OCEANSIDE — Tri-City Healthcare District officials are considering contracting out labor and delivery services in an effort to continue delivering babies in the district.
Tri-City Medical Center has experienced a reduction in its OB/GYN patients for more than a decade, but recent changes have exacerbated the situation, according to hospital executives, leaving its labor and delivery services financially unsustainable in the current model.
In 2009, Scripps Health purchased Sharp Mission Park, resulting in a loss of 50,000 covered patients for Tri-City. Scripps Health also purchased two private OB groups, which led to a “significant outmigration of commercial volume” in Tri-City’s fiscal year 2010-11.
For the last eight years, Tri-City Medical Center has experienced an annual loss of $3.5 million and is averaging less than one delivery per day.
In addition to Scripps, Palomar Health has also been taking more patients from Tri-City.
In 2021, Both Vista Community Clinic and TrueCare notified Tri-City of their new agreements with Palomar Health. The clinics would refer their patients to Palomar instead of Tri-City going forward.
The San Diego Local Area Formation Commission — the agency that governs the boundaries of special districts like Palomar and Tri-City to ensure they don’t encroach upon each other without good reason — granted Palomar Health access to the clinics within the boundaries of the Tri-City district under the claim of a public health emergency in 2022.
In early March, LAFCO upheld its health emergency determination, allowing Palomar to contract with those clinics until at least March 2025. With this decision, Tri-City expects its previous losses to triple annually.
The health emergency was related to the financial stability of the two clinics and their need for more financial support.
LAFCO Executive Officer Keene Simonds explained to the commission that the clinics would not be able to stay operational without Palomar’s help.
“Without the out-of-agency approval, it is reasonable to tie the probable clinic closures as elevated public welfare risks given a sizable portion of patients are first-generation residents and the clinics’ roles as known community resources would not be readily filled,” Simonds said via email.
Tri-City previously did not have contractual agreements with either Vista Community Clinic or TrueCare. In the previous model, the hospital district acted as a community partner that provided organized medical staff, including its nurses and facility, as support to the clinics.
The clinics themselves provided OB/GYNs and midwives to perform their regular practices, which resulted in the clinics having to self-fund the required coverage. Despite receiving reimbursement, the clinics still claimed to experience substantial financial losses each year, eventually leading to their decision to team up with Palomar Health.
Tri-City attempted to refute the public health emergency claim but was unsuccessful.
Not long after LAFCO’s ruling, Palomar Health announced the closure of its Poway labor and delivery unit in June due to low delivery numbers.
Tri-City executive staff presented four scenarios to the board during a special meeting on March 31. The first option would be to keep things running the way they are, which is financially unsustainable for the hospital district.
The second option would transition to a leaner staff model with more private OB group recruitment, and the third option would also cut back staff, add more private contracts and consolidate units to a women’s services unit.
CEO Dr. Gene Ma said savings from the second and third scenarios wouldn’t be enough to prevent impacts to other hospital service lines.
The fourth option would contract out the labor and delivery services at the hospital to a private entity. Staff requested 30 days to explore potential partnerships and to hear from the community before returning to the board with recommendations.
Labor and delivery nurses showed up to the March 31 board meeting to demand the hospital keep the unit.
Ma said the board does not want to close the hospital’s labor and delivery unit, however, they are aware of the financial issues at hand.
“That is why the proposal is to go look at partnerships and see what can be done,” Ma said. “The hope would be to keep these services here in partnership with Tri-City.”
Tri-City staff will return to the board with findings and recommendations at the next meeting on April 27.
