BILL ANALYSIS                                                                                                                                                                                                    Ó



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          Date of Hearing:  April 28, 2015


                            ASSEMBLY COMMITTEE ON HEALTH


                                  Rob Bonta, Chair


          AB 911  
          (Brough) - As Amended April 14, 2015


          SUBJECT:  Hospitals:  closures.


          SUMMARY:  Authorizes Saddleback Memorial Medical Center (SMMC)  
          to operate an emergency department (ED) at its San Clemente  
          campus after the hospital at that site is closed.  Contains an  
          urgency clause to ensure that the provisions of this bill go  
          into immediate effect upon enactment.  Specifically, this bill:   



          1)Allows SMMC to operate an ED at its San Clemente campus if the  
            following requirements are met:


             a)   The ED is operated under the consolidated license of  
               SMMC and meets all of the requirements imposed under that  
               license, including being within 15 miles of its parent  
               hospital;


             b)   The ED is converted from a previously existing acute  
               care campus and not a newly developed freestanding ED;


             c)   The ED is open 24 hours a day, 365 days a year;








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             d)   The ED is staffed with at least one board-certified  
               emergency physician at all times;


             e)   The ED is staffed with properly trained emergency room  
               nurses and meets the minimum staffing requirements for EDs  
               in this state;


             f)   The ED has a complete range of laboratory and diagnostic  
               radiology services, including a complete array of lab test,  
               basic X-ray, computerized tomography (CT) scan, and  
               ultrasound capabilities;


             g)   The ED meets the specialty call requirements, as defined  
               by the Orange County Emergency Medical Services Agency,  
               under its consolidated license;


             h)   The ED has transfer agreements with specialty centers,  
               such as trauma, burn, and pediatric centers, to meet the   
               needs of the injury or patient population served in the  
               community; and,


             i)   The ED has a fully functioning transport program with  
               the capability to safely transport patients who require  
               admission to its parent hospital or other higher level of  
               care and specialty services facilities, such as trauma,  
               burn, and pediatric facilities.


          2)Requires all applicable federal and state regulatory  
            requirements to be met under the consolidated license of SMMC,  
            including all applicable regulations of the Centers for  
            Medicare and Medicaid Services (CMS) and Title 22 of the  








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            California Code of Regulations.



          3)Specifies that nothing in these provisions requires the  
            hospital to provide for acute care services at the San  
            Clemente Campus, or to seek additional licensure for operation  
            of the ED.


          EXISTING LAW:  


          1)Provides for the licensure and regulation of health facilities  
            by the California Department of Public Health (DPH). 


          2)Defines a general acute care hospital as a health facility  
            having a governing body with administrative and professional  
            responsibility and organized medical staff that provides  
            24-hour care, including the following basic services:   
            medical; nursing; surgical; anesthesia; laboratory; radiology;  
            pharmacy; and, dietary.
          3)Authorizes DPH to grant a special permit for a health facility  
            to provide one or more special services, including emergency  
            center services.


          4)Defines an ED as being located in a hospital licensed to  
            provide emergency medical services (EMS).


          5)Requires DPH to issue a single consolidated license to a  
            general acute care hospital that includes more than one  
            physical plant maintained and operated on separate premises or  
            that has multiple licenses for a single health facility on the  
            same premises if the general acute care hospital meets certain  
            criteria and applicable requirements of licensure.









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          EXISTING STATE REGULATIONS:  


          1)Define comprehensive EMS as the provision of diagnostic and  
            therapeutic services for unforeseen physical and mental  
            disorders which, if not promptly treated, would lead to marked  
            suffering, disability, or death.  The scope of services is  
            comprehensive with in-house capabilities for managing all  
            medical situations on a definitive and continuing basis.


          2)Detail the requirements for providing comprehensive EMS which  
            include, among other things:


             a)    EMS are to be located in the hospital so as to have  
               ready access to all necessary services;
             b)   Comprehensive EMS are to be identified to the public by  
               an exterior sign, clearly visible form public thoroughfares  
               which states:  COMPREHENSIVE EMERGENCY MEDICAL SERVICE  
               PHYSICIAN ON DUTY; 


             c)   Requiring radiological services, clinical laboratory  
               services, and surgical services to be immediately available  
               for life-threatening situations.


