Written by Silver City Daily Press on June 11, 2018
Editor’s note: In 2015, the Daily Press ran a three-part series following the closure of Cochise Regional Medical Center in Douglas, Ariz. In advance of the Grant County Commission’s upcoming decision on the future of Gila Regional Medical Center’s ownership, set for their meeting on Tuesday, the Daily Press returned to Douglas to study the impacts to that community.
Three years after its corporate owners boarded the doors, the former Cochise Regional Medical Center in Douglas, Ariz., is overgrown and crumbling. It has been replaced, in part, by a system of community partners forming a sort of safety net. A very different community, Grant County, lacks similar partners, but the present Gila Regional Medical Center administration has identified some potential solutions to some of the very same problems that led to the closure of Cochise Regional.
On July 31, 2015, after years of struggling under the control of a succession of companies and organizations, Cochise Regional Medical Center finally and permanently closed its doors. Since Cochise County sold the hospital off in the late 1970s, the hospital passed — under various names — from company to committee to company, consistently cutting services. The declining quality of care finally disqualified Cochise Regional for receiving reimbursements from Medicaid and Medicare, which — as it would likely be for any rural hospital with an aging, low-income population dependent on those reimbursements — proved to be the death knell for the only hospital in rural Douglas.
Following the closure of Cochise Regional, Jim Dickson, CEO of Bisbee’s Copper Queen Community Hospital, told the Daily Press that he and his team had been expecting it for some time and had put a plan in place. That included an urgent care facility, and eventually, a full, stand-alone Emergency Department. Even in 2015, he said he had already doubled Copper Queen’s Emergency Department staff in anticipation of the expansion.
Today, just across Pan American Avenue from downtown Douglas, bordered by a Church’s Chicken, McDonald’s and a Best Western hotel, rises the new Copper Queen Medical Associates campus — including offices, labs and the promised stand-alone ER. There, Dickson says, Douglas and more rural surrounding residents can access state-of-the-art emergency care, and far more. He said patients can also expect observation and diagnostics and, through Copper Queen’s already extensive use of telemedicine, consult with specialists all over Arizona. He said they are even delivering babies out of the new facility now.
At the time of Cochise Regional’s closure, Chiricahua Community Health Centers had recently renovated a vacant school building into the Pediatric Center of Excellence. It later expanded services through its existing Jennifer “Ginger” Ryan Clinic to help catch more of those patients who used to rely on Cochise Regional for care.
A pleasant surprise
According to business owners and patients in Douglas on Saturday, the service provided by this combined safety net actually exceeds that of Cochise Regional toward the end of its existence.
“I’m not an expert on health care, but it’s quite likely that a higher level of care is available in Douglas now with the newly expanded Copper Queen facilities (including the new free-standing ER),” said Robert Carreira, Center for Economic Research at Cochise College, in Douglas. “Douglas is also home to the Chiricahua Community Health Center, which has been very active in the region in recent years and has expanded its presence and services throughout the county, including Douglas. And Copper Queen, in addition to its physical presence in Douglas, can leverage its facilities in Bisbee (including its full-service hospital) just 25 miles away, to also serve residents of the Douglas area.”
“It’s better than nothing,” said Alexandra Boneo, owner of the Blueberry Café. “Sure, people complain there is no hospital and will drive to get to one. But I haven’t heard of any negative experiences there.”
Shaine Parker, 70, had been a patient at Cochise Regional, and has sought care at the Copper Queen ER in Douglas. But, he said, he has to regularly travel to see one specialist in Sierra Vista and two in Tucson. Still, he was content with the Copper Queen facility, just as he was with Cochise Regional.
“Hospitals like Cochise act anymore as an emergency room anyway,” he said.
Economics
Patients and professionals alike acknowledge the hit that not having a full hospital locally has had, and likely will continue to have, for local economic growth. They all say, however, it’s unlikely that many Douglas locals have left as a result.
