Financially crippled Doctors Medical Center will close on April 21, ceasing to provide clinical care after 60 years of serving the community, the West Contra Costa Healthcare District Board of Directors voted on Thursday.
Despite multiple attempts in recent years to save the financially struggling San Pablo safety-net hospital, financial advisers told the healthcare district on Thursday that the facility “is on the verge of running out of money and has exhausted its ability to borrow more funds.”
DMC, which has an annual deficit between $18 million and $20 million, will no longer be able to meet its payroll and other basic operating expenses by early May, according to financial projections.
“This is a very sad day and a huge loss for our community and for all of us who have worked so hard to keep our community hospital open for all our residents in time of need,” said Eric Zell, chairman of the District’s elected board of directors, in a statement. “We have exhaustively pursued every alternative over the past weeks, months and years. Unfortunately, we have completely run out of viable and responsible options.”
The hospital’s financial problems began in the 1990s, attributable to changes in how hospitals are reimbursed for the care they provide. DMC services many uninsured patients and receives low reimbursement rates from MediCare and Medi-Cal patients.
After a third tax measure that would have closed its annual deficit failed to pass last year, the hospital was forced to dramatically reduce services, diverting all ambulances to surrounding hospitals and eliminating beds.
Several last-ditch efforts to save the hospital have not materialized, including the so-called 5×8 Plan. The five-year, eight-part proposal included the need to pass a less expensive parcel tax, to procure additional contributions from hospitals in the region, and to further slash DMC’s payroll and employee benefits.
“Thus far, key elements of the 5×8 have not materialized,” the healthcare district said, adding that a recent public opinion survey of district voters found insufficient support for another parcel tax, even if it is smaller than the one that failed to pass through voters last year.
“No financially credible investors have stepped forward,” it added.
There was hope that the DMC closure would be delayed following the $7. 5 million sale of hospital property to the City of San Pablo, but financial advisers said Thursday that that money should be used to cover the estimated $5.3 million in hospital closing costs, which include payroll, benefits and other obligations to DMC staff and hospital vendors.
“If the Board chose to keep the hospital open, the advisers said, the money from the property sales would be gone by July and DMC would then have to close but without the ability to pay its employees, doctors and vendors,” according to the healthcare district.
Contra Costa County Supervisor John Gioia said he is “deeply saddened” that DMC can no longer serve the community.
“Continuing further operations would only put the hospital deeper in debt and jeopardize its legal and fiduciary obligations to pay its employees, physicians and vendors,” Gioia said.
Because of DMC’s closure, West Contra Costa County will lose 79-percent of its inpatient hospital capacity, and an emergency department that historically has provided 59 percent of emergency treatment in West County—including all severe heart attack care.
The hospital has also provided vital outpatient services such as cancer treatment, dialysis and free breast-cancer screening for low-income women.
County officials are working on healthcare alternatives for West County patients.
For those with urgent but non-life threatening needs, officials are working with nonprofit Lifelong Medical Care of the East Bay to establish an urgent care center across the street from DMC on Vale Road in San Pablo.
People experiencing life-threatening medical emergencies always should dial 9-1-1 immediately.
Also, Contra Costa’s West County Health Center, two blocks from DMC, is adding more evening and Saturday appointments to see patients.