A little past the one-year mark, HealthBridge Children’s Rehabilitation Hospital in Orange is seeking to shore up its financial picture and boost its profile.
The hospital, operating out of a converted house on South Tustin Street, recently posted its first profitable month, according to Alan Ross, the facility’s administrator.
“It was $596 and we’re proud of it,” he said.
HealthBridge, which opened in February 2000, logged a loss in its first year of operation, due to startup costs and efforts to comply with state regulations, Ross said.
The facility provides care for up to 24 children and adolescents who have survived catastrophic illnesses or injuries. Services include acute and other forms of rehabilitation and outpatient physical, occupational and speech therapy.
HealthBridge is facing an issue many children’s facilities are wrestling with,how to deal with reimbursement realities without compromising patient care, Ross said.
“Our biggest payer is MediCal,” he said.
An estimated 70% of HealthBridge’s patients are covered by MediCal, Ross said. The remaining revenue for the specialty hospital comes from managed care companies.
“We work on a thin margin,” Ross said. “MediCal does not pay well. MediCal is a program that if you do everything right, you break even on.”
Figures from the California Office of Statewide Health Planning and Development showed that $3.2 million of HealthBridge’s first-quarter gross inpatient revenue of $5.6 million came from both traditional and managed care MediCal programs. When it came to net patient revenue, MediCal made up $685,303 of the facility’s net patient revenue of $1.4 million.
But Ross is quick to assert that HealthBridge takes pains to ensure patient care isn’t compromised by the facility’s reliance on MediCal. He said his medical staff includes a Children’s Hospital of Orange County medical director and one of a handful of pediatric rehabilitation specialty doctors in the county.
“We were founded to take care of patients who are difficult to treat. We certainly cannot,and we will not,lose money. But our motivation goes deeper,” Ross said.
HealthBridge’s balancing act isn’t uncommon among pediatric healthcare providers, industry observers said.
“Children’s hospitals are facing severe reimbursement issues, primarily from the underpayment of MediCal,” said Jan Ouren, senior vice president of business development and research for the San Diego-based California Children’s Hospital Association. “There is a large gap in the cost of patient care and the reimbursement dollars we receive.”
The association is backing a measure to increase MediCal spending by 40% at the pediatric outpatient level, Ouren said.
HealthBridge is one of four specialty hospitals owned and operated by Neurobehavioral Healthcare Systems Ltd., a privately held company based in Houston. Several partners with backgrounds in neurological rehabilitation established Neurobehavioral Healthcare around eight years ago, Ross said.
HealthBridge has a relatively big staff for its size,110 employees and 41 affiliated physicians. Part of the workforce is a result of regulations. For one, the state requires HealthBridge to have a kitchen on site, which requires cooks and other service workers.
The facility serves patients from infants up to age 21. Younger patients tend to be on ventilators, Ross said, while teenagers often come after automobile or bicycle accidents.
Referrals from general acute-care hospitals, such as CHOC, make up the vast majority of HealthBridge’s patient base, Ross said. Other sources include trauma centers at UCI Medical Center in Orange and Western Medical Center-Santa Ana, he said.
Ross claims that there’s no other stand-alone facility in Orange County that does what HealthBridge does. Tustin Hospital and Medical Center, though, does offer a pediatric sub-acute unit within its larger facility.
Some analysts believe that the move toward separate rehabilitation facilities may be an outgrowth of managed care.
“Pediatric rehabilitation is very specialized (and) expensive to contract with,” said Dr. David Feinberg, a psychiatrist at UCLA Medical Center in Los Angeles who has handled managed care negotiations. Because of the cost, Feinberg said managed healthcare companies have often looked for large adult chain rehabilitation centers to send all patients to, including pediatric ones.
But Feinberg noted that adult centers often don’t have a dedicated pediatric staff.
“Children need a site like this,they do not do well in adult nursing facilities,” Ross said.
Besides medical services, HealthBridge’s offerings also include an onsite school program staffed by the Orange Unified School District as well as structured activities for patients.
Meanwhile, HealthBridge is looking to expand. Ross said he plans to go to Neurobehavioral Healthcare Systems next year to ask the company’s partners to expand its beds and service offerings. The facility also is preparing for an inspection by the Joint Commission on Accreditation of Healthcare Organizations, an industry group. n