          3)Detail the requirements for comprehensive emergency medical  
            service staff which includes:
             a)   A full-time physician trained and experienced in  
               emergency medicine;
             b)   Provides continuous staffing with physicians trained and  
               experienced in emergency medical service, and requires such  
               physicians to be assigned to and be located in the  
               emergency service area 24 hours a day; and,










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             c)   Provides experienced physicians in specialty categories  
               to be available in-house 24 hours a day, including such  
               specialties as medicine, surgery, anesthesiology,  
               orthopedics, neurosurgery, pediatrics, and  
               obstetrics-gynecology.


          EXISTING FEDERAL LAW.  The Emergency Medical Treatment and  
            Active Labor Act, (EMTALA) was passed in 1986 as part of the  
            Consolidated Omnibus Budget Reconciliation Act.  It requires  
            hospitals that accept payments from Medicare to provide  
            emergency health care treatment to anyone needing it  
            regardless of citizenship, legal status, or ability to pay.   
            There are no reimbursement provisions.  Participating  
            hospitals may not transfer or discharge patients needing  
            emergency treatment except with the informed consent or  
            stabilization of the patient or when their condition requires  
            transfer to a hospital better equipped to administer the  
            treatment.  EMTALA applies to "participating hospitals."  The  
            statute defines participating hospitals as those that accept  
            payment from CMS under the Medicare program.  Because there  
            are very few hospitals that do not accept Medicare, the law  
            applies to nearly all hospitals.


          FISCAL EFFECT:  This bill has not been analyzed by a fiscal  
          committee.


          COMMENTS:  


          1)PURPOSE OF THIS BILL.  According to the author, this bill will  
            help preserve life-saving emergency care services at San  
            Clemente's SMMC.  The author notes for over 40 years, this  
            hospital has served as the only emergency care facility in the  
            city of San Clemente and its neighboring communities, however,  
            MemorialCare, the hospital's owner, is considering plans to  
            convert it into an ambulatory health care campus that would  








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            provide outpatient surgery and urgent care services.  The  
            author states this bill is intended to authorize SMMC to  
            operate a stand-alone emergency room for purposes of  
            stabilizing patients prior to transfer to any other hospital  
            in the region. 

          The author contends, without this legislation, this hospital  
            closure could force residents to travel 15 miles to reach the  
            next closest emergency room thus increasing mortality rates,  
            which will have a tremendous impact on the community,  
            especially given the fact that San Clemente has such a large  
            population of children and elderly people who are most  
            dependent on life-saving services.  The author adds that  
            underserved communities would also be adversely affected with  
            limited access to affordable and quality healthcare.
          
          2)BACKGROUND.


          
             a)   SMMC.  SMMC is a 325 bed non-profit hospital serving  
               approximately 800,000 residents in south Orange County.  It  
               operates two acute campuses under a single consolidated  
               license; the 252 bed Laguna Hills campus, and the 73 bed  
               San Clemente campus.  Saddleback is part of the non-profit  
               MemorialCare Health System.  Saddleback and MemorialCare  
               have worked over the last decade to transform their  
               services from an acute care hospital-centric delivery  
               system, to a population health-based delivery system.  They  
               have made significant investments in chronic disease  
               management infrastructure and care navigation personnel  
               aimed at finding new and innovative ways to care for  
               patients in non-acute care settings.  A consequence of  
               these efforts has been that their inpatient volumes have  
               fallen.  For the last decade, the average inpatient census  
               was around 25.  In recent years, the average census has  
               dropped to below 14 on average, with many days below 10.   
               These trends have created concerns regarding the acute care  
               viability of the San Clemente campus.  Thus, MemorialCare  








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               has proposed closing and demolishing the hospital, and  
               building and new outpatient clinic with an urgent care  
               center.  The surrounding communities, concerned about  
               access to emergency services, transport and wait times,  
               have created a coalition to try to keep the ED open, hence  
               this bill.

