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Colusa Regional Medical Center (CA) to Shutter

News  |  By Doug Desjardins  
   April 13, 2016

The 48-bed hospital is closing due to financial trouble, but will "continue its efforts during the next three to six months to seek potential buyers," its CEO says.

Colusa Regional Medical Center and its three affiliated health clinics will shut down on April 22 due to chronic financial problems.

The 48-bed rural hospital cited problems similar to Saddleback Memorial Medical Center in San Clemente, which plans to close on May 31 after years of financial problems caused by low patient volume. Colusa Regional Interim CEO and Chief Restructuring Officer Wayne Allen announced plans to close the hospital and its three clinics in a posting on the hospital's website. Allen could not be reached for comment.

"Colusa Regional Medical Center regrets to inform its community of our pending closure of the hospital on April 22, 2016. This includes our clinics in Arbuckle, Colusa, and Williams," Allen stated. "During the last three years, it has become increasingly more difficult for a small community hospital to financially survive." The nearest full-service hospital to Colusa—which is located 65 miles north of Sacramento—is in Marysville almost 30 miles away.

Allen, who was hired as interim CEO in March, said Colusa Regional has "established a plan for the transfer of the healthcare of our patients to other neighboring medical providers and the orderly shutdown of our business to assure continued patient care, quality, and safety." According to Capital Public Radio, Allen said hospital officials are currently in talks with five hospital groups interested in buying Colusa Regional and that it will "continue its efforts during the next three to six months to seek potential buyers for the hospital."

Colusa Regional has been attempting to reduce costs in recent months and on April 1 closed its birthing center. Hospital officials said the birthing center delivered approximately 140 babies each year, with most mothers covered by Medi-Cal. The hospital hoped to save up to $1 million per year by closing the birthing center.

When the decision to close the birthing center was announced in January, former CEO Walt Beck said that "rural communities have seen their hospitals go away. It's really a crisis throughout the country." At the time, Beck said Colusa Regional was not in danger of closing but that the hospital was struggling under "increased regulations" and "unfunded mandates" in addition to low Medicare and Medi-Cal reimbursements and declining inpatient volume. Colusa Regional reported a loss of $4.8 million for its fiscal year that ended March 31, 2015 and had 222 full-time employees at the time.

Colusa Regional is scheduled to close about one month before Saddleback Memorial in San Clemente. The 73-bed hospital announced in February that it will shut down on May 31 following years of financial problems caused mainly by declining patient volume. Hospital officials said its daily inpatient census is about 10 patients per day and that few surgeries are performed at the hospital.

Saddleback officials had been discussing plans to build a new outpatient and urgent care center to replace the hospital but the San Clemente City Council voted in January to rezone the hospital property so that the site could only be used for an acute care hospital, which derailed those plans.

Analysts say the upcoming closure of Colusa Regional and Saddleback Memorial San Clemente isn't part of a trend but reflects changes in healthcare that put smaller hospitals at a disadvantage. "There is no reason to expect a sudden rash of hospital closures in California, since nothing has changed in the financial or economic environment to make this a sudden trend," said Gerald Kominski, Director of the UCLA Center for Health Policy Research. "Inpatient hospital capacity has been slowly contracting for almost three decades so I see these closures as part of that long-term, gradual contraction."

Wayne Allen told a local television station, FOX40, that Colusa employees would be paid their final checks by the end of April, however, he said paid time off was not a sure thing.

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