North Coast Journal WeeklyIn the News

January 18, 2001

 Sutter Coast, Blue Cross settle

Propane prices climbing

Prosperity Journal

Integrating Service and Tech

McKinleyville and the Mad

New member for water quality

So that's where
the money went

Sutter Coast, Blue Cross settle

THE BATTLE BETWEEN BLUE CROSS OF CALIFORNIA and Sutter Coast Hospital seems to be over, at least for now. Blue Cross announced an indefinite extension of its contract with the Crescent City hospital and two other rural hospitals Jan. 12: Sutter Amador and Sutter Lakeside. But the dispute between Sutter Health and Blue Cross on a statewide level is still unresolved.

"Sutter has offered to renew the old contract at the existing terms for these three hospitals," said Blue Cross spokesman Bill Chee in a telephone interview from Thousand Oaks. But the debate over how much insurance companies will pay for the care of patients is not over.

"I think we're going to see this sort of thing more and more, " said Penny Figas, executive director of Humboldt Del Norte Medical Society. "While insurance companies are increasing premiums charged to patients, the amount of money going back into health care isn't covering the cost of actually seeing these patients. In Crescent City, they wanted to negotiate a rate lower than what it costs to do business.

"I think the insurance companies are driving medical practices out of business. There's only so much slack that the practices can pick up. If it's costing $45 to cover overhead and insurance and everything else, and you're only being reimbursed $25 per insured, you have to make up the difference somewhere. You can't run a business like that. "

Chee says the doctors and hospitals should not blame the insurance companies for their problems. He points to three factors raising costs for health care providers.

"The first is 1997's federal Balanced Budget Act," he said. "Medicare reimbursement was cut dramatically and has yet to be fully restored. That cut into doctors' incomes and hospital incomes in a major way across the board and across the country.

"The second is increased use of new technologies -- including pharmaceuticals. There are new medical procedures and new imaging technologies, and to remain competitive, doctors and hospitals have to offer the latest and greatest medical services. Then there are new drugs which are vastly more expensive to use -- for the past three years we have seen double digit increases. Pharmaceuticals are the single fastest growing cost area in health care.

"The third is our aging population: the boomers, often referred to as `the age wave.' ... It's a fact of life that as we get older we use more health care. The sheer volume of people receiving medical care is on the increase and will continue to increase. It's a huge burden on the system."

Chee said Blue Cross is caught in the middle. The insurance companies must negotiate favorable deals with the hospitals and with employers and individuals buying coverage. Some of the employee groups are very big and carry a lot of clout. CalPERS, the California Public Employee Retirement Service, is an example.

"They have huge clout in the marketplace and they have expectations as to what is affordable and what isn't. We're trying to manage rising health care costs and trying to appease the people who buy insurance by maintaining their level of affordability. "

The dispute with Sutter is in part a byproduct of the trend towards health system consolidation. As organizations like Sutter Health grow in size they have more clout.

"We've seen this happen a number of times, " said Chee. "We're seeing extensive hospital consolidation in California. Blue Cross in fact went on the record as opposing Sutter Health's recent purchase of Alta Bates in the Oakland area. These are two huge facilities that dominate the East Bay market. The merger was so controversial that the attorney general, Bill Locklear sued to prevent it. We supported that effort, but a federal judge went forward and moved it.

"The interesting thing about it is everything we predicted would happen as a result of that merger is now coming to pass: [We said] that the hospitals would demand much higher reimbursement rates and that consumers would have a limited choice of options available. All that is happening as we speak. "

Like Sutter Health, the Sisters of Orange have been consolidating power by purchasing hospitals throughout the state.

"The recent buyout of General Hospital by St. Joe puts us in a whole new situation in that we don't have the other hospital to play the negotiation game back and forth, " said Figas. "The Sisters have the same type of negotiating power Sutter does. If they decide they don't want to play the game, we could very easily have the same type of situation down here. "

Propane prices climbing

As natural gas prices climb through the roof, they're beginning to put the squeeze on other sources of energy -- especially propane, said Dennis O'Sullivan, manager of Blue Star Gas in Garberville.

"We are attempting to partially swallow the increases by working with our controllable expenses," O'Sullivan said. But with the cost for propane rising 75 percent over the last year -- 23 percent in December alone -- the higher prices are being passed on to consumers as well.

The root of the problem is scarcity of natural gas, the price of which has risen 500 percent over the last year. Large industrial users have begun switching from natural gas to propane, eating up available supplies. Even the refineries that produce propane as a byproduct of oil processing are contributing to the problem: They have begun to burn propane instead of natural gas to heat crude oil.

It all boils down to increased prices for propane consumers, many of which do not have the option of using natural gas because of their remote location.

Prosperity Journal

The Prosperity document is a statement of the guiding principle for Humboldt County's economic development efforts. It was compiled from input by Humboldt County's local governments, community organizations and citizens.

But taking the time to read 50 pages about abstract "action matrices" is a bit much for the average Humboldter. The Prosperity Journal, a quarterly publication of the Institute of the North Coast, aims to make all that policy palatable.