“Douglas has lost population since 2000, but that trend began before the hospital closure and has been countywide,” Carreira wrote in an email to the Daily Press. “In fact, Sierra Vista, which got a new 177,000-square-foot, 100-bed, state-of-the-art hospital in 2015, has also lost population and has continued to do so. Also, at the time of the closure of Cochise Regional, there was excitement about the new expanded Copper Queen facility, particularly the stand-alone ED, so it’d be difficult to envision anyone or any businesses leaving town over it (at least not to any significant level).”
But during the wait for the Copper Queen expansion, Boneo said, money for care and other services drained out of the county.
“I think it divided us,” she said. “I think very few people left, but [many] were upset that they closed it. A big portion of people were forced to seek services in Mexico, even if they didn’t like it. Better to be at a hospital in 10 minutes across the border than drive 30 miles to Bisbee, or farther to Tucson.”
The lack of a hospital hasn’t killed all hope, as Boneo opened Blueberry Café about one year ago — two years after Cochise Regional closed. But that isn’t the only consideration.
“It was a crisis moment, but now it’s fine,” she said. “That’s what I see from the inside. But from the outside, you wouldn’t know that. You see a hospital closed. There’s no hospital. You wouldn’t come here with your families. It looks bad.”
“We can’t even advertise this region as a retirement community anymore,” said Tony Martinez, a longtime Douglas resident who now works part time at a furniture store. “We’re going to become a ghost town. Most of it already is.”
Walking in downtown Douglas, many storefronts are vacant — many more than in Silver City — and no fewer than three businesses promoted going-out-of-business sales in paint on their windows.
Admittedly, the city of Douglas has kicked off a few programs to combat its economic development issues, including seeking Arts and Cultural District designation.
National trends
Maggie Elehwany, vice president of government affairs and policy for the National Rural Health Association, said closures like that of Cochise Regional are the new norm for communities throughout the rural U.S.
“We have seen a hospital closure crisis in rural America, an enormous increase since 1980,” she said. “Of more significance is that one-third of rural hospitals are at financial risk, meaning they could close. One year ago we had 40 percent of rural hospitals operating at a financial loss. One year later, we have 44 percent operating at a financial loss. We think this closure crisis is only worsening.”
Local governments’ sales of hospitals they own, like the one being considered by the Grant County Commission, are also increasingly common.
“Because every rural area is different, there are very positive stories about where hospitals were saved because of a move to private ownership,” Elehwany said. “There are also very sad stories where consolidation was just a quicker way to close that hospital and move resources elsewhere. There have been some bad actors at play.”
Most of that, Elehwany said, stems from financial hurdles created for those hospitals by a series of decisions from Congress stretching back to the late 1980s, up to and including the controversial Affordable Care Act, also known as “Obamacare.”
Copper Queen CEO Dickson said these consolidations and sales are all but inevitable for smaller, rural hospitals.
“You can’t be all things to all people,” Dickson said. “The model has to shift to outpatient, have the ancillaries support it and that will bring about the change necessary. It sounds like you’re caught in the conundrum of a high overhead and low patient load. That’s the highway to hell. I think you need to align your system with a natural partner system to manage the patient flow. Do what you can do well and ration your care as much as you can.”
The difference
In the late 1970s and early 1980s, Cochise Regional and Gila Regional were both county-owned hospitals facing the same federal changes and challenges. Cochise County opted to sell their hospital. Grant County, instead, gambled on financing to construct what would become Gila Regional in 1983. There, their paths diverged.
To secure financing, Grant County was required to choose either a lease agreement or a management contract for the new Gila Regional. In 1988, that contract went to Quorum Health Resources. That company operated Gila Regional until 2007, when — in light of problems with Quorum, along with the expiration of the financing agreement — Grant County opted to regain control of their hospital.
Also, while nearby existing partners were able to form a safety net to catch patients from the closed Cochise Regional, Gila Regional Medical Center likely wouldn’t be so lucky. Regional nonprofit Hidalgo Medical Services regularly partners with Gila Regional and serves as another option for health care for the four-county area. Silver Health CARE also serves as another, private option for some services.
