TURLOCK -- In today's turbulent health care environment, the few remaining independent community hospitals are taking a sober look at their horizons. And Turlock's Emanuel Medical Center is one of them.
Board members of the hospital and its Chicago-based parent organization are engaged in not-so-secret discussions about whether the 209-bed center should continue to go it alone.
The potential options include a merger, alliances, partnerships or other arrangements with one or more larger health care systems.
Hospital administrators aren't known for straight talk, but Chief Executive Officer John Sigsbury said this when asked if Emanuel will be an independent hospital in five years: "I think there's a chance we will be an independent hospital — and there's a chance we will be a significant part of someone else's strategy going forward."
The recent board discussions apparently have stirred rumors that Emanuel is for sale or being absorbed by a larger hospital chain.
Not true, the CEO said. "It's not for sale and we are not directly in discussions with anyone locally," Sigsbury said. He said he doesn't anticipate a major decision for Emanuel in the next couple of months, "but you may see some tweaking."
In an industry where a corporation may own more than 100 hospitals in different states, the nonprofit Emanuel is not entirely alone.
The medical center is owned by the Evangelical Covenant Church and has a sister hospital in Chicago. A division of the church, Covenant Ministries of Benevolence, oversees the hospitals, plus retirement communities and other ministries.
Ownership change a possibility
David Dwight, president of Covenant Ministries, said that it's possible Emanuel could break off from the church's health system or remain within the fold. The organization's board members have talked for six to seven months about potential changes.
"The discussion is about what the future of the hospital looks like," Dwight said. "It ranges from remaining independent to entering an affiliation." An ownership change is another option, he said.
He assured Turlock residents that the plan is to continue with a robust hospital serving Stanislaus County's second-largest city. "It's personal for me," he said. "My family goes back in Turlock for over 100 years."
Emanuel, which was founded in 1917, has a lot of factors to consider in charting its course. Like other local hospitals, it serves large numbers of poor and uninsured, struggles with shrinking reimbursements and physician shortages, and contends with the economic malaise of the Northern San Joaquin Valley, Sigsbury said.
Crucial elements of the national health care law promise a sea change in 2014. Many people will start buying coverage through a state insurance exchange, and thousands of previously uninsured county residents will join the Medi-Cal rolls.
Not alone in looking for partners
A hospital industry spokeswoman said Emanuel isn't the only independent hospital looking for partners.
"There are so many factors that are pressing down on hospitals from a financial standpoint," said Jan Emerson-Shea of the California Hospital Association. "There are numerous hospitals that are considering different types of partnerships and alignments."
She said provisions in the federal health care law will require California hospitals to absorb $17 billion in cuts to Medicare reimbursements. In addition, hospitals large and small will have to meet new quality standards.
Emanuel partners with Stanford University in a cancer center on its campus and continues to develop a program for treatment of heart disease.
Sigsbury would not divulge any talks with other entities. The hospital has 1,400 employees and an annual payroll of $95 million.
Emanuel's board chairman declined to talk about the discussions, and a second director did not return a call from The Bee.
Turlock Mayor John Lazar said he is confident that the hospital's board is committed to the community and will make the right choices for Emanuel's future.
"We've been very fortunate and blessed to have Emanuel in our community," said Lazar, who was born at the hospital when it was on Canal Drive. "The reality is that they are going to have to move forward and make changes."
He said the community's support for the hospital is evident in Emanuel's successful fund-raisers, particularly the Festival of Trees, which raises money for Hospice of Emanuel each holiday season.
Bee staff writer Patty Guerra contributed to this story.
Bee staff writer Ken Carlson can be reached at kcarlson@modbee.com or (209) 578-2321.
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