BILL ANALYSIS                                                                                                                                                                                                    Ó



          SENATE COMMITTEE ON HEALTH
                          Senator Ed Hernandez, O.D., Chair

          BILL NO:                    SB 787    
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          |AUTHOR:        |Bates                                          |
          |---------------+-----------------------------------------------|
          |VERSION:       |April 20, 2015                                 |
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          |HEARING DATE:  |April 29, 2015 |               |               |
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          |CONSULTANT:    |Vince Marchand                                 |
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           SUBJECT  :  Hospitals:  closures

           SUMMARY  :  Permits Saddleback Memorial Medical Center to operate an  
          emergency department at its San Clemente campus, even if the San  
          Clemente campus stopped providing acute care services thereby  
          permitting a freestanding emergency department, subject to  
          specified conditions.
          
          Existing law:
          1.Licenses general acute care hospitals under the California  
            Department of Public Health (CDPH). Defines general acute care  
            hospitals as hospitals that provide 24-hour inpatient care,  
            including the following basic services: medical, nursing,  
            surgical, anesthesia, laboratory, radiology, pharmacy, and  
            dietary services.

          2.Permits general acute care hospitals, in addition to the basic  
            services all hospitals are required to offer, to be approved  
            by CDPH to offer special services, including, but not limited  
            to, a radiation therapy department, a burn center, an  
            emergency center, a hemodialysis center or unit, psychiatric  
            services, intensive care newborn nursery, cardiac surgery,  
            cardiac catheterization laboratory, and renal transplant.

          3.Requires CDPH 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. 

          4.Requires any hospital that provides emergency medical services  
            to provide notice no later than 90 days prior to a planned  







          SB 787 (Bates)                                      Page 2 of ?
          
          
            reduction or elimination of the level of emergency medical  
            services of the intended change to CDPH, the local emergency  
            medical services agency, and all health care service plans or  
            other entities under contract with the hospital to provide  
            services to enrollees. Additionally requires the hospital to  
            provide notice of the intended change in a manner that is  
            likely to reach a significant number of residents of the  
            community served by the facility.

          Existing regulations:
          1.Requires an emergency medical service to be so located in the  
            hospital as to have ready access to all necessary services.

          2.Requires a hospital that is approved to offer emergency  
            medical service to have the following service capabilities:

               a.     Intensive care service with adequate monitoring and  
                 therapeutic equipment;
               b.     Laboratory service with the capability of performing  
                 blood gas analysis and electrolyte determinations;
               c.     Radiological service to be capable of providing the  
                 necessary support for the emergency service;
               d.     Surgical services immediately available for  
                 life-threatening situations;
               e.     Post-anesthesia recovery service; and,
               f.     The services of a blood bank containing common types  
                 of blood and blood derivatives readily available, with  
                 blood storage facilities in or adjacent to the emergency  
                 service.
          
          This bill:
          1.Permits Saddleback Memorial Medical Center, notwithstanding  
            any other law, to operate an emergency department (ED) at its  
            San Clemente campus, subject to the conditions specified in  
            this bill.

          2.Requires the San Clemente ED to operate under the consolidated  
            license of Saddleback Memorial Medical Center and to meet all  
            of the requirements imposed under that license, including  
            being within 15 miles of its parent hospital.

          3.Requires the San Clemente ED to be a conversion from a  
            previously existing acute care campus and prohibits it from  
            being a newly developed freestanding ED.









          SB 787 (Bates)                                      Page 3 of ?
          
          
          4.Requires the San Clemente ED to be open 24 hours a day, 365  
            days a year.

          5.Requires the San Clemente ED to be staffed by at least one  
            board-certified emergency physician at all times.

          6.Requires the San Clemente ED to be staff with properly trained  
            emergency room nurses and meet the minimum staffing  
            requirements for EDs in this state.

          7.Requires the San Clemente ED to have a complete range of  
            laboratory and diagnostic radiology services, including a  
            complete array of laboratory test, basic X-ray, computerized  
            tomography (CT) scan, and ultrasound capabilities.

          8.Requires the San Clemente ED to meet the specialty call  
            requirements, as defined by the Orange County emergency  
            medical services agency, under its consolidated license.

          9.Requires the San Clemente ED to have 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.