Were Gila Regional to ever close, CFO Richard Stokes said that safety net would be a long time coming. And Gila Regional serves as a hub throughout the region.
“One thing that is different about Gila Regional is it’s a long way to somewhere else,” he said. “We need to determine which services the community needs, then determine if it would add to the bottom line.”
As for Dickson’s insistence that Gila Regional may need to look at “rationing services,” Stokes said, “I have heard that many times. But you will never cut your way to prosperity. We’re both right. There are times to cut. What we’re trying to do now is cut fat, but not get into the muscle. That’s why critical access is a good idea.”
Solutions for GRMC
Stokes told the Daily Press on Sunday that the current administration doesn’t deny the challenges it faces and does not disagree that a regional partner would help it accomplish the expansions it plans — both those targeted by the administration and those required by the commission in its ongoing exploration of possible ownership models.
“As we move forward, we know Gila Regional needs a tie to a larger organization,” he said. “In the back of our minds, we’re thinking, ‘Who can we form a strategic, clinical affiliation with?” so we get things and they get things out of the relationship. We are very interested in that.”
Telemedicine is also in the cards. He said that, in particular, stroke and intensive care at Gila Regional would benefit from telemedicine.
Stokes said the hospital understands the County Commission’s concerns regarding the now almost 40-year-old building’s maintenance and upgrade needs. But, he claimed those concerns have solutions that may not be as drastic as were found in Juniper Advisory’s investigation.
“[Our maintenance guy said] we need a new roof, we have air handlers that are past their useful life,” he said. “He’s not wrong. But I said, ‘You need to go visit some other hospitals.’ Every building at some point has to have a roof replaced. You go to every county building and you’re going to find one that needs a new roof, or needs other things. This structurally is as good as any I’ve ever worked in. It’s like anything else. You have to manage it,” Stokes said. “I enter into lease arrangements with companies who specialize in leasing to government hospitals. Getting into the tax-exempt status of the interest is where the good is. That is one of the benefits of being a government-owned hospital.”
Mainly, Stokes said the financial problems at Gila Regional were the fault of past administrations, and need time to ferment.
“All the things we’ve been working on since I’ve been here are really basic ‘How to Run a Hospital’ stuff,” he said. “I’m trying to get rid of all of these silos here. These different revenue cycles are all part of the same system. When I got here, we were heavily siloed. And I got to tell you, this has not been popular. But, financially, at Gila, this is a self-inflicted wound. There was no reason ever for us to be in the position we are now.”
The National Rural Health Association’s Elehwany said the NRHA has identified several federal funding options to start facility upgrades like these, and is lobbying relentlessly for increases to both those programs as well as the creation of new funding sources.
“There are loan programs through the USDA that are available now that we are trying to streamline, because a lot of rural hospitals don’t know about those programs,” she said. “There are also grant dollars. It sounds … definitely worth investigating. Discussions right now are to make those programs even more robust. Before the community gives up, I would suggest they write their local congressional delegation for insight into where those stand.”
Stokes said he is aware of those programs and had used them before elsewhere.
“One of the things we’ve been talking about is talking to USDA for some of their Facilities Grant Program money,” he said.
“If I thought there wasn’t a way out at Gila Regional, that we had to sell, I would tell them,” Stokes said. “I have done it at hospitals before, because that’s my responsibility. But there are too many opportunities we just haven’t yet taken advantage of. There is so much potential here. We could have a bright future here. When people go to Las Cruces, when they go to UNM, they are going to a lesser quality hospital, for what we do.”
Grant County Commission Chair Billy Billings told the Daily Press last week that he expects the commission to vote on the future of Gila Regional at a combined work session and regular meeting on Tuesday at 9 a.m. at the Grant County Administration Building.
On October 1, 2018, an estimated 300,000 AHCCCS members will be transitioned to the new AHCCCS Complete Care (ACC) system. By making this change, patients will have physical and behavioral health services under one plan. The change will affect the majority of adults and children who are currently AHCCCS members. AHCCCS will be mailing letters to members this June and those people must select a plan by July 31 for services starting on October 1.