             b)   Freestanding EDs (FEDs).  FEDs have existed for almost  
               40 years.  They first emerged in the early 1970s as a  
               result of the need for emergency care in rural or other  
               underserved regions of the eastern United States.  Some of  
               the first FEDs have now expanded to become full hospitals,  
               while others have remained freestanding facilities.  There  
               is no strict definition for FEDS, but they are generally a  
               facility that provides emergency care but is separate from  
               an acute care hospital.  In recent years FEDs have opened  
               in Florida, Illinois, Texas, and Washington.  According to  
               a 2009 California Healthcare Foundation report,  
               "Freestanding EDs: Do They Have a Role In California?" the  
               motivations for constructing FEDs most commonly include the  
               following:



               i)     Providing enhanced access to care and meet an  
                 increasing demand for emergency services;

               ii)    Developing sites and services that differentiate the  
                 organization from its competitors;



               iii)   Gaining increased market share;



               iv)    Providing a referral source for affiliated  
                 physicians;









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               v)     Increasing the potential for referring patients to  
                 hospital-based services; and, 



               vi)    Increasing the potential for mitigating competitive  
                 threats.



               The California HealthCare Foundation (CHCF) report also  
               notes that no FEDs offer trauma services to severely  
               injured patients, those cases are typically directed by EMS  
               authorities to the nearest trauma center.  FEDs are  
               typically within 15 to 20 miles of a hospital.  The report  
               also goes on to note that because most FEDS do not receive  
               EMS/911 transports, the majority of their patients walk  
               into the FED and are lower-acuity patients.



             c)   EDs.  Under existing law an ED is defined as the  
               location in a hospital where emergency services are  
               provided.  All licensed general acute care hospitals are  
               required to meet eight basic services.  An ED is considered  
               a special service, which requires additional approval from  
               DPH.  Historically, ED visits have driven hospital  
               admissions.  A 2013 RAND Corporation report, "The Evolving  
               Role of Emergency Departments in the United States," notes  
               that emergency rooms account for about half of the nation's  
               hospital admissions and accounted for virtually the entire  
               rise in admissions between 2003 and 2009.  ED costs  
               correspond to the severity of a patient's illness or  
               injury, the number of diagnostic tests and/or treatments  
               performed, physicians' fees (typically about 20% to25% of  
               the total charges), radiology or specialist services, and  
               any pharmacy or other hospital expenses.  For example, an  








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               ambulance ride alone can cost between $400 and $1,200,  
               depending upon location, distance from the hospital and  
               services performed.  Costs vary widely in different parts  
               of the country and ultimately depend upon who pays - the  
               individual, a private health insurer, or a government  
               agency like Medicare or Medicaid.

             d)   Urgent care clinics.  The definition of urgent care  
               varies, but most facilities provide unscheduled care,  
               after-hours access, expanded services compared to primary  
               care, and a lower cost than emergency care.  On-site X-ray,  
               intravenous medications and fluids, repair of lacerations,  
               foreign body removal, basic fracture care, and treatment of  
               abscess are most common.  According to a 2012 report  
               published in the American Journal of Clinical Medicine,  
               "Urgent Care Centers, an Overview," several sources have  
               reported that the cost of care for comparable medical  
               problems in urgent care, although slightly more than  
               primary care, is usually between 10% and 33% of the cost of  
               emergency care.  Copays vary from zero to as much as $100.   
               Usually they are less than $50.



          3)SUPPORT.  The San Clemente City Council supports this bill,  
            noting it does not propose changing the hospital and emergency  
            structure throughout the state, but proposes a standalone ED  
            solely for this unique geographic region in South Orange  
            County.  The City Council states there are two main concerns  
            with the potential loss of the emergency room:  a) financial  
            impact; and, b) health impact.  They note that fiscally, the  
            city's public safety costs would increase, thus costing  
            taxpayer more as local paramedics would have to deploy out of  
            town onto the already congested I-5 freeway on all 911 calls,  
            making ambulances and their firefighter operators less  
            available in town.  The City Council continues, as for the  
            health impacts, these would be critical to those in need  
            should the ED close as it currently treats 15,000 ED patients  
            per year and admits over 4,000 patients per year.








