Reporting by Don Jergler
Updated 6:30am | Paul Eakins in the Press-Telegram reports: Five-year Community Hospital Board Member Virgie Barnes confirms: No layoffs will take place at Community Hospital, which will keep its own doctors, staff, name and location. She said that after the board’s experiences with the hospital’s past operators, members were “kind of leery” of letting Memorial step in. But we were having a little difficulty and we were having to come up with a CEO to hire and this takes care of that for us,” Barnes said.
Click here to read the Press-Telegram coverage.
Harry Saltzgaver in the Gazettes reports: Community Hospital still averages less than 75 overnight patients a day — it is licensed for more than 200 beds — and does not provide obstetric and other services. However, it does have a behavioral health wing and a comprehensive cancer care center. In contrast, Memorial Medical Center is the largest full-service hospital in the area, overseeing many births each day and providing the largest neo-natal intensive care center in the area. Its affiliate at the Atlantic Avenue campus, Miller Children’s Hospital, just opened a new pavilion with a state-of-the-art pediatric surgery center, more neo-natal care units and other services.
Click here to read the Gazettes coverage.
06/09/10 6:00pm | Long Beach Memorial Medical Center is in talks to take over the operations of Community Hospital of Long Beach. Both hospitals announced publicly that they have entered into discussions to make Long Beach Memorial the owner/operator of Community Hospital. Since both are not for profits, no cash or stock changes hands.
Both the Memorial and Community Hospital boards of directors have approved moving forward with discussions. The final deal and specific agreements will be discussed and decided at a later date.
In the meantime, the two hospitals will enter into a management services agreement in which Memorial will provide leadership and management over the operations of Community, leaders at both hospitals said.
Leadership at the hospitals say the deal talks arose in anticipation of rising healthcare costs and future demand for greater operating efficiencies, as well as the need for hospitals to continue to acquire the latest technology.
“This is exactly the ideal time for collaboration,” said Nancy Myers, Community’s board chair. “There’s so much coming in the future in terms of costs from the standpoint of technology, new devices, pharmaceuticals—and opening new facilities and offering new services are really critical and important. It is so hard for an independent hospital to maintain more than a razor-thin margin.”
Impact to Community Hospital
The merger should not negatively affect patients at either hospital, according to Diana Hendel, CEO of Long Beach Memorial and Miller Children’s Hospital Long Beach. “We don’t anticipate anyone who is currently going to Community Hospital who will not be able to continue going,” she said.
Community has been in search of a new chief executive for sometime, so it was decided the hospital should look at a variety of possible changes, Myers said.
“We were already starting to look at new strategies,” she said. “We had spoken to Memorial a couple of years ago when we were talking about partnering together with (Miller Children’s Hospital of Long Beach), so we got to know the people at Memorial quite well a couple of years ago.” Myers said merger talks began in September 2009.
The latest financial statement publicly available on Community shows the hospital’s expenses for its 2008 fiscal year were $60 million, which was marginally offset by patient payments and donations.
Importance of Merging
Long Beach Memorial and Miller Children’s are part of the Orange County-based MemorialCare Health System, a not-for-profit system that includes Orange Coast Memorial Medical Center and Saddleback Memorial Medical Center in Laguna Hills and San Clemente. Long Beach Memorial’s reported revenues on its latest available tax return in 2008 were over $843 million.
“In the near future we’ll see more small, stand-alone hospitals merging,” Myers said. “There’s no way small hospitals will survive with what is going to be hitting us around 2014.”
Hendel said rising healthcare costs are increasingly demanding such strategic alignments by hospitals. “With major reimbursements coming in Medicare, collaborations are going to become really important so that efficiencies are created,” she said.
Both Hendel and Myers say the plan is to keep the smaller Community Hospital—Eastside Long Beach’s only hospital—open for business. Community closed for nine months nearly 10 years ago and reopened after a massive showing of support from the surrounding community.
“The citizens living on the Eastside of Long Beach need that hospital over there,” Hendel said. “It’s a few minutes from the Naples and Belmont Shore area, and it’s much faster than having to go to Memorial.”
Hendel said she doesn’t foresee staff at either hospital being cut due to the merger. “In my experience of similar arrangements, with two locations and the services at Community Hospital, I don’t, as the CEO here at Long Beach Memorial, expect that,” Hendel said. “I look at this as a collaboration in growth opportunities; that we’re going to be better together.”
In fact, one driving force behind the planned merger is “continuing to ensure access on the eastside of Long Beach,” Hendel added. “This strengthens our ability to do that. We plan to look at synergies and look at where we can ideally locate services, as well as share technology and health records.”
Complementing Each Other
Myers noted the hospitals complement each other. After Community reopened in 2001, they did not reopen obstetrics and pediatrics services because Miller Children’s, operated by Memorial, has those services. Community has a behavioral health unit, but Memorial doesn’t.
Despite Community’s thin operating margin, Myers noted that Community would still be financially viable without a merger. “We just happen to be without a CEO at this time, so it just became an opportune time to see what else we can do with our hospital and look at the situations.”
Hendel said she believes the merger will be completed in short order. “We’re hopeful that it can go relatively quickly,” she said. “Probably a year or less.”
Future of the Community Hospital Brand
Does this spell Long Beach Memorial Medical Center Community Hospital of Long Beach? That would be LBMMCCHLB thanks to the ever-growing affection that companies seem to hold for acronyms—Memorial’s communications materials are littered with LBMMC and the folks at Community often use CHLB. Thankfully, no. Hendel said not expect a new name or brand for either hospital. “We’re going to maintain our separate identities,” she said.
During the management services agreement, Community will operate as a separately licensed entity, according to a joint statement issued by the hospitals. Community’s “governing board, physicians and staff will continue to focus on medical care and furthering CHLB’s mission to promote excellence and integrity,” according to the statement. The hospitals will also enter into “a comprehensive strategic planning process during the preliminary phase, with board members, hospital representatives and city officials,” it states.
Since its opening in 1924, Community has offered a wide range of clinical services including adult medicine, behavioral health, 24/7 emergency care, surgery, occupational medicine and a comprehensive cancer care center.
Long Beach Memorial has been providing care for more than 100 years. Miller Children’s Hospital Long Beach provides pediatric care for children and young adults, with conditions ranging from common to complex, as well as maternity care for expectant mothers. Miller Children’s is one of only eight freestanding children’s hospitals in California.
Disclosure: lbpost.com publisher Shaun Lumachi is a member of the Community Hospital of Long Beach board of directors.