          10.Requires the San Clemente ED to have the capabilities to  
            stabilize patients with emergency medical conditions and to  
            transport them to its parent hospital or other higher level of  
            care facilities in a safe and timely manner, consistent with  
            the standards of care in the local communities.

          11.Requires the San Clemente ED to have a fully functioning  
            transport program with a proven track record of safely  
            transporting 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.

          12.Requires all applicable federal and state regulatory  
            requirements to be met under the consolidated license of  
            Saddleback Memorial Medical Center, including all applicable  
            regulations of the Centers for Medicare and Medicaid Services  
            and Title 22 of the California Code of Regulations. 

          13.Prohibits anything in this bill from being construed to  
            require Saddleback Memorial Medical Center to provide for  
            concomitant acute care service at the San Clemente campus or  








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            to seek additional licensure for operation of the San Clemente  
            ED that is authorized pursuant to this bill.

          14.States legislative findings and declarations that a special  
            law is necessary and that a general law cannot be made  
            applicable within the meaning of a specified provision of the  
            California Constitution because of the unique circumstances  
            regarding the provision of emergency medical services to the  
            communities of San Clemente, Dana Point, and San Juan  
            Capistrano.

          15.Contains an urgency clause that will make this bill effective  
            upon enactment.

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

           COMMENTS :
          1.Author's statement.  According to the author, the operator of  
            San Clemente's Saddleback Memorial Medical Center ("San  
            Clemente Hospital") is considering plans to convert the  
            hospital into an ambulatory health care campus that would  
            provide outpatient surgery and urgent care services. This plan  
            would eliminate the hospital's 73-bed hospital and emergency  
            room. This bill authorizes San Clemente Hospital to continue  
            to provide emergency medical services to patients in the  
            region if it otherwise transforms its delivery of services.

          San Clemente Hospital has served South Orange County for more  
            than 40 years, and operates the only emergency facility  
            between Mission Viejo and Oceanside. While the converted San  
            Clemente Hospital would have an urgent care center, state law  
            does not allow 911 patients to be transported to urgent care  
            centers. Ambulances transporting 911 patients to the closest  
            facilities that could take patients in need of emergency  
            services from the area that is presently served by San  
            Clemente Hospital would face longer distances on roads and  
            highways that are frequently congested with traffic. The  
            longer ambulance rides could risk the lives of patients.  
            Additionally, the nearest emergency rooms are already strained  
            by the number of patients that come in, and could be forced to  
            turn away additional emergency patients.

          2.Background on San Clemente hospital. San Clemente Hospital is  
            part of Health System, which is a nonprofit health care  








          SB 787 (Bates)                                      Page 5 of ?
          
          
            delivery system with six hospitals, as well as a number of  
            surgical centers and outpatient clinics in Los Angeles and  
            Orange County. San Clemente Hospital is licensed for 73 beds,  
            and operates under a consolidated license with Saddleback  
            Memorial Medical Center - Laguna Hills, which has 252 licensed  
            beds. The Laguna Hills campus is located about 14 miles north  
            of San Clemente Hospital, with both hospitals adjacent to the  
            Interstate 5 highway. According to newspaper articles,  
            MemorialCare Health System announced in August of 2014 that  
            they were planning to replace San Clemente Hospital with a new  
            facility that would offer a wide range of outpatient services,  
            including an advanced urgent care. 

          According to the Office of Statewide Health Planning and  
            Development's Annual Utilization Report for San Clemente  
            Hospital, the hospital's ED was placed on diversion (meaning  
            the ED was closed to ambulances because it was full) for a  
            total of 112 hours in 2014. The following table is San  
            Clemente Hospital's emergency utilization data for 2014:
          
