Community lifelines on the brink

Record-setting blizzards dumped snow and knocked out power across El Dorado County in February and March.

The snow and wind shut down highways, causing accidents for some drivers and leaving others trapped at home for days at a time.

A group of local off-roaders went to work.

“We pull out a bunch of people all winter long,” Sean Fay, who lives in Pollock Pines with his wife, Lindsey Christman.

Christman has outfitted her 2015 Jeep Wrangler to be primed for the snow, with a lifted suspension, 37-inch snow tires and a winch for pulling out other vehicles that get stuck.

“If you 4x4 you’re going to get stuck at some point,” she said. “Most of the tow companies will not go out onto the trails to get you.”

In addition to helping fellow off-roaders, Christman belongs to a group of off-roaders that helps other drivers who can’t navigate the icy conditions, whether they’re a neighbor whose road hasn’t been plowed yet or a hapless out-of-towner who followed their GPS down an uncleared mountain road.

When Marshall Medical Center put out the call in late February that some of its frontline workers were having trouble getting to the hospital, Christman was one of the people who answered. She braved the blizzard to pick up a Marshall employee near her house and give him a ride to the hospital in Placerville.

“They couldn’t get their car out because there was 3 or 4 feet of snow on the ground,” she said.

Hospital CEO Siri Nelson said that group helped the hospital for days, “driving patients around, they’ve been picking up staff and dropping them off. They have been just such a huge help.”

Christman said that’s just what the community does.

“Pollock Pines is a small town so everybody bands together,” she said. “If it’s snow, if it’s fire, no matter what.”

It’s the same thing they did during the Caldor Fire in 2021, when the bulk of the damage had been done before most of the state firefighting crews arrived.

“There’s not a lot of resources, there’s not a lot of state aid, there’s not a lot of businesses,” Christman said. “So we just have to take care of each other.”

The same goes for the hospital, Nelson said. During the Caldor Fire, the hospital had nurses working side by side with the Red Cross and the county emergency medical services treating patients in the evacuation centers.

“When things really get rough, this community really pulls together,” Nelson said. “It’s part of what makes El Dorado County so special.”

Lynn Barr, an expert on rural health care, said that’s something rural hospitals have in common.

“They’re very, very passionate about their community, and they’re there to serve,” said Barr, who is on the Medicare Payment Advisory Commission, a bipartisan agency that advises Congress on changes to the Medicare program.

Rural hospitals are staffed with workers from the community, treating patients who live in the community, Barr said, so everyone knows each other.

“It’s a very tightly knit group that can really mobilize and make decisions very easily, and is ultimately always the most concerned about the patient and nothing else,” Barr said. “And that’s not necessarily true across the country and other markets.”

In rural areas, the local hospital isn’t just where patients go to see the doctor — it’s usually one of the largest institutions anchoring the community, and one of the major employers in an area where good, high-paying jobs can be few and far between.

That's why the risk to rural hospitals doesn’t just threaten the older, sicker, poorer patients who rely on them — a decline in one hospital can have ripple effects throughout the community, and into nearby cities as well.

Meeting patients where they're at

One of the regular issues rural hospitals have to tackle is how to serve a community that is more spread out and isolated than in urban areas, said Peggy Wheeler, vice president of rural health care and governance for the California Hospital Association.

“Rural hospitals are actively engaged in their communities, with the other community-based organizations to provide the kind of care that’s needed in their communities,” Wheeler said. “Maybe even more than some of the large urban systems are able to.”

That means getting creative in order to go beyond the scope of what a typical hospital does.

“They really come up with unique partnerships to be able to offer what the community needs beyond what is accepted as the inpatient acute care.”

Those partnerships are how Marshall Medical Center reaches patients across the remote river canyons of western El Dorado County.

“One of the things I think that’s a triumph for Marshall is that we actually do work very hard with our community and we meet them where they’re at to be able to get them the care that they need,” Nelson said.

That includes a community care network of volunteers who go out to patients’ homes to make sure they're getting their medications and treatments, and another volunteer service that drives patients to appointments.

“We have doctors doing home visits,” Nelson said. “We don’t always expect people to come to us.”

