BILL ANALYSIS
SENATE HEALTH
COMMITTEE ANALYSIS
Senator Elaine K. Alquist, Chair
BILL NO: SB 196
S
AUTHOR: Corbett
B
AMENDED: July 9, 2009
HEARING DATE: September 8, 2009
1
CONSULTANT:
9
Hansel/sh
6
PURSUANT TO SENATE RULE 29.10
SUBJECT
Emergency medical services
SUMMARY
Increases from 90 to 120 days the public notice a general
acute care hospital must provide prior to closing or
downgrading an emergency department (ED) and includes
employees among the entities who must be notified.
Increases from 30 to 60 days the public notice a general
acute care hospital or acute psychiatric hospital must give
prior to closing a facility or eliminating or relocating a
supplemental service.
CHANGES TO EXISTING LAW
Existing law:
Provides for the licensing and regulation of health
facilities, including general acute care hospitals, acute
psychiatric hospitals, and special hospitals, as well as
for clinics, including community clinics and primary care
clinics, by DPH.
Requires general acute care hospitals providing emergency
Continued---
STAFF ANALYSIS OF SENATE BILL SB 196 (Corbett)Page 2
medical services to provide at least 90 days notice of any
planned reduction in, or elimination of, emergency medical
services, to DPH, the local government entity in charge of
providing health services, and all health care service
plans or other entities that contract with the hospital to
provide services to their enrollees or members. Hospitals
taking such actions must also provide public notice of the
intended change within 90 days prior to taking the action,
in a manner that is likely to reach a significant number of
residents of the community serviced by that facility.
Requires a county, within 60 days of receiving notification
of a pending downgrade or closure of an emergency
department, and prior to DPH's approval of the proposed
downgrade or closure, to complete an evaluation of the
impact on community access to emergency care, as specified,
which includes at least one public hearing. Allows a
county to designate the local emergency medical services
agency as responsible to conduct the impact evaluation.
Requires a general acute care hospital or acute psychiatric
hospital, not less than 30 days prior to closing a facility
or eliminating a supplemental service, or relocating a
supplemental service to a different campus, to provide
public notice of the proposed action, including through
notice posted at the entrance to all affected facilities,
and a notice to DPH and the board of supervisors of the
county in which the hospital is located.
Requires a county board of supervisors to provide public
notice and conduct public hearings prior to making a
decision to close, eliminate or reduce the level of medical
services provided by a county facility, or to lease, sell
or transfer the management of a county facility. Requires
the notice to include the amount and type of each change,
the expected savings, and the number of persons affected.
This bill:
Increases from 90 to 120 days the public notice a general
acute care hospital must provide prior to closing or
downgrading an emergency department (ED) and adds employees
to the list of entities that must be provided with this
notice.
Requires the hospital to hold a minimum of three public
meetings related to the proposed changes. Requires the
STAFF ANALYSIS OF SENATE BILL SB 196 (Corbett)Page 3
facility to inform the public of the status at the second
public meeting.
Increases from 30 to 60 days the public notice a general
acute care or acute psychiatric hospital must give prior to
closing a facility or eliminating or relocating a
supplemental service.
FISCAL IMPACT
According to the Assembly Appropriations Committee,
absorbable costs to DPH and unknown, but likely absorbable,
costs to hospitals.
BACKGROUND AND DISCUSSION
According to the author, SB 196 would increase the
timeframes and notification requirements that apply when a
hospital closes or downgrades an emergency department, or
eliminates or relocates a vital service. The author argues
that the current requirements leave local communities
without effective remedies when closures or significant
changes in services are announced.
The author states that sales, mergers, and closures of
hospitals in California are increasing, and cites Tenet's
sale of 19 hospitals in 2004, which exacerbated the crisis
facing Los Angeles County's emergency medical services
system, as well as a 2002 study which documented a decline
in the number of hospitals in Contra Costa County from
twelve to eight. The author further states that while
there are many reasons why hospitals close, one is
anti-competitive business practices by some hospital
chains, which acquire hospitals and then close them down to
reduce competition.
The bill also addresses a specific issue with San Leandro
Hospital in Alameda County. San Leandro Hospital is an
acute care hospital that currently provides medical,
surgical, and rehabilitative services, including an
emergency room that receives approximately 25,000 visits
per year. In 2007, the Eden Township Healthcare District,
which owns the hospital, amended its lease with Sutter
Health to include a purchase option. The amended lease
and operating agreement with Sutter state that Sutter may
STAFF ANALYSIS OF SENATE BILL SB 196 (Corbett)Page 4
assign its interests in the purchase option without the
landlord's consent. Sutter Health has recently indicated
that it will continue to operate the hospital until
September 30 of this year and is considering a number of
options for assigning its interest in the facility, some of
which may entail closure or reduction in services provided
by the hospital.