          
           -------------------------------------------------------------- 
          |  ED Visit Type  |     (1)      |     (2)      |     (3)      |
          |                 |              |              |              |
          |                 |  Visits not  |Admitted from |   Total ED   |
          |                 | Resulting in |     ED       |   Traffic    |
          |                 |  Admission   |              |  (1) + (2)   |
          |                 |              |              |              |
          |-----------------+--------------+--------------+--------------|
          |Minor            |          548 |            0 |              |
          |-----------------+--------------+--------------+--------------|
          |Low/Moderate     |        4,626 |            4 |              |
          |-----------------+--------------+--------------+--------------|
          |Moderate         |        5,403 |           29 |              |
          |-----------------+--------------+--------------+--------------|
          |Severe without   |        1,798 |        1,006 |              |
          |threat           |              |              |              |
          |-----------------+--------------+--------------+--------------|
          |Severe with      |          423 |          591 |              |
          |threat           |              |              |              |
          |-----------------+--------------+--------------+--------------|
          |TOTAL            |       12,798 |        1,630 |14,428        |
          |                 |              |              |              |
          |                 |              |              |              |
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            Other hospitals in the surrounding region include: 
               a.     Mission Hospital Laguna Beach, with 123 acute care  
                 beds with somewhat similar ED utilization rates and is  
                 located seven miles north of San Clemente Hospital on  
                 Highway 1;
               b.     Mission Hospital Regional Medical Center, with 345  
                 acute care beds, a Level II trauma center, and an ED that  
                 is about three times the size of San Clemente Hospital's  
                 ED which went on diversion status for 683 hours in 2014.  
                 Mission Hospital Regional Medical Center is located about  
                 nine miles north of San Clemente Hospital along I-5, in  
                 Mission Viejo; and,
               c.     Saddleback Memorial Medical Center - Laguna Hills,  
                 the parent hospital of San Clemente Hospital, with 252  
                 acute care beds and an ED that is roughly the size of  
                 Mission Hospital Regional Medical Center, which went on  
                 diversion for a total of 308 hours in 2014. This hospital  
                 is located about 14 miles north of San Clemente Hospital  
                 along I-5.

            Under existing law, a hospital that offers emergency medical  
            services is required to provide CDPH, among others, with at  
            least 90 days notice of any planned reduction or closure of  
            the emergency medical service. According to CDPH, San Clemente  
            Hospital has not provided this notice, but that the  
            MemorialCare Health System is currently working on a  
            feasibility study to determine the future of the hospital.

          1.Background on freestanding EDs.  There are currently no  
            freestanding EDs licensed in California, although they do  
            operate in other states. According to an article in Kaiser  
            Health News in July of 2013, the number of freestanding EDs  
            doubled to more than 400 between 2009 and 2013. According to a  
            2013 information paper published by the American College of  
            Emergency Physicians, there are two distinct types of  
            freestanding EDs: those that are operated by, or licensed  
            through, medical centers or hospital systems but are  
            geographically separate from the hospital, and those that are  
            independent of a hospital. As an example of the latter, First  
            Choice ER is a for-profit chain of freestanding, 24-hour  
            emergency rooms that operate in Texas and Colorado. CHCF  
            published an issue brief in July of 2009, entitled  
            "Freestanding Emergency Departments: Do They Have a Role in  
            California" (CHCF report).  According to the CHCF report, the  








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            growth of freestanding EDs has prompted discussions regarding  
            their regulation and effect on the health care system. The  
            CHCF report states that these facilities differ from urgent  
            care centers in that they can accommodate additional  
            procedures such as defibrillation, intubation, and conscious  
            sedation. Additionally, most freestanding EDs are staffed by  
            trained emergency physicians and nurses, and some have been  
            permitted to receive ambulance patients. In California, in  
            order to offer emergency medical services, a facility must  
            provide certain services, such as intensive care, radiology,  
            and surgical services that are immediately available for  
            life-threatening situations, which essentially require an ED  
            to be part of a full-fledged hospital.

          2.Pilot project at Centinela Airport Clinic. Using statutory  
            authority that authorizes a local EMSA to "approve or conduct  
            any scientific or trial study of the efficacy of the  
            pre-hospital emergency use of any drug, device, or treatment  
            procedure within the local EMS system," the Los Angeles County  
            EMSA approved a two-year pilot project beginning in 2004 to  
            allow the Centinela Airport Clinic at Los Angeles  
            International Airport to receive 911 transports of basic  
            life-support patients. This was apparently the first time that  
            an emergency medical services system in California was allowed  
            to transport patients from 911 dispatch to a facility that was  
            not part of a hospital. However, both CDPH and the statewide  
            California EMSA Medical disagreed that the local EMS agency  
            had the authority to permit the operation of such a facility.  
            Ultimately, this "freestanding ED" pilot project ended after  
            one year, partly as a result of low volume that resulted from  
            a restrictive county ambulance triage policy that limited the  
            severity of patients that could be transported to this  
            location.