Currently the hospital is trying to find a way to get more patients in Georgetown — a remote community on the opposite side of the South Fork American River canyon from the hospital and most of the county — to get mammograms. Although Marshall prides itself on its breast cancer screening rate, the numbers in Georgetown are low.

“We are working with them to bring in a modular mobile medical unit to have them get their mammograms done, or help with transportation to come to where the mammogram machine is to get that done,” Nelson said. “And so we do actively look at differences in data to make sure we’re reaching out to people in all of El Dorado County.”

The remote geography is one of the biggest barriers that people in rural areas face accessing health care, said Caleb Sandford, CEO of El Dorado Community Health Centers. The health clinics it operates are federally qualified health centers — meaning they act as the safety-net health care provider for western El Dorado County, and get some extra support from the Medicare and Medicaid programs in exchange for seeing the poorest, most underserved patients.

Sandford came to El Dorado County last summer. Before that, he was on the executive team for an FQHC in Alameda County.

“I think the big difference is there are just far fewer options,” Sandford said.

The East Bay Area has more than its fair share of underserved patients — but it also has a larger patchwork of organizations serving them.

“Here in El Dorado County, there’s not that many options, and the options that there are, people may have to drive miles and miles to get to them,” Sandford said.

That can make it challenging to access care at all.

“The further that somebody has to drive to get to an appointment, the bigger that barrier is,” he said. “Not everybody has a car.”

There is no public transit in the most remote parts of the county, and even if patients do have a car, they might not have the time to travel long distances to the doctor.

“A lot of people that live in rural areas don’t have employment situations where they can take time off work, drive an hour to a medical appointment, drive an hour back,” he said.

That means those patients will often just not go, meaning they get even sicker.

“So many problems occur and get worse if people don't have timely access and proximity access to the health care providers that they need,” he said.

Good-paying jobs in a place without

Rural hospitals have additional importance to the community, even beyond the care they provide.

The two hospitals in El Dorado County — Marshall and Barton Memorial Hospital in South Lake Tahoe — are among the largest employers in the county. They have more than 2,000 workers between them — meaning that more than one out of every 100 people in El Dorado County are employed by one of the hospitals.

In the Tahoe region, where the other major employers include casinos, hotels and ski resorts, Barton is one of the few pillars of the economy providing full-time, high-paying jobs.

“Our economy currently is over 62% dependent on tourism,” said Heidi Hill Drum, CEO of the economic development nonprofit the Tahoe Prosperity Center.

For visitors, Tahoe is known around the world for its luxury resorts and as a celebrity getaway. The working-age people who make the area their year-round home, however, tend to eke out a living piecing together part-time and seasonal work cleaning hotel rooms and working in restaurants.

The lowest-income neighborhoods in El Dorado County are in South Lake Tahoe, according to census data. In the census tract along the Nevada border, in the city’s tourism core adjacent to the casinos in Stateline and Heavenly Ski Resort, the annual median income is $21,761. A third of the people in the city are working either part-time or seasonal jobs.

Even pre-pandemic, the economy had stagnated. For the last 20 years, the population in the region has been in a steady decline. By 2019, the region hadn’t regained all the jobs it lost during the Great Recession, and the ones that were regained were heavily concentrated in tourism, according to the prosperity center.

“The increase in jobs in the past couple of decades have been in the tourism sector, which typically do not pay well, and certainly do not offer health benefits,” Hill Drum said.

Then the pandemic hit. Across the country, the tourism and hospitality sectors took some of the biggest nosedives.

“The people who were most negatively impacted by the pandemic were our tourism workers,” Hill Drum said.

The Tahoe Prosperity Center spearheaded the development of a strategy to make the region’s economy less reliant on the unstable discretionary spending that feeds the tourism industry. The strategy identified health care as one of the industries to build around.

“From the overall big-picture sense, health and wellness provides really good, living wage jobs,” Hill Drum said.

According to the Bureau of Labor Statistics, jobs in the health care sector in El Dorado County pay an average of $63,000 a year — more than twice what jobs in recreation, food service and hospitality pay.

