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A Crisis for Rural Hospitals

The problems facing Lone Pine are part of a disturbing trend. The town's hospital is a vital lifeline and important employer, but teeters on the brink of bankruptcy.


LONE PINE, Calif. — The last baby, an urgent arrival, was delivered in 1995. The last surgery was performed a dozen years earlier. Now, even the emergency room at Southern Inyo Hospital is usually locked, its only doctor on call.

Here in the giant shadows of the eastern Sierras, a little hospital, buffeted by the changing winds that roil U.S. health care, is struggling to survive.

The story of Southern Inyo and of Lone Pine's desire to save it reflects similar sagas across the state. More than a third of California's hospitals are losing money, but the condition of the state's rural hospitals is far worse: An overwhelming majority are hemorrhaging dollars, merging with chains, declaring bankruptcy or closing outright. One in five has gone out of business or into bankruptcy since 1996.

At a time when medical mysteries are being unraveled at breakneck speed, the withering of the rural hospital network threatens to leave millions of Californians protected by only a minimum of health care service--or none at all.

And the trend has broader implications for many small towns, where the medical center, as it does here, serves as both health care and economic hub.

In Lone Pine, a one-stoplight community between Bishop and Ridgecrest in the Owens Valley, the 37-bed district hospital provides the largest source of employment, and the only emergency or acute care for 60 miles in one direction and 80 miles in the other along heavily traveled U.S. 395.

Residents note that Southern Inyo, which filed for bankruptcy protection in 1999, is important to thousands of travelers, many from Southern California, who pass through this remote, starkly beautiful region on their way to resorts in Mammoth, Lake Tahoe and Reno.

"This hospital saves lives," said Michael Dillon, an emergency room physician whose company is on contract at Southern Inyo. "It just needs to be here."

Without a surgeon or other specialists on staff, the hospital must send severely injured patients to more sophisticated facilities. But Southern Inyo's ability to stabilize them first is essential. Otherwise, doctors say, many patients would not get treatment within the "golden hour," that crucial period after a trauma when lives can more easily be saved and aftereffects reduced.

"You would exhaust that just with the transportation time to the next hospital," said Tom Kozak, a San Diego-based family practice and emergency physician who spends eight days a month at Southern Inyo.

Many of those treated in the hospital's emergency room are victims of high-speed collisions on U.S. 395, which runs through town. Others have suffered heart attacks, and can be treated with clot-busting drugs before enduring the helicopter ride to a cardiac care facility in Los Angeles, 230 miles away.

In a town with just two resident doctors--one retired, the other part-time--losing the hospital and adjacent rural clinic "would be a disaster," said Herb Hawley, Lone Pine's funeral director. His mother survived a heart attack two years ago after she was stabilized at Southern Inyo before being flown to a Los Angeles cardiac care center.

The hospital is striving to cut costs, find funding and reinvent itself as a sort of medical steppingstone to more advanced care somewhere else.

"We just can't do everything anymore," administrator Donna Donald said recently. "I'd rather try to do a few things well."

But hospital officials and other experts in rural health care say that Southern Inyo is fighting an uphill battle. Among the pressures: declining public and private reimbursements, a remote location that drives up the cost of health care, and a small, aging population with few options for insurance coverage.

"The state has just not recognized the crucial need that rural communities have for these facilities," said Assemblywoman Virginia Strom-Martin, who sponsored unsuccessful legislation last year aimed at increasing funding to some of the smallest and most isolated hospitals.

Other measures in the works might help. One is a federal Critical Access Hospital designation, which allows hospitals in key locations to recoup more of their costs not covered by insurance. Consultants to Southern Inyo estimate that the program, which is just being launched in California, could eventually bring it as much as $175,000 to $200,000 a year. The hospital's annual budget is $6 million.

Another is the advent of telemedicine--video medical conferences with outside experts--which advocates say may help small, limited hospitals compensate for their lack of specialists.

But more is needed, say experts such as Stephen Lewis, the former executive director of the nonprofit California State Rural Health Assn. "A major problem is that the health care market is structured and designed around an urban reality that just doesn't match the reality in rural communities, where there may be one provider," Lewis said.

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