Kathy Moxon, publisher of the magazine, said she hopes the journal will "give the public additional information on industry clusters," like what businesses are in which clusters, for instance. This issue centers on North Coast manufacturers, what makes them work and how they plan to grow.

She said she also hopes the publication will "raise discussion points about the quality of life so that the community can begin to talk about where it is going."

The Prosperity Journal aims to reach about 26,000 Humboldt County residents. It will be inserted into community papers like the Arcata Eye and the McKinleyville press, as well as home-delivered copies of the Times-Standard. If you live in Eureka and do not receive the Times-Standard at home, you can try picking a copy up at the county library, city hall or the courthouse. E-mail for more information.

Integrating Service and Tech

Local high schoolers will get a chance to put new computers and new skills to use on old-fashioned community projects this year, thanks to a grant from the California Department of Education.

Arcata and Eureka high schools have each received $250,000 Environmental and Spatial Technology grants. The grants will create special computer-equipped classrooms where students will learn how to use software to find solutions.

"The focus for the students' learning is to solve real-world problems," said Michelle Hutchins of the Eureka City Schools Technology Department.

One project in the works at Eureka High School is the Cooper Area Restoration Endeavor. Students will use mapping software to plan how to convert Cooper Gulch into a park, including a trail and potentially a fish hatchery. Other projects include a Eureka skate park and helping with the archaeological excavation of the town of Falk.

McKinleyville and the Mad

The idea of giving the mouth of the Mad River a permanent location was revived last week, but county officials are skeptical that the project has a chance.

Vern L. Steeves, a lifelong McKinleyville resident and 40-year crab fisherman, is backing a plan to stop the river's mouth from migrating along the beach. Steeves claims the river's migration is to blame for reduced clam populations, erosion threatening houses on a bluff overlooking the beach and the lack of nesting ground for the snowy plover.

Steeves took his case to the McKinleyville Community Services District Board Jan. 11. Acting as a representative of the Committee to Restore Razorback Clams, Steeves requested that the board write a letter in support of the project to the county government, which could in turn sponsor an application to the Army Corps of Engineers. The board agreed to write a letter to the Board of Supervisors.

Tom Marking, general manager for the district, said McKinleyville has good reason to worry about the river's migration: It is eroding a bluff where McKinleyville's water and sewage lines are buried.

But for all the good that could come of giving the mouth a permanent home, "I don't think anybody is jumping at the opportunity," said Don Tuttle, Humboldt County director of Environmental Services. He said the Army Corps of Engineers has made it clear it needs a local agency to sponsor such a project so that someone will be responsible for it later.

"The county looked into this a few years ago and anybody who locks down the mouth will be liable for any damages the river causes. We don't want to expose ourselves to that kind of liability," Tuttle said.

The McKinleyville board is asking that the county take over that responsibility, Tuttle said. "With good wisdom, they have said, `We don't want to sponsor it, but we'll write a letter of support.'"

But it's unlikely that anyone will act on such a letter because no one wants to be liable for the consequences, Tuttle said.

"I don't think this thing has a ghost of a chance. I'm surprised it has gotten this far."

New member for water quality

A new member has been appointed to the Regional Water Quality Control Board -- just a month before that board holds a hearing that will decide the future of one fifth of the Pacific Lumber timberlands in Humboldt County.

Dina Moore, a rancher in the Kneeland area, will still be brand new when she helps the board decide what actions, if any, should be taken to ensure proper water quality in the North Fork Elk, Stitz, Jordan, Bear and Freshwater watersheds, all of which are majority-owned by PL. The board's staff has recommended limiting the rate at which PL could harvest the timber in these watersheds.

Moore said that while she had not yet had a chance to familiarize herself with the facts surrounding the PL hearing, she does "have a strong background in watersheds." She has studied the environmental implications of ranching in the Van Duzen watershed as part of an EPA grant and served as the co-chair of the Environmental and Water Quality Committee of the Humboldt-Del Norte Cattleman's Association.

Being an environmentally conscious land user gives her the foundation to try and find consensus, she said.

"With greater regulations there is an inherent greater cost. For people who manage working landscapes, one of the ways they have to cover that cost is through greater extraction of the resource. I don't think that's in their best interests as stewards or best for the resource."

The PL hearing on will be Feb. 15 in Eureka.

So that's where the money went

Amid the unholy din of protests and warnings surrounding the power crisis, some very plain old fashioned waste has taken place. And we're not talking about leaving the light on in the bathroom here -- this was an almost $1.5 million mistake.

PG&E sent a letter Jan. 2 to all customers alerting them that they had until Jan. 4 to comment to the California Public Utilities Commission on a proposed rate increase. The only problem? The letters didn't get to Humboldt County residents until Jan. 8 or 9, well past the deadline for public comment.

How did we arrive at $1.5 million? There are 4.5 million PG&E customers, and each letter cost 33 cents, so that comes out to $1,485,000.

Lloyd Coker, spokesperson for PG&E on the North Coast, said he "didn't have an answer" as to why the letters were sent out late.

"We wanted our customers to have a chance to comment on the proposed rate increase," Coker said.


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