“We are proud to maintain our position as a leading employer in Lake Tahoe,” Barton CEO Dr. Clint Purvance said, in a statement to the Business Journal. “Barton employs approximately 1,000 staff and contracts with roughly 240 physicians, and through fair compensation packages provides economic stimulus for the community.”

Those types of jobs are critical to keeping young and middle-aged professionals in the community, Hill Drum said. For years, the Tahoe region has been losing residents in the 25-44 age group.

“That’s consistently tied to the problem with our housing costs,” she said.

Early and mid-career professionals are leaving Tahoe to find stable jobs that pay enough to buy a house and raise a family, leaving the young, low-wage workers and those who are older and retired.

“If we’re losing that demographic because they can’t afford housing, then that’s definitely not good for the community,” Hill Drum said.

Across the state, Wheeler said local hospitals play an important role in attracting and retaining families in rural areas.

“They’re anchor institutions,” she said. “They anchor schools and other small businesses that need folks that live in those communities to be supported.”

Typically, when people are looking for a place to live, they’re looking for a place that has health care in that community.

“So when health care leaves, often it has a direct effect on schools and other small businesses that can’t sustain after the hospital closes,” Wheeler said. “Because they anchor other services in those communities.”

Twenty miles to the nearest hospital

Late last year, Madera Community Hospital announced it would file for bankruptcy and close.

“This is a great loss to this community,” the announcement read.

The pandemic had helped push operating expenses beyond what the hospital could sustain long-term, and its planned affiliation with the Trinity Health system fell through. Trinity backed out of the deal due to the conditions placed on the acquisition by the California Attorney General.

With the closure, patients in the San Joaquin Valley county of Madera lost their only general acute care hospital, as well as the three outpatient clinics it operated targeting special populations throughout the county.

“What they have to do is one of two things,” Wheeler said. “They either have to travel now, an even longer distance to get to the next available site of care.”

The next closest hospital to Madera is 20 miles away.

“The second thing that’s very concerning is that they delay care,” Wheeler said. “So they have something wrong, a twinge, a bad headache, can’t eat, whatever it is, and instead of going into the doctor to see what might be wrong, they delay that care. And that’s going to mean that we’re going to end up with sicker people that need more resource in these other hospitals than we do now.”

Nelson said that ends up impacting the urban hospitals as well.

“All of those patients ended up going down to Fresno, and then Fresno got overwhelmed,” Nelson said. “It’s not good for anybody to not get care in your own community, because the big city hospitals, or the big Sacramento urban hubs don’t have room.”

She said Marshall already runs into that, when it’s trying to transfer a patient down the hill to get specialty care Marshall doesn’t offer.

“We struggle with finding somebody to take them because there’s no room at the inn,” Nelson said. Nelson said that has only gotten worse as health care systems contract.

She worries about the communities like Madera whose hospitals have or are at risk of closing.

“What happens to those patients? Where do they go? They have to travel, and where they’re going is already full,” she said. “So, it’s in everybody’s interest to help stabilize rural care in California.”

An urgent funding request

Nelson also serves on the board of the California Hospital Association, which, in light of the closure of Madera, is raising the alarm that other hospitals could be close behind.

“Madera was an example,” she said. “And there’s a couple other hospitals in California, they’re barely hanging on by a thread.”

This budget cycle, the California Hospital Association is lobbying state lawmakers for a $1.5 billion, one-time emergency relief allocation that would go to hospitals to supplement the reimbursements they get treating patients under the Medi-Cal program. Medi-Cal is California's implementation of Medicaid, the federal health care program for low-income individuals. According to the hospital association, Medi-Cal only reimburses hospitals for 74% of the cost to care for Medi-Cal patients, and Medicare pays 75%.

Medi-Cal’s current budget is $138 billion.

“It’s like a drop in the bucket in the total spend for the state but it would help a lot of these small rural hospitals make ends meet,” Nelson said. “So we’re really trying to get the state to at least cover the cost of the direct costs of taking care of patients covered by a state-funded plan.”

In March, the CHA sent a letter to Gov. Gavin Newsom and legislative leaders signed by leaders of 350 hospitals asking for the urgent funding to stabilize hospitals. According to the letter, communities in Visalia, Porterville, Hollister, Bakersfield, Humboldt County, Imperial County and pockets of Los Angeles are at risk of losing health care services and jobs.

