The Mendocino Coast Health Care District board has voted to file for bankruptcy protection, a move that highlights the difficulties that rural health care providers face in California, Payers & Providers reports.
Background
Mendocino Coast CEO Raymond Hino said that over the past year the district's operating position has been damaged by:
- Economic difficulties;
- A loss of market share to larger hospital operators; and
- Surgical equipment malfunctions.
Details of Bankruptcy Vote
The board voted 3-0 to enter into a chapter nine bankruptcy filing. Two board members who are local physicians and contract with the hospital abstained from the vote.
At the time of the vote, district officials projected that Mendocino Coast could lose as much as $2.5 million this year, a negative operating margin of nearly 6%.
Challenges for Rural Hospitals
Steven Valentine -- president of consulting firm The Camden Group -- said that many patients have left Mendocino Coast and other rural health providers to seek care at hospitals in urban areas. He said the rural facilities are "out in the middle of nowhere, and they have trouble getting physician support. And because of that, they have difficulty offering the full breadth of services."
Tom Petersen, executive director of the Association of California Healthcare Districts, said that physician shortages have affected many hospitals in rural areas. He said, "If you don't have surgical specialists, the secondary effect is that the patients also wind up using primary care physicians out of the area."
In addition, Hino said that it is difficult for Mendocino Coast to compete with larger providers such as Sutter Health and Adventist Health that can offer their services for lower prices (Payers & Providers, 10/18).