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Fatal System Error

Private nonprofit hospitals, which benefit from huge tax breaks, fail to care for the East Bay's poorest residents — and now one public hospital is on the verge of collapse.

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Health experts note that Kaiser's model in some ways relies on other area institutions to provide the bulk of direct hospital care to government-sponsored patients. "Kaiser has a commitment to the health of everybody; there's no question about it," said Bert Lubin, CEO of Children's Hospital Oakland, a safety-net nonprofit hospital. "But in order for them to run their model successfully, they have to limit the number of Medi-Cal [patients] that they serve."

In fact, while all of Kaiser's California hospitals provided 12 percent of the total inpatient care in the state in 2013, they only treated 2 percent of all Medi-Cal patients.

A broader data analysis shows that, while Kaiser appears to have the worst record of admitting low-income people into its hospitals, East Bay nonprofits in general do less than the public institutions.

Like DMC, Highland Hospital and Contra Costa Regional Medical Center (the two public county hospitals) have very high rates of low-income patients. Those three hospitals in 2013 had miniscule rates of privately insured patient discharges — 9.6 percent at DMC, 5.2 percent at Highland, and 5.8 percent at Contra Costa Regional.

Statewide discharge data shows that in 2013, those three public hospitals were responsible for roughly 46 percent of the total uninsured inpatient care in Alameda and Contra Costa counties, even though they accounted for just 13 percent of all patients admitted to hospitals in the two counties. And for Medi-Cal, those three hospitals provided 31 percent of total inpatient care — a significant burden considering that California has one of the lowest reimbursement rates in the country for Medicaid, the federal program to which Medi-Cal belongs.

The two other major nonprofit hospital systems in the East Bay do more charitable care than Kaiser, but still benefit significantly from wealthier, privately insured patients.

At Sutter Health's East Bay hospitals — Alta Bates Summit Medical Center in Oakland and Berkeley, Eden Medical Center in Castro Valley, and Sutter Delta Medical Center in Antioch — 31 to 35 percent of the inpatients discharged in 2012 and 2013 had private insurance. About 5 percent were uninsured and the rest had government-sponsored insurance. Compared to Kaiser, however, Sutter treated a much larger share of patients outside of the commercial market. The Sutter hospitals combined had roughly 23 percent of the total number of East Bay inpatients and cared for a roughly proportionate share of the region's total government-sponsored patients — 26 percent. And 17 to 21 percent of uninsured patients admitted to hospitals in the East Bay were treated at a Sutter facility.

John Muir Health, which has campuses in Walnut Creek and Concord, falls in between Kaiser and Sutter in terms of its care for low-income people. In 2012 and 2013, roughly 42 percent of its hospitals' inpatients had private insurance while about only 3.5 percent were uninsured (and the rest were government-sponsored). In those two years, John Muir's hospitals treated about 13 percent of all East Bay inpatients — and an equivalent share of the counties' total government-sponsored patients, also roughly 13 percent. About 8 to 9 percent of all uninsured patients in the area were admitted to John Muir hospitals during that time.

But the data, of course, only tell part of the story. It's inside the hospital walls that you see the true impact of this inequitable system.


When an older Richmond resident had chest pain last month, his doctors decided to call an ambulance to take him to the hospital. The man was a dialysis patient and someone who Dr. David Weiland, a DMC cardiologist, had treated in the past. But because the hospital is now closed to ambulances, the patient ended up at Kaiser Richmond. According to Weiland, Kaiser soon transferred the patient to Kaiser San Francisco where doctors put multiple stents — small tubes that restore blood flow to narrow or blocked arteries — into his heart.

After the operation, the patient was in severe pain, according to Weiland, who subsequently spoke with the man's relatives. "The family said, 'He's too sick to leave the hospital,'" Weiland said. But Kaiser allegedly told the family that if he stayed longer at the San Francisco hospital, the family would be financially responsible for the bill. Weiland said the patient had health insurance through Medi-Cal, which could have motivated Kaiser's response, (although he said there's no way to know for sure). Either way, the patient was discharged and the family drove him back to Richmond. As soon as they arrived, he started complaining again of severe pain, prompting the family to immediately drive him to DMC.

By the time he showed up at the San Pablo hospital, the patient was in shock, meaning he had suffered a serious complication from his procedure, according to Weiland, who attempted to stabilize him. It was too late. He died a day after he arrived to DMC.

In short, said Weiland, it appeared that the patient's care at Kaiser was incomplete and that the San Francisco facility had pushed him out before it was safe to do so. "He was chronically sick," said Weiland. "Very sick people need to be taken care of differently than a normal patient."

Weiland declined to identify the patient, but said he called Kaiser representatives to get more information about the man's care at the San Francisco hospital. A Kaiser spokesperson declined to comment on the case, citing patient privacy, but said that physicians only discharge patients when they feel it's medically appropriate.

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