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Amid Budget Woes, County Looks To New Future For Kern Medical Center

May 12, 2014

Kern Medical Center (file photo)
Credit Kern Medical / Kern County

The Kern County Board of Supervisors met Monday to discuss the future of the county’s financially troubled Kern Medical Center. The Board met with hospital CEO Russell Judd and an outside consultant to outline new governance guidelines for KMC which is losing around $3 million a month.

Supervisor Mike Maggard says the hospital is at a critical juncture.

Maggard: “If we don’t stem the problem at KMC it will continue. And if it continues, it will on an on-going basis cost us jobs every year in many other [county] departments, or we can fix the problems. Or we can fix the problems at KMC once, and not have to ever again have those ripple implications on other county employees in other departments.”

According to county administrative officer John Nilon, a new budget presented by the hospital’s management would require the elimination of 111 positions in other county departments. That would be on top of the five percent cuts other county departments are already facing, which translates to about 107 positions.

KMC not only serves as a safety net hospital for the indigent, but also is a medical training facility and provides trauma care for the county. KMC averages about 150 emergency room visits a day. 

Supervisor Mick Gleason says the county should explore all options in crafting a new vision for health care in the county, including the possibility of exiting the hospital business.

Mick Gleason: "We have a moral obligation to fill our state mandates, and we will do that. The only other absolute in my mind is that we come as close to zero as we possibly can in [bringing] those losses down. Do we need to keep Kern Medical Center? My "yes" wouldn't be as bold as yours. I take a different look at it.  That would not be one of my governing principals, that we must continue to operate Kern Medical Center, it would be those two absolutes and any others that the board would consider important."

While KMC has seen its balance sheet filled with red ink for years, recent changes in the health care system have brought about new concerns. Hospital consultant Rebecca Bales of the Camden Group told the board Monday that with the expansion of MediCal under the Affordable Care Act, public hospitals have to compete for patients. 

Rebecca Bales: Public hospitals are competing with the private sector because now that patients have an insurance card, if they can find a doctor, they can go to other hospitals. 

KMC's CEO Russell Judd says the county needs to decide how to adapt to the new environment, where the health care system is shifting from paying from a fee-for-service based system to one that is based on meeting established benchmarks, or pay-for-performance.

Judd: As you now get to pay-for-performance, as you now have to manage the population, when volume goes down, typically the way hospitals have always survived, it was all about volume volume volume. Now in this new environment, when they sometimes pay you less, is volume still the answer? So how do we manage in that environment?

The KMC management team will now work with consultants to outline a plan detailing the how the hospital will function, its legal structure, alignment with physicians and the role of academic programs. A report on those matters is expected in about four months.