BILL ANALYSIS
SB 196
Page 1
Date of Hearing: July 7, 2009
ASSEMBLY COMMITTEE ON HEALTH
Dave Jones, Chair
SB 196 (Corbett) - As Amended: June 18, 2009
SENATE VOTE : Vote not relevant
SUBJECT : Emergency medical services.
SUMMARY : Increases from 90 to 180 days the public notice an
acute care hospital must provide prior to closing or downgrading
the emergency center; adds employees to the list of entities
that must be provided with this notice and requires the hospital
to hold a minimum of three public meetings related to the
proposed changes, in addition to other reasonable efforts the
hospital must make to inform the community under existing law.
EXISTING LAW :
1)Establishes the Department of Public Health (DPH) as the state
entity responsible for licensing and regulating health
facilities, including acute care hospitals.
2)Requires that any hospital that provides emergency medical
services, as soon as possible, but not later than 90 days
prior to a planned reduction or elimination of the level of
emergency medical services, provide notice of the intended
change to DPH, the local government entity in charge of the
provision of health services, and all health care service
plans or other entities under contract with the hospital to
provide services to enrollees of the plan or other entity.
3)Requires that in addition to the notice required by 2) above,
affected hospitals, within the 90 days, provide public notice
of the intended change in a manner that is likely to reach a
significant number of residents of the community serviced by
that facility.
4)Requires the county in which the closure or downgrade will
occur to prepare an impact evaluation that DPH must receive
before approving the change. The impact evaluation must
include the impact on community access to emergency care. The
process must include at least one public hearing, meet
specified timelines and may be delegated to the local
SB 196
Page 2
emergency services agency.
5)Requires any general acute care hospital not later than 30
days prior to a planned closure of the facility or elimination
of a supplemental service to provide public notice with
specified information, including a description of the planned
action and of the three nearest available comparable services
in the community. Requires the hospital to post the notice at
the entrance to the facility and provide it to DPH and the
county board of supervisors.
6)Under the Beilenson Act, requires that, prior to a county
health facility closing, eliminating, or reducing the level of
medical services provided, or the leasing, selling, or
transfer of management, the county board of supervisors
provide public notice, including notice posted at the entrance
to all county health care facilities, of public hearings to be
held by the board of supervisors prior to its decision to
proceed. The notice is required to contain the following: a)
a list of the proposed reductions or changes, by facility and
service; b) the amount and type of each proposed change; c)
the expected savings; and, d) the number of persons affected.
7)Allows counties to establish Local Health Care Districts
(hospital district) to operate health care facilities,
including acute care hospitals. Hospital districts are
required to secure voter approval in the district before
transferring or leasing more than 50% of the assets to a
private corporation.
8)Requires hospitals to meet seismic safety standards by 2008
and allows extensions under certain circumstances to 2013 and
2020.
FISCAL EFFECT : The current provisions of this bill have not
been analyzed by a fiscal committee.
COMMENTS :
1)PURPOSE OF THIS BILL . According to the author, when a
hospital closes or eliminates a health service, it has a
dramatic effect on the availability, quality, and
accessibility of care. This bill adds 90 days notice of the
closure of the emergency department (ED), for a total of 180
days, and requires the hospital to hold three public meetings.
SB 196
Page 3
This additional notice, the author states, will allow the
public to find solutions to keep their emergency rooms open,
find a new provider, or increase revenue to keep the local
hospital open.
2)BACKGROUND . Hospital closures in a number of communities
around the state have generated local opposition and spurred
state legislation to ensure that critical services, such as
EDs, do not close. State law does not give the state or any
local jurisdiction the power to block a hospital closure.
Acute care hospitals are required to provide 30 days notice to
the public. A private hospital that is planning to reduce or
eliminate emergency services must provide public notice 90
days prior to the change. Within 60 days of the hospital
announcing its intention, the county in which the hospital is
located must conduct an impact evaluation and hold a public
hearing to evaluate the effect of the downgrade or closure
upon community access to emergency care. DPH must receive a
copy of the impact evaluation report before approving a
downgrade or closure of emergency services. In the case of a
county proposing to close a county hospital, the state's
Beilenson Act requires the county board of supervisors to
provide public notice of the proposed closure and hold public
hearings before the closure. Hospital districts are required
to hold public meetings and provide public notice under the
Brown act, the Public Records Act, and under certain
circumstances are required to obtain voter approval.
This bill is prompted by a potential closure in Alameda County.
