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Doctors Medical Center debt relief approved by Contra Costa County Board of Supervisors

Doctors Medical Center debt relief approved by Contra Costa County Board of Supervisors


Approval key step in 5 X 8 shared commitment plan to preserve full-service hospital, restore emergency department services


Martinez, Calif., Dec. 2, 2014—The Contra Costa County Board of Supervisors approved on Tuesday a pair of debt relief measures for Doctors Medical Center (“DMC”), giving contingent backing to a new plan to save the hospital and restore its emergency department.


“The board vote was critical and a necessary piece of our community-wide strategy for saving Doctors Medical Center,” said Eric Zell, chairman of the West Contra Costa Healthcare District.  “It acknowledges the hospital's vital role in provision of public health services in West County.”


Last month, members of the Healthcare District board unveiled a last-ditch strategy—called the 5 X 8 shared-commitment plan—to avert imminent closure of DMC, preserve it as a full-service hospital, and restore emergency department services for at least five years.  The strategy relies on a combination of debt relief, new revenue sources, and on-going and new spending reductions from eight different sources to close an $18 million to $20 million annual operating deficit.


On Tuesday, the Board of Supervisors voted to approve resolutions proposed by Supervisors John Gioia and Federal Glover.  The first, approved on a 4-1 vote, would temporarily suspend a $3 million repayment to the county of cash advances previously made to the Healthcare District.  The second, approved on a 3-2 vote, would waive permanently three additional consecutive years of repayments totaling about $9 million provided the District has secured other revenue sources and operational savings worth $15 million a year. 


“I wanted the County to step forward as the first stakeholder to commit to closing DMC's financial deficit and hope that this action encourages other stakeholders to do the same immediately,” Gioia said.  “Every piece is necessary to make this work.”


In addition to fiscal relief from the county, the 5 X 8 plan counts on increased charitable giving to a reinvigorated DMC Foundation; continuation of ongoing operating efficiencies at the San Pablo hospital and additional payroll and employee benefit savings; passage of a new District parcel tax measure; $15 million from the city of Richmond from a community benefits funding package negotiated with Chevron; increased public health insurance reimbursement rates stemming from establishment of a medical training/residency program at DMC; and long-term debt support from other hospital systems in Contra Costa and Alameda counties.


Recently, in a shift in how DMC provides health coverage to its own workforce, it moved its employees into the Kaiser Permanente system, saving DMC an estimated $4 million a year in benefits cost.


On Monday, at a meeting of the Healthcare District board, DMC directors acted on another piece of the 5 X 8 plan.  The board voted unanimously to adopt DMC Foundation bylaw changes and name new members to the charitable fundraising organization. 


Next, the District board is expected to undertake a round of public opinion research to test voter support for a new parcel tax measure to go on the ballot in June 2015.


Click here for PDF:  Debt Relief