UPDATED Kaiser declines renewal of Alameda Hospital contract
Updated at 12:57 p.m. Thursday, November 12
Kaiser Permanente has opted not to renew its surgical services contract with Alameda Hospital. The current contract expires on March 31, 2010.
Kaiser members will receive surgical services at Kaiser’s own facilities as of that date, but they still may use Alameda Hospital for emergency and inpatient care.
Kaiser had contracted with the hospital while it expanded its own facilities in the East Bay, both Kaiser and Alameda Hospital said in prepared releases. It has since completed three new operating rooms in its Richmond facilities and a new medical office building in Oakland where some minor surgical work may also be done.
“We have had an excellent working relationship with Alameda Hospital and its medical staff over these last five years, providing high quality care since 2004. We will work closely with Alameda Hospital to transition our surgical services over a period of time,” Nathaniel L. Oubre, senior vice president and area manager for Kaiser in the East Bay, said in a prepared statement.
Alameda Hospital Chief Executive Officer Deborah Stebbins said that while the news does present significant challenges, the hospital is better positioned than ever to respond to it. Stebbins said the Kaiser outpatient surgeries make up more than 60 percent of the outpatient surgeries done at the hospital, generating a net margin of close to $2 million a year.
Stebbins said the hospital finished last year with a $500,000 surplus after years of losses due to ongoing efforts that include new program development, physician recruitment and renegotiation of third party contracts – things she said were totally unrelated to the Kaiser contract.
“The Executive Team is working diligently over the next few weeks to prepare a preliminary action plan to be reviewed with medical leadership and the Board of Directors in mid-December. Details of the plan will be disclosed as they are approved,” Stebbins said in response to follow-up questions posed by a reporter.
“While this is a very challenging turn of events at the hospital, we have every confidence that the lost revenue and contribution margin can be made up through a combination of interventions, including recruitment of new physicians and surgeons, examination of our staffing and wages, and development of new revenue
producing programs,” Stebbins said.
The hospital had been working actively to renew the contract, a staff report issued in June said.