Hospital closures and service reductions
Since 1996, 90 hospitals have closed across California,
with more than 25 closing in the past five years.
Approximately 400 acute care hospitals remain operational
under current law. According to a 2005 study by the Petris
Center at UC Berkeley, during the period 1995 through 2002,
one-fourth of the hospitals studied closed one or more
inpatient services, with a closure defined as a 95 percent
or greater decrease in patient discharges for that service.
Ten hospitals closed four or more services. Conversely,
the study found that 123 facilities opened one or more
services during the study period, with the most common
being in the area of inpatient rehabilitation.
Basic and supplemental services
Existing law requires hospitals to provide a number of
basic services, including medical, surgical, anesthesia,
laboratory, and radiology services. Hospitals are also
permitted to offer a variety of supplemental services,
including basic emergency medical, burn center,
psychiatric, intensive care newborn nursery, cardiovascular
surgery, chronic dialysis, and radiation therapy services.
Related Bills
AB 1235 (Hayashi) extends, for a hospital building that is
owned or operated by the County of Alameda on the Alameda
County Medical Centers Fairmont Campus, the
deadline for submitting a facility master plan until July
1, 2010. This bill states the findings and declarations of
the Legislature regarding the need for special legislation.
Prior legislation
AB 2400 (Price), Chapter 459, Statutes of 2008, requires,
not less than 30 days prior to closing a general acute care
or acute psychiatric hospital, eliminating a supplemental
service, as defined in existing regulations, or relocating
the provision of a supplemental service to a different
STAFF ANALYSIS OF SENATE BILL SB 196 (Corbett)Page 5
campus, hospitals to provide notice to the public and the
applicable administering state department.
AB 2103 (Gallegos), Chapter 995, Statutes of 1998, requires
an acute care hospital to notify the Department of Health
Services 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
governments entities. Requires an implementation plan that
provides for transfer of emergency patients to other
treatment settings. Before approving a reduction in
service, the DHS must review the impact on the community
and other service providers. Requires HMOs to notify
enrollees of changes in emergency services in the plan's
service area.
SB 499 (Alarcon) of 2005-2006 would have required a
hospital, prior to issuing notice to the Department of
Health Services (DHS) 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. This bill was vetoed by the Governor.
SB 315 (Margett) of 2005-2006 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. Failed passage in Senate
Appropriations Committee.
AB 910 (Diaz) of 2003-2004 would have required the board of
supervisors in a county to conduct a thorough review of the
impact of any downgrading or closure of a hospital or
emergency service. Also would have prohibited any person
from obtaining an ownership interest in more than one
hospital within the same county, or in any geographic area
within a 25-mile radius, regardless of county boundaries,
unless that person first obtains the approval of the
Attorney General. Held under submission in Assembly
Appropriations Committee.
AB 2874 (Diaz) of 2003-2004 would have required an entity
STAFF ANALYSIS OF SENATE BILL SB 196 (Corbett)Page 6
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. This bill was vetoed by
the Governor.
Arguments in support
According to the California Nurses Association, SB 196 is a
local control measure that will allow more time for
communities and local governments to research other options
before a hospital is closed or services are reduced. CNA
argues that the current timeframe is too short to engage
the public. CNA argues that many closures are due to
anti-competitive business practices by some hospital
chains, and it is justifiable to allow local communities
more time to respond to announced closures and service
reductions.
The California Medical Association states that SB 196 will
ensure that all stakeholders who are affected by a
downgrade or closure of a hospital facility or emergency
department are made aware of the proposal and have an
opportunity to provide input and plan for how to respond.
Arguments in opposition
The California Hospital Association states that hospitals
often have to make a difficult decision to close emergency
departments, often due to poor reimbursement from public
and private payers. It is frequently a choice of closing
the emergency department or closing the entire hospital.
When a closure is announced, hospital staff begin to look
for employment, making it impossible for the hospital to
keep its doors open, even during the currently required 90
days. CHA also argues that adding additional delays and
additional meetings will add more costs that a troubled
hospital must bear.
COMMENTS
1. Provisions of bill have changed. When it was heard in
Senate Health Committee on April 1, 2009, SB 196 would
have prohibited contracts between health care providers
and health care service plans or health insurers from
containing a provision that restricts the ability of the
health plan or health insurer to furnish information on
STAFF ANALYSIS OF SENATE BILL SB 196 (Corbett)Page 7
the cost of procedures or health care quality
information to its enrollees or insureds. These
provisions were deleted in the Assembly and the current
provisions dealing with hospital and emergency department
closures and service reductions were inserted.
PRIOR ACTIONS
Assembly Floor: 49-27
Assembly Appropriations: 12-5
Assembly Health: 14-5
POSITIONS
Support: California Medical Association
California Nurses Association
Oppose: California Hospital Association
United Hospital Association
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