Santa Barbara’s Sansum Medical Clinic Facing a Financial Crisis

Fear of the COVID-19 Virus Keeps Patients From Visiting Sansum Doctors

Though Sansum Medical Clinic is hoping that the most recent federal relief bill has language that might allow it to apply, the worst-case scenario is very bad, according to CEO Dr. Kurt Ransohoff (above), who nonetheless remains optimistic: “We’re still thinking we can pull out of it.” | Credit: Paul Wellman

By most metrics, Sansum Medical Clinic qualifies as the proverbial 9,000-pound gorilla when it comes to providing medical care throughout Santa Barbara County. With more than 200 doctors on payroll and nearly 2,000 employees, Sansum treats about 130,000 patients a year throughout its 22 clinics.

Sansum ​— ​now approaching its 100-year anniversary ​— ​easily ranks as the county’s single biggest health-care provider. One-third of its patients are insured by the federal government. But for a host of esoteric legal reasons, Sansum may not be eligible for any of the $75 billion Congress voted to help hospitals hard hit by the costs of the COVID-19 crisis. That’s because Sansum is not legally affiliated with any hospital. That makes it unique in California, perhaps in the nation.

Though they are hoping that the most recent federal relief bill has language that might allow Sansum to apply, it’s still dangerously uncertain. The worst-case scenario, according to Dr. Kurt Ransohoff, CEO of Sansum, is very bad, but “we’re still thinking we can pull out of it.”

Since the pandemic began, Sansum patients have been canceling about 60 percent of their visits. Most of the other visits are by Sansum’s new teleconferencing platform. Typically, elective procedures ​— ​such as cosmetic surgery or what Ransohoff termed “my-knee-hurts-when-I-jog” operations ​— ​account for about one third of Sansum’s revenues. When all that stopped, Sansum found it had bled $5 million in March. In response, late last month, the clinic furloughed 600 workers, cut its doctors’ pay by half, and took out a line of credit. Sansum ​— ​like other major health-care providers ​— ​announced plans to partially resume elective surgeries and procedures beginning next week. It’s not clear, however, the extent to which that will provide the degree of relief needed.

Into this pending catastrophe stepped State Senator Hannah-Beth Jackson, State Assemblymember Monique Limón, and Congressmember Salud Carbajal. “Sansum is so critical to Santa Barbara. You can’t overstate it,” Limón said. “Without Sansum, people would have to drive to Ventura or Santa Maria for treatment.”

Limón and Jackson began scouring Sacramento, looking for a spare $20 million that the clinic projected it would need by year’s end. “We’re looking under every rock,” said Jackson, but it is not an easy task. By law, 40 percent of the state’s general fund must be spent on education. And then everybody thinks Santa Barbara is so wealthy it doesn’t need help.

Meanwhile in the halls of Congress, Carbajal is working to get the Energy and Commerce Committee to expand its definition of a health infrastructure. As it is now worded, Sansum’s corporate structure would disqualify it from any future congressional relief package.

About 10 years ago, Sansum and Cottage Hospital launched an effort to merge. But the Federal Trade Commission and the California Attorney General eventually objected, citing the undue market influence such a monopolistic entity could wield at the expense of patients and insurers. Had that merger gone through, Sansum would not be in its current jam.
Supporting all their efforts have been the Cottage Health system and the California Medical Association, a political juggernaut in Sacramento. Ransohoff is optimistic something will come of  it. “The good news here,” he said, “is that I never heard the word ‘never.’ ”

Sansum’s Problem Is Every Doctor’s Problem

Although Sansum’s challenges are the most dramatic and dire, it’s only one manifestation of the widespread fiscal woe wrought by the COVID crisis on local health-care providers. Dr. Kevin Casey, a vascular surgeon, is the president of the Central Coast Medical Association, which represents about 800 doctors. “Cottage’s number of cases is down to 25 percent,” he said. “And on average, most practitioners have seen an 80 percent drop.” Some practices have been forced to temporarily close; others have had to cut back staff. Everyone is seeing fewer patients.

Dr. Chuck Fenzi, who runs the Santa Barbara Neighborhood Clinics, reported an average 363 patients a day visited his clinics during the first week of March, but only 131 patients visited two weeks later. When the clinics went live with their new tele-health platform, those numbers went up to 267. Fenzi said the clinics had to lay off some staff. His biggest concern was for all the patients dealing with diabetes, hypertension, and chronic heart disease. People are afraid they might contract the virus at a clinic, he said. But these are also the very patients most at risk because of their conditions.

A recent statewide survey conducted by the California Medical Association estimated that up to 13 million Californians could lose access to their physicians unless state and federal lawmakers take action. The survey reported that 75 percent of all practices had taken big financial hits. Half of all practices had to lay off or furlough employees, 65 percent reduced physician and staff hours, and 34 percent have cut physician salaries. To date, it remains uncertain if any doctors practices in Santa Barbara have qualified for the federal business-relief loans popularly known as PPP or Personal Paycheck Protection.

In the meantime, Dr. David Dodson, an internal medicine specialist at Sansum and the former president of the Central Coast Medical Association, wonders how he can provide the preventative care that reduces the risk of heart attacks and strokes. It’s hard to do that when patients are staying away in droves.

Dodson works out of Sansum’s downtown digs where the waiting rooms are empty. He used to see about 17 patients a day. Now, it’s a busy day if he sees seven. One day he saw no one. “And we’re open. We have normal business hours.” Last week, he was supposed to see a patient with a family history of melanoma, an aggressive form of skin cancer. This patient complained of a skin rash, so Dodson wanted to see him in person; but he never showed up, and Dodson is not sure why. A lot of patients, he stated, are simply too afraid.

And as a doctor working for Sansum, Dodson’s pay has been cut in half. “I consider myself lucky,” he said. “With the limited number of people I actually see, I don’t know that I’m earning my keep.”

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