“It’s a rural issue, but it’s also an inner-city issue,” Nelson said.

Jan Emerson-Shea, spokesperson for the hospital association, acknowledged that the relief money might be a tough sell, given the state’s projected budget deficit this year.

“Obviously that will be a tough, tough conversation because of the state’s budget situation declining so rapidly,” Emerson-Shea said. “But we are making a very strong push that we need this money.”

Ahead of the full budget negotiations, Newsom signed an early-action budget trailer bill to immediately create a loan program for distressed hospitals. The bill gives the program $150 million — a fraction of what the hospitals were asking for.

"While hospitals appreciate the decision by the Legislature and the governor to make $150 million available to a small number of hospitals at imminent risk of closure, dozens more hospitals are on the edge of a financial cliff,” hospital association CEO Carmela Coyle said, in a statement released before the bill signing. “Additional state budget support is needed immediately to protect access to care in communities served by more than 200 hospitals that are losing money every day to care for patients."

Whether hospitals will get the rest of the money will depend on how the budget negotiations between the governor and lawmakers shake out. In their budget priorities released in April, Senate Democrats call for $400 million each year over the next four years to assist distressed hospitals — but Newsom’s May budget plan does not include that emergency relief.

Policymakers also have designs toward reinstating a tax on health plans that are contracted to administer Medi-Cal, which would go back toward the Medi-Cal program. That tax, which raised more than $2 billion annually, expired last year. For this year, Newsom's team has reworked the tax into a new structure that would draw down more matching federal dollars and more than triple the revenue of the prior tax over the next three years. Most of that additional revenue would just be put toward preventing cuts to Medi-Cal funding, as general fund revenue drops and Medi-Cal expands, allowing more people to enter the program. But there would be some leftover that could go toward raising reimbursement rates for hospitals for some services.

The hospital association is also asking that the federal government prioritize protecting current levels of Medicare and Medicaid funding, and create annual adjustments so that Medicare reimbursements keep pace with inflation.

Barr said the Medicare program is already facing a funding crisis. The Medicare Payment Advisory Commission estimates that the trust fund that pays for Medicare will run out of money in three years.

“We have this tsunami of seniors that are going into Medicare, we’ve got the boomers going in,” Barr said. “The growth of Medicare costs in the next five, 10 years is ridiculous.”

Without action, she said many of the problems with Medicare are just going to get worse as the money runs out.

“We’re going to either have to start increasing taxes to pay for Medicare, or we’re going to have to cut benefits,” Barr said.

Constantly moving target

At Marshall Medical Center, Chief Financial Officer Laurie Eldridge describes a juggling act of trying to find grants, new Medicare or Medi-Cal programs, and other money to continue services.

“It’s just a constantly moving target of trying to find financial programs that can actually supplement the losses on the government payers,” Eldridge said. “And that’s our daily life.”

While there are rural hospitals throughout the state that are on the brink of closure, Nelson said Marshall isn’t one of them.

“Marshall is not going to go out of business. We’re not going to declare bankruptcy,” Nelson said. “That’s not going to happen because we have a great team here who may have to make some really tough decisions, but we’re going to do the right thing for this community and for our patients.”

Despite its $5.5 million operating loss last year, Marshall’s finances appear to be healthier than Madera Community Hospital’s were. Madera had been operating at a loss nearly every year since at least 2015, and within a year after the pandemic started it had to spend more than half of its cash reserves.

Marshall’s operating margins consistently hover closer around the break-even point. It has had positive margins for five of the last eight years, and has maintained the bulk of its cash reserves, although they did take a hit last year.

“I have absolute faith in this organization that we will figure this out,” Nelson said. “It is absolutely stormy waters right now. We’ve got massive seas against us.”

Eldridge agreed.

“We've been through rough times before,” she said. “It won't be the first time and it won’t be the last, and we always figure out a way.”

For the hospital, being nimble, being creative, and finding ways to plug budget gaps is constant.

“We always figure out how to get another puzzle piece to fit into the model,” Eldridge said. “Not that we won’t have seriously tough decisions and have to make choices, but it’s just part of what we do.”