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          The Orange County Fire Authority (OCFA) supports this bill,  
            noting they have reviewed call data for the two emergency  
            transport units in San Clemente.  They state in 2014 there  
            were 1,701 total transports of which 1,217 (72%) were  
            transported to SMMC.  OCFA contends that without an emergency  
            room at this facility the OCFA would be required to transport  
            patients to hospital further away and possibly delaying  
            treatment.

          Save Saddleback San Clemente Hospital is coalition of concerned  
            citizens' in San Clemente supporting this bill.  They note  
            they are effectively a peninsula, with Camp Pendleton to the  
            south, protected forest to the east, the ocean to the west,  
            and only one road north, 1-5, with which to access emergency  
            services.  They also point out that an I-5 widening project  
            has just started closing shoulders and ramps intermittently  
            and that this project will last three years, potentially  
            increasing transport times.

          SMMC is in support of this bill because they desire to continue  
            to serve the community's EMS needs, including continuing to  
            receive paramedic traffic and seeing all emergent patients  
            without regard for their ability to pay.
          
          4)OPPOSITION.  The California Chapter of the American College of  
            Emergency Physicians (California ACEP) is opposed to this bill  
            stating, freestanding EDs are facilities that provide urgent  
            care, but are not attached to acute care hospitals.   
            California ACEP notes, while the words 'emergency department'  
            are in the title of these facilities, they operate like urgent  
            care clinics; the very nature of an ED is that it is a  
            department of a hospital, a place where patients have  
            immediate access to a wide variety of treatment services and  
            specialists when necessary to treat their serious conditions.   
            California ACEP concludes, allowing urgent care facilities to  
            contain the word emergency in the title poses safety risks to  
            patients who arrive at the door assuming they can receive  
            full-scope ED care.








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          The California Labor Federation (CLF) is opposed to this bill  
            because to be licensed in California for EMS, a facility must  
            provide specialized urgent service onsite, including intensive  
            care services, laboratory, radiology, surgical services,  
            post-anesthesia recovery, and blood banks.  CLF also notes the  
            current law states that an ED is in a hospital licensed to  
            provide emergency services, which indicates that an ED is  
            required to be part of a health facility providing other  
            support services.  Finally, CLF states, this bill will  
            undermine existing law and regulations governing the operation  
            of ED by allowing a freestanding ED without appropriate  
            regulation and oversight.

          The California Nurses Association is opposed to this bill  
            stating that SMMC is currently planning to convert its acute  
            care hospital to outpatient services because of a purported  
            lack of need for acute care hospital beds, and when making the  
            argument to the community for the need for the new outpatient  
            service center, the hospital makes the following argument  
            against the need for an ED:



               The majority of patients treated in area emergency rooms do  
               not need to be seen in an ED; they could be seen in other  
               high quality, convenient settings if they were available.   
               EDs are the most expensive places to receive care, and we  
               hear this from many of our patients. In the six hospitals  
               in the Memorial Care health System, more than half of all  
               patients are treated for relatively simple conditions such  
               as ear infections, laceration repairs, and minor orthopedic  
               injuries.  Even a high percentage of ambulance transports  
               are not life or limb threatening.  EMS systems throught the  
               state are aware of this and are seeking ways to help reduce  
               the pressure of non-emergency traffic.  That is why Orange  
               County EMS and the local fire authority are participating  








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               in a statewide pilot study, exploring ways to contract with  
               selected urgent care centers to be able to receive  
               ambulance traffic.  





            The California State Council of the Service Employees  
            International Union (SEIU California) opposes this bill  
            stating,  in order to provide emergency services is California  
            emergency service providers must be located within a hospital  
            so as to have access to all necessary services including:   
            intensive care, laboratory service, radiological services,  
            surgical services, post-anesthesia recovery, and readily  
            available services of a blood bank.  SEIU California notes  
            this bill proposes to reduce this list down to two services,  
            laboratory and radiological, which causes grave concerns for  
            patient safety.  SEIU contends it is difficult to predict the  
            severity of the medical needs of patients presenting at an ED,  
            and should an individual require immediate surgery to save  
            their life, or need to be transferred into an intensive care  
            unit for observations, those services should be as close and  
            readily available to the patient as possible.



