Emergency room could reopen soon: Modesto company to manage hospital in Coalinga

Coalinga Regional Medical Center has signed with a Modesto-based health company to take over management of the partially closed hospital beginning June 1, with a goal of reopening the emergency room and other services.

The hospital board of directors approved a contract on May 24 with American Advanced Management Group, Inc., to run the hospital, which includes 24 acute care beds, 99 nursing home beds and a rural health clinic, said hospital CEO Wayne Allen.

The hospital announced last month that it would be closing by June 15 because of financial losses of $4.5 million. The emergency room shut down on May 4, leaving the city of 16,658 without an emergency room for 40 miles. The nearest hospital to Coalinga is Adventist Health in Hanford and the next-closest hospitals in Visalia and Fresno are more than 60 miles away.

Allen said the five-year agreement with American Advanced Management Group should mean that "we merely had an interruption of services for a short period of time." The emergency department, along with the laboratory, radiology department, pharmacy and the 24 medical-surgical beds should be back in operation soon, Allen said.

The hospital's rural health clinic and physical therapy department remained open, as did the skilled nursing facility — but transfers of nursing home patients had begun.

Under the agreement, the license for the hospital will remain with the district, Allen said. The hospital is not being sold, he said. American Advanced Management Group will run day-to-day operations and the hospital chief executive officer and chief financial officer will report to the company. The district or the company can terminate the agreement without cause, Allen said.

Outside agreements to operate district hospitals do not always work. Tulare Regional Medical Center turned operations over to Healthcare Conglomerate Associates several years ago, and the hospital filed for bankruptcy and closed last year. The district and the company are embroiled in lawsuits. The district is working to try and reopen the hospital by October.

Allen said the Coalinga hospital will be operating at a loss in the beginning and American Advanced Management Group will have to absorb that. "Over time, they have tools and resources to hopefully get in into a profitable bottom line and then the profit at that time belongs to them," he said.

Taking over failing hospitals is not new to American Advanced Management Group, which has grown quickly in the less than 10 years since its launch. Earlier this year it took over management of Glenn Medical Center in Willows, and in 2016 it reopened Colusa Regional Medical Center, which had filed for bankruptcy and closed. The company owns Central Valley Specialty Hospital, a long-term acute-care hospital in Modesto, and nursing homes in Modesto and Riverbank. It also has American Advanced College, an allied-health school in Stockton, among other health businesses.

Gia Smith, CEO of American Advanced Management Group, said the company's goal is to "keep health care in small cities and rural communities in California." The company "wants to make the hospital self-sufficient," she said. "We're not trying to make money off the hospital."

The hospital in Coalinga employed about 200 people and Smith said bringing employees from the community back to the hospital is a priority: "We'd love to give those people their jobs back."

The company also is working to bring Coalinga doctors back to the hospital to provide services, she said.

Smith said the company is developing a strategic plan to reopen the hospital, but she could not say how soon services will return. She is working with Allen, who will remain as the hospital CEO, and with the California Department of Public Health.

The hospital reopening cannot happen soon enough for residents of Coalinga.

Mary Blyth Jones, owner of the Coalinga Press, said one family told her they couldn't stay in a city without a hospital and placed their home for sale. The house sold on May 24, the day the hospital board of directors signed the agreement to keep the hospital open, she said. Another resident broke his foot on the day the hospital emergency department closed.

"There's a lot of sad stories," Jones said.

Jones herself needed an emergency room last Friday when she had a heart attack. Fortunately, an ambulance was available to take her to the Adventist hospital in Hanford, she said. "They just do a bang-up job … but it would be nice to have a hospital in Coalinga."

This story was originally published May 31, 2018 at 3:55 PM with the headline "Emergency room could reopen soon: Modesto company to manage hospital in Coalinga."