In 1997, Eden Township Health Care District (Eden Township)
transferred Eden Medical Center to Sutter Medical Center
Castro Valley (Sutter). Sutter also contracted with the
district to operate nearby San Leandro Hospital. Sutter is in
the process of obtaining necessary approvals and permits for
Eden Township in order to meet seismic safety requirements by
2013. Sutter is planning to close San Leandro which does meet
seismic standards. The local press reports that there are
discussions with Alameda County Medical Center to turn the
facility over to the county for the purpose of converting it
into a rehabilitation facility with a small urgent care area.
San Leandro is currently a general acute care hospital. It
has 120 beds and the average census has been at 50% or less
since at least 2004. This bill solely addresses the closure
of the ED.
3)HOSPITAL CLOSURES . The author cites the University of
SB 196
Page 4
California's Petris Center report "California's Closed
Hospitals," January 2001, which looked at closures from 1995
to 2000. In that five year period, 23 California general
acute care hospitals closed, 11 in the Los Angeles area.
Hospital closures have ebbed and flowed and there have been a
variety of legislative responses. The closures are a result
of the economic impact of inadequate Medi-Cal and Medicare
reimbursement rates, the economic downturn, cost of borrowing,
cost of seismic retrofit, shorter hospital stays, and changing
demographics in a particular area. The Assembly Health
Committee held hearings in 1997 regarding access to emergency
care after the announcement of trauma room closures in Los
Angeles. The Committee also held a hearing in February of
2004 on hospital closures as a result of an announcement by
Tenet Healthcare that it planned to sell 19 of the 39
hospitals it owned or operated in California. According to
data supplied by the California Hospital Association, most
hospital closures also include a loss of Emergency Services
4)OPPOSITION . The California Hospital Association opposes this
bill and states that hospitals close because of inadequate
revenue. It is frequently a choice between closing the ED or
the entire hospital. CHA contends that when a closure is
announced, staff begin to look for other opportunities and
that adding 90 days and more pubic meetings will "pile on"
costs to a troubled hospital. With regard to the author's
assertion that this provides additional time to find
solutions, the opponents respond that it is virtually
impossible in these economic times.
5)PREVIOUS LEGISLATION .
a) AB 2400 (Price), Chapter 459, Statutes of 2008, requires
every general acute care hospital to provide public notice
30 days prior to closing or eliminating a supplemental
service including a description of the proposed action.
b) AB 1384 (Price) of 2008 would have required every
general acute care hospital and every acute psychiatric
hospital to provide public notice, as specified, at least
60 days prior to the closure, reduction, or elimination of
services due to lease, sale, or transfer. It also would
have required a posted notice as specified and a report to
the public and DPH regarding the impact. AB 1384 was not
heard in Assembly Health Committee at the request of the
SB 196
Page 5
author.
c) SB 1351 (Corbett) of 2008 would have required a health
care district to secure voter approval before transferring
or leasing any health care facility to a private
corporation and would have authorized the California
Attorney General to review any transfer of district assets
to a private corporation. SB 1351 was vetoed by Governor
Schwarzenegger. In his veto message the Governor said in
part that "district hospitals are governed by a
locally-elected health care district board - who are
responsible to the voters of their community. All
districts are governed by the Brown Act (governs open
legislative meetings), the Public Records Act, the
Political Reform Act, public contracting laws and other
statutory restrictions. I cannot support placing
additional restrictions on a local hospital district,
especially when they are elected by, and accountable to,
their local community."
d) SB 499 (Alarcon) of 2005 would have required a hospital,
prior to issuing notice to the Department of Health
Services (now DPH) of a planned elimination of emergency
medical services or closure of the hospital, to prepare a
public health and safety report, to submit that report to
the county supervisors and the local emergency medical
services agency, and to make the report available to the
public. SB 499 was vetoed by Governor Schwarzenegger, his
veto message read:
While I share the authors concern about the
significant impact a hospital closure has on a local
community, the report required by this bill will not
stop a hospital from closing. SB 499 would force
distressed facilities to divert scarce resources
away from the critical functions of providing care
and keeping the hospital doors open and instead use
those resources to draft a report that would be of
limited value to the community. While such a report
may provide more information to the county and the
local emergency medical service agency, it will not
change the underlying problem that is leading to the
decision to eliminate or terminate service and it
lacks any enforcement mechanisms. Current law
already requires hospitals that are reducing or
SB 196
Page 6
eliminating their provision of emergency services to
provide at least 90 days notice to the State,
county, and the general public. Moreover, current
law also requires counties to provide the State
Department of Health Services an impact report any
time a hospital decides to reduce or eliminate
emergency services, thereby making this bill
somewhat duplicative.
