As we enter the New Year, many in the health care industry feel as if we
are sprinting across ever-shifting sands. Planning for the future is particularly
challenging in lieu of changes from the Affordable Care Act. Some of the
anticipated changes will be positive and some will negatively affect hospital
economics across the country. It will be more important than ever for
Torrance Memorial to partner with the community in ways that allow for
the provision of high quality medical care and valuable community services.
Pulse sat down with Craig Leach, President/CEO of the newly named Torrance Memorial
Health System, to give you answers about how the hospital is navigating
the changes in health care reform—while continuing to provide excellent
services to our South Bay community.
Q: Torrance Memorial has grown dramatically over the years and seems to
be a major employer in the community. Is that true?
A: Yes, Torrance Memorial is one of the largest employers in the South Bay,
employing almost 4,000 people. Torrance Memorial has a major economic
impact on the South Bay economy, as not only a large employer, but also
a provider of free or assisted health care programs.
Q: As Torrance Memorial has grown you must have been thinking ahead about
health care reform and its impact on the medical center and the community.
A: We have been planning and continue to plan for its impact on both the hospital
and our community. One of our concerns is the long-term negative economic
impact on hospitals and physicians. Torrance Memorial currently derives
a mere 2% profit margin from taking care of patients—clearly a slim margin.
Q: That is a slim profit margin. How, then, has Torrance been able to afford
the construction of the new patient care tower? (Torrance is currently
building a seven-story, state-of-the-art patient care tower named the
A: As we envisioned the construction of our new patient tower, we knew that
the Affordable Care Act (also called ‘Obamacare’ by many)
would likely have a negative economic affect on the hospital. We did our
homework and planned accordingly. We saved money over many years to help
pay for the tower, and we also borrowed $200 million that will be paid
off during the next 30 years. Because of the scope of the project, we
deemed it imperative to approach the community and ask them to help us
with financial support for the tower. We had originally budgeted $75 million
in gifts from the community to help us pay for it. We were surprised by
the outpouring of support. We are now approaching $140 million in donations.
It is an amazing statement on the part of this community that they trust
this hospital and believe in the importance of this new community asset.
We feel very fortunate to have the support from the community that we do.
Q: Returning to the topic of health care reform and the Affordable Care
Act, what has been the impact on Torrance Memorial?
A: To date, the impact on the hospital has been a reduction in payments both
from Medicare and private insurance. This is one reason our margins are
so small. We do, however, hope that more individuals and small employers
in the community will find new options for affordable health insurance
as offered under the recently formed
Covered California Health Insurance Exchange. We don’t know the numbers yet of how many have signed up in our
area as it’s still very early since its implementation.
Q: Can community residents who buy insurance through Covered California
use Torrance Memorial?
A: We have worked hard to open access to Torrance Memorial for the Covered
California health insurance plans. To date, we have contracted with the
Blue Cross EPO, Blue Shield PPO, and the HealthNet PPO and HMO plans.
But, just like all insurance plans, the provider panels change and are
sometimes complex. We’ll try to keep the community current of our
offerings on our web site at
torrancememorial.org/CoveredCA, or by calling 310-517-4711; alternatively, consumers can call the health
Q: Torrance Memorial is so active in the community. Can you tell us about
the ways in which the medical center assists the community?
A: One of the mandates of being a non-profit hospital is to annually report
how we impact the community in a positive way. In 2012, the most recent
year we have compiled this report, we provided about $60 million in services
and subsidies to the people of the South Bay. We subsidized government
programs (Medicare and Medi-Cal), by approximately $47 million. In addition,
we provided almost $8 million in free care to patients who either couldn’t
afford to pay or who didn’t have health insurance. We also provide
a host of community service programs from health education classes; support
at local health fairs; free van transportation, and other programs. (See
side bar for a list of community services and programs Torrance Memorial
provides.) The value of those services to the community is between $4
million and $5 million annually.
Q: I had no idea the hospital provided so many community programs! Do you
think the community is generally aware and able to benefit from them?
A: The purpose of articles such as this Q&A is to continue to inform the
South Bay community of all that is available to them. The medical center
offers so many programs that provide a wide array of benefit for just
about everyone—from children to the elderly. The more people are
aware, the more we impact the community. That’s our goal.
Q: When you think back over the past year and all the community organizations
that Torrance Memorial partners with, is there one in particular that
brings you joy and satisfaction?
A: Well, as you can see from our list of community programs, it’s hard
to single out just one. But I will say that our partnership with Harbor
Interfaith Services is really special. Harbor Interfaith is a non-profit
organization serving the Harbor Area and South Bay communities of Los
Angeles, including San Pedro, Harbor City, Harbor Gateway, Lomita, Torrance,
Wilmington and Long Beach.
In 2013, Harbor Interfaith assisted almost 22,000 homeless and working
poor people—the majority of whom were families. As I understand
it, this represents a nearly 70 percent increase in service demand and
provision since the inception of our partnership. In our more than five
years of partnership, Torrance Memorial has worked to channel resources
to respond to the growing needs of Harbor Interfaith. Support and activities
have included: financial assistance for dental care, the food pantry,
health education, and child care programs.
Q: Lastly, with all the economic uncertainty facing hospitals, will Torrance
Memorial continue to offer so much support in the form of free programs
and services to the community?
A: It is our goal for Torrance Memorial to continue to grow and provide
value to the people of the South Bay. I am proud of our organization and
how hard everyone works to serve both the patients when they are at their
most vulnerable, and other people in the community who need our help.
We will continue to be a community partner in as many ways as we can,
and we are fortunate to receive the emotional and economic support from
our community like we do.