A new, more ambitious plan to preserve a full-service Doctors Medical Center through 2019 is being pitched by the directors of the West Contra Costa Healthcare District.
The plan, to be presented at the Healthcare District governing board meeting Tuesday, is an adjustment from the solution proposed last month by the City of Richmond and demands even more funding from uncertain sources.
The latest proposal, known as the “5-by-8 plan,” faces many of the same obstacles as Richmond’s plan, including the passage of a parcel tax, the procurement of additional contributions from hospitals in the region, and the requirement that environmental groups drop their lawsuits against the $1 billion Chevron Richmond Refinery Modernization Project in order to free community benefit funds tied to the project.
The main difference between Richmond’s plan and health district’s is the latter plan increases the amount of funding needed to keep a full-service DMC. Richmond’s plan requires funding from five sources over three years, while the health district plan calls for funding from eight sources over five years.
Under Richmond’s proposal, the Contra Costa Board of Supervisors would need to forgive $8.7 million of the hospital’s debt over three years. The health district’s proposal requires the board to forgive $15 million over five years.
While Richmond’s plan asks surrounding hospitals to shell out a combined $12.9 million over three years for a full-service hospital, the health district is asking for between $5 million and $21.5 million over five years.
And while Richmond’s plan seeks to pass a parcel tax raising about $5 million annually, the health district’s proposal believes the tax should raise between $5 million and $8 million annually.
Richmond’s proposal asking DMC to identify $2.4 million in additional cost savings is far less than what the health district is asking of hospital employees. The 5-by-8 plan not only asks DMC to identify between $3 million and $5 million annually in operational cost savings, it asks hospital staff for payroll and benefit concessions between $4.7 million and $7 million a year.
The district plan also requires increased health insurance reimbursement rates, unlike Richmond’s plan.
And both plans would use $15 million from the $90 million community benefits package tied to the Chevron Richmond Refinery Modernization Project. That funding, however, won’t be available until construction begins on the Modernization Project, which is being held up by lawsuits from environmental groups that could take months to years to resolve.
DMC is slated to run out of cash and close down early next year. Neither plan accounts for the cost to seismically retrofit the hospital by 2020, estimated to be more than $100 million.
Eric Zell, chairman of the Healthcare District board of directors, called the 5-by-8 plan “achievable but only with shared commitment and sacrifice.”
The 60-year-old DMC has had financial problems for years, mainly related to the low reimbursement rates from the hospital’s many MediCare and Medi-Cal patients. Earlier this year, the hospital was forced to dramatically reduce services, diverting all ambulances to other hospitals and reducing the number of beds, after voters rejected a parcel tax that would have closed the hospital’s $20 million annual budget deficit. Voters had previously passed two parcel taxes to keep DMC afloat.
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