San Francisco Chronicle - (Sunday)
New hospital focuses on maternity, orthopedic care
When California Pacific Medical Center opens the doors to its new $538 million hospital in San Francisco’s Mission neighborhood next month, its services will fall in line with what health economists say has been trending in the hospital business for years.
The new Sutter-owned acute-care hospital, to be called CPMC Mission Bernal, will expand maternity and orthopedic care, two sources of hospital revenue that experts say are increasingly profitable industrywide. And it will phase out skilled nursing and subacute care, two services that generate lower margins, according to health economists.
The hospital will replace CPMC’s St. Luke’s hospital, located on the same block, which was built 150 years ago and does not meet seismic standards that hospitals must comply with by 2030. It is one of two new medical centers CPMC plans to open between now and 2019. The second, at the intersection of Van Ness Avenue and Geary Boulevard, is slated to open in March. CPMC Mission Bernal has six delivery rooms, double the current capacity at St. Luke’s. Hospital administrators hope to double the number of births completed at the new hospital.
“It’s definitely an area of growth for us,” said Shannon Thomas, Mission Bernal’s site administrator.
The new medical center will begin performing orthopedic
surgeries — knees, hips and shoulders are among the most common procedures — which St. Luke’s did not do.
It is also expanding shortterm acute care for the elderly, from 19 beds to 34 beds, and growing its emergency department from 12 to 16 units.
The new hospital will not have skilled nursing or subacute care, which St. Luke’s had long provided. Subacute is a type of skilled nursing care where patients typically need long-term medical support, like ventilators. Skilled nursing patients — meaning those with access to a registered nurse during all hours of the day — and the 17 remaining subacute patients have either been relocated, or will soon be relocated, to CPMC’s Davies campus in San Francisco, where they will continue receiving care. But none of CPMC’s four campuses will be accepting new skilled nursing or subacute patients in the future.
The closure of the skilled nursing and subacute unit at St. Luke’s will reduce the number of skilled nursing beds in San Francisco by 79 and eliminate subacute beds in the city altogether, according to a 2017 report by the San Francisco Department of Public Health. The overall number of skilled nursing beds in the city has fallen 30 percent since 2003, from about 3,500 to 2,400, largely due to reductions in hospitalbased beds, the report found.
“Skilled nursing home and subacute care is almost always a money loser for hospitals,” said Gerard Anderson, a health economist and professor of health policy at Johns Hopkins University. “Maternity is not a big moneymaker, but it’s a good moneymaker for most hospitals.”
Maternity care does not make quite as much money as cancer and cardiology, but all three are generally considered moneymakers for hospitals, Anderson said. This is because patients tend to comparison-shop more for nursing care and less for treatment for cancer, a heart attack or maternity because those tend to be one-time or rarer occurrences where patients need to seek care immediately, he said. Hospitals can mark up prices for those services more.
Little data are available on profit margins for specific types of medical services at California hospitals. But a 2014 analysis of hospitals in New York found that from 2009 to 2013, higher payments from insurers and the state’s Medicaid program made maternity care more lucrative for many hospitals, prompting some to add maternity beds. The data was analyzed by a health analytics firm for Crain’s, a business news publication. A 2016 study by the health care consulting firm Avalere Health found that in Pennsylvania, freestanding skilled nursing facilities saw profit margins fall 28 percent from 2007 to 2014.
It’s likely that California hospitals are seeing similar changes, said Richard Scheffler, head of UC Berkeley’s Petris Center, which researches health economics.
“There’s big bucks in babies, hospitals know that,” Scheffler said. “I think this is a good thing, by the way. The more hospitals available in the Mission that can deliver babies, the better . ... We get some form of increased competition. If it also happens to make money for them, this is America. This is the American health care system.”
Scheffler said moving subacute care out of hospitals is a positive development. Longterm stays in hospitals can increase the chances of contracting a serious illness such as pneumonia, which can be particularly dangerous for older patients.
“The more things we can do out of the hospital, the better off the patient is, and it’s good for our bank account,” he said. “I’m in favor of moving things out.” CPMC Mission Bernal complies with seismic retrofitting requirements that all acute hospitals must undergo by 2030, as required by state law.
Catherine Ho is a San Francisco Chronicle staff writer. Email: cho@sfchronicle.com Twitter: @Cat_Ho