          3.Related legislation. AB 911 (Brough), is nearly identical to  
            this bill. AB 911 is currently scheduled to be heard in  
            Assembly Health Committee on April 28, 2015.
          
            AB 579 (Obernolte), permits 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  








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            the acquiring general acute care hospital to operate the  
            closing general acute care hospitals' ED at that 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.
          
          4.Prior legislation. 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 emergency department of a general acute care  
            hospital if certain specified requirements were met.  AB 717  
            failed passage in the Senate Health Committee.

          AB 1050 (Gordon), of 2005, would have created a demonstration  
            project that required the Department of Health Services 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.

          5.Support.  This bill is supported by a group of several  
            physicians who have formed "Save Saddleback San Clemente  
            Hospital" (SSSCH). According to SSSCH, MemorialCare Health  
            System has been planning to close their community's 73-bed  
            hospital and ED. The hospital is likely to close this year  
            regardless of this legislation, and SSSCH states that the fate  
            of the ED hangs on this bill.  According to SSSCH, San  
            Clemente Hospital's ED serves 15,000 people yearly and is the  
            second busiest ER in the region. SSSCH states that their  
            community is effectively a peninsula, with Camp Pendleton  
            south, protected forest to the east, the ocean to the west,  
            and only one road north, I-5, to access emergency services.  
            According to SSSCH, an I-5 widening project has just started  
            closing shoulders and ramps intermittently, and that this  
            project will last three years. SSSCH states that in 2013 and  
            2014, the average transport times from a typical San Clemente  
            residence was 17 minutes to the next closest hospital, Mission  
            Hospital Regional Medical Center in Mission Viejo, and now  
            that construction has begun, transport times to this facility  
            can exceed 30 minutes. According to SSSCH, Mission Hospital,  
            which will get their 15,000 patients, leads all 26 hospitals  
            in Orange County in wall time (when emergency personnel must  
            wait in the ED with their patients while waiting for a bed to  
            open up) and diversion time (when the ED is closed to  








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            paramedic traffic because the ED is full). SSSCH states that  
            with San Clemente Hospital closing, their community will be  
            left with 75 ED beds to cover more than 400,000 people. SSSCH  
            states that this bill is critical to keep access to emergency  
            care in their community.

          6.Opposition.  The California Chapter of the American College of  
            Emergency Physicians (CalACEP) states in opposition that  
            freestanding EDs are facilities that provide urgent care, but  
            are not attached to acute care hospitals. While the words  
            "emergency department" are in the title of these facilities,  
            CalACEP states that they operate like urgent care clinics, not  
            EDs. According to CalACEP, 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 condition.  
            Allowing urgent care facilities to contain the word  
            "emergency" in the title poses patient safety risks to  
            patients who arrive at the door assuming they can receive  
            full-scope ED care. CalACEP points to the example foa patient  
            presenting at a freestanding ED with chest pains, only to find  
            out they are having a heart attack and require transfer to a  
            hospital. The critical, wasted time in transport is time  
            during which the patient should be receiving life-saving care.

          The California Nurses Association (CNA) also opposes this bill,  
            and points to arguments by the owner of the hospital that  
            local 911 calls for patients who may have a heart attack,  
            stroke, or trauma currently bypass San Clemente hospital to go  
            to cardiac receiving centers, stroke receiving centers, and  
            trauma centers. According to CNA, in other words, San Clemente  
            hospital's ED is being bypassed by Orange County emergency  
            medical services because its ED is insufficiently supported by  
            certain necessary and specialized urgent support services, and  
            that this bill would exacerbate such insufficiency by  
            diminishing even further those support services while  
            simultaneously holding itself out to the public as an ED. The  
            California State Council of the Service Employees  
            International Union (SEIU California) states in opposition  
            that under existing law, in order to provide emergency  
            services in California, emergency services must be located  
            within a hospital so as to have access to all necessary  
            services. SEIU California states that the reason for these  
            requirements is that it is difficult to predict the severity  
            of the medical needs of patients presenting at an ED. Should  








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            an individual require immediate surgery to save his or her  
            life, for example, SEIU California states that those services  
                                       should be as close and readily available to the patient as  
            possible.
          
           SUPPORT AND OPPOSITION  :
          Support:  Three individuals
          
          Oppose:   California Chapter of the American College of  
                    Emergency Physicians
                    California Nurses Association
                    California State Council of Service Employees  
                    International Union

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