This legislation does not fix the problem it is
trying to address and would not prevent a hospital
from closing.
e) SB 315 (Margett) of 2005 would have required a hospital
that plans to reduce or eliminate emergency medical
services to notify various entities and all local emergency
medical services agencies within the region served by the
hospital at least 90 days before a planned closure of the
hospital, subject to specified civil penalties for failure
to do so. SB 315 failed passage in the Senate
Appropriations Committee.
f) AB 2874 (Diaz) of 2004 would have required an entity
planning to close a general acute care hospital to give the
county an opportunity to establish a local health care
district or increase the tax of an existing district in
order to purchase the hospital if there are not plans to
sell the hospital to another entity. AB 2874 was vetoed by
the Governor Schwarzenegger, his veto message follows:
I am concerned about hospitals and emergency rooms
closing, but the Department of Health Services
cannot mandate hospitals, who are likely struggling
financially, to stay open for up to nine months to
allow the local governments to form local health
care districts. Furthermore, requiring insolvent
private hospitals to remain open, without county
financial assistance during that time, could result
in lower patient care standards due to rapid
attrition of medical staff, hospital staff and
suppliers during that time.
Mandating the sales price of a failing private
facility to reflect the price of its use as a
general acute care hospital is onerous regulation of
SB 196
Page 7
the private marketplace. Instead, proper
communication between a failing hospital and the
community should provide the local government with
first right of refusal of the facility at
appropriate market rates.
This bill addresses the symptom of hospital closures
and not the illness: the cost of providing care in
California. Instead, the Legislature should focus
on measures that foster success and solvency such as
improving the regulatory environment, reducing the
number of unfunded mandates that divert resources
away from care and making health insurance premiums
more affordable for our uninsured patients.
I encourage hospitals and counties to coordinate
with one another with respect to hospital closures,
but for the reasons stated above I am unable to sign
this legislation.
g) SB 1540 (Margett) of 2004 would have included local
emergency medical service agencies among those entities to
be notified when a hospital closes or downgrades its ED,
and would have placed a moratorium on a hospital licensee
when the Department of Health Services (now DPH) finds that
the licensee has not complied with hospital notification
requirements. SB 1540 was vetoed by the Governor.
h) AB 910 (Diaz) of 2003 would have established the
Hospital Protection review process for downgrades or
closures of private hospitals and would have prohibited any
person from owning more than one private hospital within a
county or a specified area without entering into a
Community Responsibility Contract with the Attorney
General. AB 910 was held on the Assembly Appropriations
Committee Suspense File.
i) AB 2103 (Gallegos), Chapter 995, Statutes of 1998,
requires any acute care hospital to notify DPH at least 90
days before the planned elimination or reduction of
emergency services. The hospitals must also provide notice
to the public and other local government entities. AB 2103
requires an implementation plan that provides for transfer
of emergency patients to other treatment settings. Before
approving a reduction in service, DPH must review the
impact on the community and other service providers. Each
SB 196
Page 8
county or emergency medical services authority must
delineate the criteria that will be used to evaluate the
impact of the closure of emergency services. AB 2103 also
requires HMOs to notify enrollees of changes in emergency
services in the plan's service area.
j) AB 505 (Villaraigosa) of 1995, would have required that,
prior to closing a health facility, reducing or eliminating
the level of health services provided, or leasing, selling,
or transferring the management of, a health facility
provide certain notice regarding those proposed changes to
the public and the applicable administering department not
less than 30 days prior to the proposed date of
implementation of the changes. AB 505 was not heard in the
Assembly Health Committee at the request of the author.
6)RECOMMENDED AMENDMENTS . This bill will likely have no impact
on the closure that prompted it. The author's intent is that
the additional 90 days will provide more opportunity in future
situations for communities to find ways to keep an emergency
department or hospital open or for patients to find a new
provider. Nonetheless, it could also result in 6 months of
uncertainty. In addition, there is no coordination in
existing law between the 30-day notice required for non-county
operated hospital closures and the 90-day notice for ED
closure. To better coordinate the various timeframes, the
author may want to amend this bill to require four months (120
days) for notice of the ED closure, increase notice of the
hospital closure from 30 to 60 days and require a status
report at the second public hearing. The amendments should
also require the second public meeting to be coordinated with
the 60 day notice, if applicable.
REGISTERED SUPPORT / OPPOSITION :
Support
California Medical Association
California Nurses Association/National Nurses Organizing
Committee
Opposition
California Hospital Association
United Hospital Association
SB 196
Page 9
Analysis Prepared by : Marjorie Swartz / HEALTH / (916)
319-2097