Mental health is a complicated and costly issue for California. The bulk of mental health services in North County have been provided at public hospitals because most private hospitals, like Scripps Encinitas, know that Behavioral Health Units (BHUs) and Crisis Stabilization Units (CSUs) typically lose millions of dollars per year. As a result, many Encinitas patients with acute mental health needs are transported to Tri-City Hospital in Oceanside. However, during the past year, both hospitals in North County with mental health facilities, Tri-City and Palomar, announced their intention to close their units because of dire budgetary concerns. Tri-City closed its units late last year and Palomar announced its intent to close theirs in 2020.
Recently, Tri-City CEO Steve Deitlin received a threatening letter signed by two local politicians, State Assembly Member Tasha Boerner Horvath (representing Encinitas, Carlsbad, Oceanside, & Vista) and County Supervisor Nathan Fletcher (Representing District 4 – La Jolla, Balboa Park, and Kearney Mesa) that demanded the hospital submit a plan to re-open the units or they would begin a costly and lengthy State audit.
The letter surprised the Hospital Board members who responded with a letter from the Board that said in part, “we have been working diligently with County Supervisors Jim Desmond and Kristin Gaspar in an effort to assist the County to meet its behavioral health obligations”.
Financially, it has become much harder for hospitals to make it since over 33% of Californians are on Medi-Cal, a number expected to rise with the State’s new plan to expand coverage to all eligible 19-25 year-olds, regardless of immigration status. Medi-Cal is the State’s low-cost or free health coverage for Californians with limited income, and it reimburses medical facilities at a much lower rate than commercial insurance companies.
A few years ago Tri-City was close to defaulting on its debt but averted the issue because of the actions of new hospital leadership. But, the hospital still wasn’t in compliance with earthquake retrofit statutes because its citizens did not pass a bond which could have helped cover the cost. By 2030, if not retrofitted or rebuilt at a cost of hundreds of millions, Tri-City must close. More recently, new regulations have added to hospital costs of operating BHUs and CSUs, mandating millions of dollars be spent on ceiling upgrades that would prevent suicides by hanging.
In late 2018, Tri-City made the tough decision to close down their BHU and CSU following a Joint Commission on Accreditation of Healthcare Organizations audit, which confirmed that if the drop ceilings were not fixed, at a cost of $8 million, Tri-City would be in jeopardy of having their entire hospital shut down.
But the math becomes even harder for Tri-City because they have to complete earthquake retrofit upgrades within ten years, or risk being completely shut down. The projected cost of these renovations is $150-300 million dollars, which the hospital does not have. To their credit, CEO Deitlin and his board convinced the federal office of Housing and Urban Development (HUD) to commit to a low-interest loan. However, in order to qualify for the loan, Tri-City had to show HUD a budget with more than a $5 million dollar surplus. That is something they could not do if they continued losing $3 million dollars per year on their psych units and spent an additional $8 million dollars on upgraded ceilings.
Excerpt from letter sent from Tasha Boerner Horvath & Nathan Fletcher
We request that you submit a comprehensive plan… within 30 days of the correspondence… Should you fail to do so, we will pursue legislative action beginning with a state audit of the Tri-City Medical Center. A thorough review of the actions, conversations, correspondence, and billing practices of Tri-City will help provide a public accounting of the reasons behind the closure of the behavioral health units.
….. continued failure to show substantive progress and a concrete plan will leave us no choice.
When the seven members of the Tri-City Board received the Boerner Horvath-Fletcher letter, they responded immediately.
It’s disappointing that you would issue a letter with threats, demands, accusations, and false statements prior to discussing facts, circumstances, challenges, and the potential for collaboration.Response sent to Boerner Horvath and Fletcher
… It’s incomprehensible that legislative action would be taken prior to an actual discussion or visit to Tri-City to fully understand the circumstances and ongoing efforts to establish a collaborative regional plan.
…If you pursue the suggested action it will add substantial cost and resource burdens to State, County, and local agencies.
The County has invested more than 700 million dollars into mental health in each of the last two years. County Supervisors have shown willingness to invest even more resources in a well-rounded, sustainable plan to manage mental health issues in the entire County.
At the County Supervisors Meeting on June 25, Supervisor Jim Desmond (representing Oceanside, San Marcos, and Escondido) said, “The Tri-City Board are regular people making tough decisions for their community. They believe if they bust their budget by spending even more money they don’t have, they may be forced to close the entire hospital, just like Fallbrook and San Clemente Community Hospitals, which would leave an even larger gap in North County health care services.“