to the overcrowding problems.Medi-Cal patients are the most frequent usersof emergency room services because most pri-vate practice physicians will not accept the sub-stantially low reimbursements rates to treatthese patients. Routine medical conditions thatwe care for from all these patient groups couldhave been more efficiently and more cost-effec-tively treated by primary care physicians andother lower-cost care settings like clinics.

Hospitals also feel the pain of the underfund-ed Medi-Cal program. California currently ranks49th out of 50 states in the level of reimburse-ments to hospitals. Last year, hospitals lost $4.6billion in under-payments from Medi-Cal. Thisfinancial burden threatens hospitals ̓ ability toprovide critical ER and other services to theircommunities.

Lastly, California has a dwindling number ofavailable beds for all the patients comingthrough the doors. In my EmergencyDepartment, we often say that the overcrowd-ing issue is not a numbers problem but a realestate problem. Approximately one-third of thebeds that are available in an average ER areoccupied by patients awaiting inpatient hospitalbeds or by mental health patients who nolonger have services provided in their counties.These patients often stay in the ER for over 24hours until another hospital or psychiatric bedbecomes available. For example, my 34-bedER shrinks to only 24 available beds while the200 patients we treat every day continue toarrive.

Today, the average wait time in a Californiahospital ER is just over four hours. Using inno-vative design and operational changes, hospi-tals and ER professionals are working togetherto more effectively manage the flow of patientsERs and insure the highest quality patient carefor everyone.

For example, hospitals that have recentlyrenovated or rebuilt hospital buildings to meetnew earthquake safety standards are increas-ing the number of ER beds whenever possibleand designing “fast-track” systems. A fast-tracksystem allows patients with non-life threateningconditions to be cared for in a separate sectionof the Emergency Department designed to

quickly care for minor emergencies such as sprains, lacerations, fevers, etc.Other hospitals are reducing wait times and increasing patient satisfaction by streamlining their

patient assessment and admitting processes. This includes a Rapid Medical Examination® processwhich has a physician stationed at the very front of the ER to quickly assess and then direct anincoming patient. This reduces the wait time for patients to see a physician and be directed to theappropriate care. Still other hospitals are authorizing nurses at the front of the ER to order lab andX-ray tests, as well as treat pain, all in an effort to reduce the time the patient spends waiting.

Itʼs no secret that wait times in emergency rooms are challenging for everyone, but emergencyroom nurses, other providers and hospitals all over California are implementing a variety of new andinnovative practices to reduce wait times for their patients and their communities.

Emergency room nurses and physicians see patients at their most vulnerable, worst moments. Itis our mission to provide the highest quality care and comfort in those times.

® Rapid Medical Examination is a registered trademark of California Emergency Physicians.





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