North Coast Journal WeeklyIn the News

June 7, 2001

Jerold Phelps Hospital in crisis

National Forest logging closed

Benefits to partners

Klamath controversy continues

Jerold Phelps Hospital in crisis

The good news is that Jerold Phelps Hospital, located in Garberville, is no longer bankrupt.

"They went into bankruptcy in January 1999, but they recently had their [debt repayment] plan approved and the first payments went out," said Mark Lowry, interim chief financial officer for the hospital.

The bad news is that "even out of bankruptcy the hospital's condition is pretty fragile. It's a hand-to-mouth existence for rural hospitals," he said.

Lowry, a consultant hired by the Jerold Phelps' publicly elected board just before the hospital declared bankruptcy, said in a telephone call from his Sacramento office, that he he has worked with other rural hospitals in the same situation. Jerold Phelps is a victim of high costs and low payments, the same forces that have brought small, rural hospitals across the state to the edge of financial collapse, he said.

"First of all, rural hospitals are typically smaller, so you don't have the economies of scale they have at larger hospitals," Lowry said. "It doesn't matter if you're large or small, you still have to have a lab." Large hospitals can spread the cost of staffing and equipping that lab among a larger pool of patients.

The second big problem is one faced by all hospitals: reimbursements from government insurance programs. Patients whose care is paid for by state-run Medi-Cal programs have become an increasing burden on hospitals, as the rates the programs pay providers do not cover the costs of treatment. According to a report by the state legislative analyst, Medi-Cal pays about 47 percent as much as private insurers for the same services.

"Medi-Cal reimbursements are a real issue," said First District Assemblymember Virginia Strom-Martin. And while state reimbursements are a drain on all California hospitals, the problem is worse at rural hospitals because their clients tend to be poorer. That means a higher percentage of them rely on Medi-Cal than in an urban or suburban setting, she said.

Strom-Martin and 2nd District State Sen. Wesley Chesbro have crafted a partial solution to the problem. The two pushed for and succeeded in achieving a $2 million increase in Medi-Cal reimbursements to rural hospitals as part of the legislature's proposed budget. The money would be used to double the payments for outpatient care and would mean an extra $36,617 for Jerold Phelps and $116,492 for Fortuna's Redwood Memorial Hospital.

That funding increase has an uncertain future. A similar increase was removed from the budget last year by Gov. Gray Davis -- and that was before the energy crisis began to drain the state's surplus.

And the increase may not be enough anyway, Lowry said. "It's better than not having the $36,000," he said, "but it's hard to say if that brings Jerold Phelps into sustainability.

"I can't say whether $36,000 will make us whole."

Lowry said it will be up to local community to come up with a solution to the problem. "There are a lot of things a rural community can do to help the facility," he said. For example people should use the facility whenever possible rather than driving to Eureka. He also suggested a tax might be levied to help cover budgetary deficits.

Lowry's grassroots attitude is rooted in a realistic assessment of how much help rural hospitals can expect from state government. Strom-Martin said she fights a constant battle to get Sacramento to recognize the needs of rural counties. She recently pushed the Public Utilities Commission to exempt small hospitals from rolling blackouts; the PUC had been set to rule that hospitals with less than 100 beds were eligible for power outages [See In the News, April 12].

"We always have to bring it up because there are so few legislators that represent rural districts," she said. "It's a matter of educating urban legislators on our needs and I never pass up an opportunity to educate people on what the impacts of legislation might be."


-- reported by Arno Holschuh

National Forest logging closed

A decision by the 9th U.S. Circuit Court of Appeals has blocked the harvest of hundreds of thousands of acres of national forest land across the Pacific Northwest, including three harvest plans in Humboldt County.

The ruling came in a case that originated in the area around Roseburg in Southern Oregon. The three-judge panel ruled that the National Marine Fisheries Service didn't give enough weight to the harm logging

could cause protected salmon and trout runs. That conclusion was initially reached by U.S. District Judge Barbara Rothstein in 1999; this decision confirms her

Even though the land in the case is in Oregon, the ruling affects all national forest harvesting for which NMFS analysis was required. NMFS has to produce a report called a biological opinion for any agency activity that might adversely affect protected species.

There are three such plans in the Six Rivers National Forest, two on the Mad River and one near Orleans. The three total 3 million board feet of lumber.

Benefits to partners

School districts in Humboldt County now have the option of extending medical insurance benefits to non-traditional domestic partners of their employees.

The board of the North Coast School's Medical Insurance Group, which insures all Humboldt County school districts, the College of the Redwoods and the Humboldt County Office of Education, decided March 3 to offer the benefit extension.

Brent Howatt, executive director of the group, said that the board "was not able to identify any increase in claims cost" from extending the benefits. The extension would cover both opposite and same-sex couples who register as domestic partners with the State of California.

Howatt said he guessed some same-sex couples would decline to take advantage of the benefit because it involved going on public record as being homosexual. That might not hurt them here, he said, as "most of the same-sex couples I've talked to here feel pretty accepted in our community." The couple's concern was more that "if they went somewhere else in the state they weren't sure they wanted to be on record," he said.

Fifteen school districts have signed onto the extension, which would take effect July 1. Two -- Rio Dell and Ferndale -- have said no.

Klamath controversy continues

Legal maneuvering in the fight over the Klamath basin's scarce water continued last week as environmental groups, including Arcata's Northcoast Environmental Center, notified the federal government they intend to sue over water deliveries to farmers.

The groups allege that water deliveries by the Bureau of Reclamation to farms east of Klamath Falls put bald eagles at risk. The birds, considered threatened under the Endangered Species Act, spend winter months in the Klamath Wildlife Refuge, which the groups contend isn't getting the water it needs.

The federal Fish and Wildlife Service has issued a report that said eagles would suffer if the refuge doesn't receive sufficient water. The biological opinion states that water is necessary for waterfowl, which the eagles eat, to thrive.

"The situation now is that the water is going by the refuge, and if something doesn't change there won't be waterfowl for the eagles to dine on," said Tim McKay, executive director of the Northcoast Environmental Center.

The bureau is already under fire from farmers for not diverting enough water to agriculture; most of the farms in the Klamath basin aren't receiving any irrigation water this year. This latest suit focuses on the 70,000 acre-feet of water that are still being delivered to agriculture.


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