          5)RELATED LEGISLATION.  

             a)   AB 579 (Obernolte) creates an exception to permit a  
               general acute care hospital to operate an ED located more  
               than 15 miles from its main physical plant, if all  
               applicable requirements of licensure are satisfied. The  
               bill would also permit a closing general acute care  
               hospitals' ED to continue to be operated at the same  
               location or locations by an acquiring general acute care  
               hospital, as specified.  AB 579 creates an exception to  
               permit the acquiring general acute care hospital to operate  
               the closing general acute care hospitals' ED at that  








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               location or locations, even if located more than 15 miles  
               from the acquiring general acute care hospital's main  
               physical plant, if all applicable requirements of licensure  
               are satisfied.  AB 579 is currently pending in Assembly  
               Health Committee.

             b)   SB 787 (Bates) requires a general acute care hospital  
               that provides EMS and that is scheduled for closure to  
               conduct public hearings for public review and comment, as  
               specified.  SB 787 would also authorize SMMC, San Clemente,  
               to continue, under its existing license, to provide EMS to  
               patients in the region if it otherwise transforms its  
                                                                      delivery of services.  SB 787 is pending in the Senate  
               Health.



          6)PREVIOUS LEGISLATION.  

             a)   AB 717 (Gordon) of 2005 would have allowed the Centinela  
               Airport Clinic to receive private and government  
               reimbursement rates equivalent to that of a contiguous ED  
               of a general acute care hospital if it meets certain  
               specified requirements.  AB 717 failed passage in the  
               Senate Health Committee.

             b)   AB 1050 (Gordon) of 2005, would have created a  
               demonstration project that required the Department of  
               Health Services (now DPH) to issue a special permit to up  
               to four general acute care hospital applicants in Los  
               Angeles County to operate freestanding emergency receiving  
               centers.  AB 1050 was never heard in Committee.





          7)POLICY COMMENTS.  Under current law, when two hospitals  
            operate under a consolidated license, they share a governing  








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            body, but both facilities must meet all of the requirements of  
            licensure.  This bill appears to turn that premise on its  
            head, and instead only require the parent hospital to meet all  
            licensure requirements, while allowing the FED to operate with  
            reduced requirements.  For example, the bill spells out  
            certain services the FED would have to provide, such as  
            laboratory and diagnostic radiology services, including X-ray,  
            CT scan, and ultrasound capabilities, but remains silent on  
            whether or not the FED would be able to provide basic required  
            services such as surgical and dietary, or whether those  
            services would be provided at the parent hospital.  It is  
            unclear if a FED could safely operate without the ability to  
            provide those services on site. 

            Another issue of concern is the potential for patient  
            confusion over what differentiates an FED from ED.  While both  
            would be expected to address emergencies, FEDs appear to be  
            much more like urgent care centers, which are typically  
            designed to handle less serious illnesses and injuries, like a  
            sprained ankle, a cut, or the flu.  EDs are equipped to handle  
            life-and-death matters like traumatic injuries, heart attacks,  
            and strokes, as well as anything less severe.  For example, an  
            individual could experience shortness of breath, or a  
            toothache, and drive themselves to the FED thinking they were  
            having an asthma attack, or wanting pain medication for the  
            toothache, when in fact they were experiencing a heart attack  
            requiring immediate emergency surgery, which would not be  
            available at SMMC.  





            Finally, it is of concern that as currently drafted, this bill  
            would allow one hospital in the state to charge ED prices  
            without the meeting the requirements and responsibilities of  
            full ED licensure, while only providing what is essentially  
            urgent care service.









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          REGISTERED SUPPORT / OPPOSITION:




          Support


          
          City of Dana Point
          Saddleback Memorial Hospital
          San Clemente City Council
          Save Saddleback San Clemente Hospital
          Orange County Fire Authority
          Numerous individuals


          Opposition



          California Chapter of the American College of Emergency  
          Physicians
          California Labor Federation
          California Nurses Association
          SEIU California
          


          Analysis Prepared by:Lara Flynn / HEALTH / (916) 319-2097









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