Board meetings for the Mendocino Coast District Hospital are usually pretty dismal affairs. The facility in remote Fort Bragg, Calif., has been running at a deficit for a decade and barely survived a recent bankruptcy.

But finally, in September, the report from the finance committee wasn’t terrible. “This is probably the first good news that I’ve experienced since I’ve been here,” said Dr. Bill Rohr, an orthopedic surgeon at the hospital for 11 years. “This is the first black ink that I’ve seen.”

The committee erupted in applause, even a few cheers. But the joy was short-lived. By the next month, the hospital was back in the red.

Things first started going badly for the hospital in 2002, when the lumber mill in Fort Bragg closed down. Many people lost their jobs — and their health insurance, which had paid good rates to the hospital. Today, about 7,000 people are left in the blue-collar town, and the economy is propped up by tourists who come to the rugged Mendocino coastline to hike or fish. Visiting the hospital does not usually make it onto their itinerary.

By 2012, the hospital had declared bankruptcy. Now it’s barely hanging on. And some locals are worried that the only hospital in the area might close for good.

If The Hospital Fails, So Goes The Community

“Nobody can live here without that hospital,” says Sue Gibson, 78, a Mendocino resident. “I mean, the nearest hospital is an hour and a half away on treacherous mountain roads.”

It’s not only her family’s health and the community’s that Gibson is concerned about. She’s afraid the local economy would be wrecked. The hospital is the largest employer.

“It has probably the best-paying jobs, and if they close that, all of that income would go away,” she says.

That means less money spread around to the local bait shops and seafood restaurants. Also, Gibson says, the property values of businesses and homeowners would plummet.

Across the country, rural communities share similar fears. Small rural hospitals everywhere have been struggling to survive. Many people who live in these areas are older or low income — not a great customer base for a hospital that needs to make money.

The government used to pay these small critical access hospitals extra to account for that. Medicare reimbursed them 101 percent of their reasonable costs. But after the recession, the government trimmed payments to 99 percent of costs. Medicaid pays much less, sometimes just half the cost of providing the care.

At the Mendocino Coast Hospital, more than 80 percent of patients are covered by Medicare or Medicaid.

“The general health care reimbursement environment is to do more with less,” says Bob Edwards, the hospital’s CEO. “And I would even go so far as to say, it’s a starvation model.”

Plus, the government excludes a lot of expenses from its cost calculation, like doctors’ fees or janitorial services, says Wade Sturgeon, the hospital’s chief financial officer. Medicare basically tells the hospital what it will pay.

“So it’d be like going in to Safeway and saying, ‘Hey, there’s a jug of milk. I really want that jug of milk; I’ll give you $2,’ ” Sturgeon explains. “But the price says $3.50. ‘You’re only going to get $2.’ Often times, that’s what happens to us.”

The upshot: Many hospitals that never had to worry about controlling costs now do. They have to learn to compete in an open market, just like other hospitals, just like many other profit-driven businesses.

Some hospitals have planned ahead and adapted. Down the long, winding road from Fort Bragg, the Frank R. Howard Memorial Hospital in Willits just finished a $64 million renovation, complete with modern technology and a full organic garden that supplies the hospital cafeteria.

But some hospitals haven’t adapted. In the past five years, 57 rural hospitals in the United States have closed, according to data from the Rural Health Research Program at the University of North Carolina. Others have declared bankruptcy, like the Mendocino Coast District Hospital.

Battles Over How To Keep Hospital Afloat

The financial failure led to a lot of finger-pointing in this small town. Administrators blame the policy changes and payment reforms. Some doctors blame the administrators.

“It was economic mismanagement, to put a single label over all these things,” says Dr. Peter Glusker, a neurologist based in Fort Bragg for 37 years. “Because of people who just didn’t know any better.”

The public hospital is governed by a five-member board of directors, elected from and by the community. Glusker says some past directors knew nothing about finance or nothing about health care. Some just stopped caring.

So he and another doctor ran their own campaign, promising to shake things up on the board and change things. They were elected last year.

“There’s a segment of the population that says, ‘Oh good, it’s about bloody time,’ ” Glusker says. “But there’s another segment of the population, in the institution, that says, ‘Hey, you’re rocking the boat and this is bad.’ “

Glusker’s running mate and ally on the board is Rohr, the steely orthopedist, who wears his gray hair long, tied back in a tight ponytail. He spent many years in the corporate world and vowed to bring the kind of financial discipline he learned there to the tiny public hospital in Fort Bragg. A lot of people are afraid of him.

“Look, this is not about being ruthless,” Rohr says. “It’s about keeping this business alive, and it’s only alive if it makes money, OK.”

A lot of his sentences are punctuated like this, with a sometimes impatient “OK,” which seems aimed at making sure you don’t miss his point. Like when he’s giving a presentation at a finance committee meeting, staring daggers at the CEO.

“We keep saying $870,000 loss,” Rohr says. “Not acceptable, OK.”

Edwards, the current CEO, has been on the job six months. He’s the hospital’s fourth chief executive in a year. His right-hand man is Sturgeon, the brand-new CFO, who started in September.

On days the financial committee meets, Sturgeon wears a mint-green shirt and a tie with a $100 bill on it. He says things like, “Do the math.”

Right now, the hospital administrators and the doctors on the board are pitted against each other in a battle over how to keep the hospital doors open — a battle that is echoed at small hospitals across the nation.

Cut costs or raise prices? Board members disagree on best approach

CFO Sturgeon and CEO Edwards say the hospital should focus on increasing revenues. It should find more patients to come to the hospital, maybe develop new services to attract then.

“If you’re not growing, you’re dying,” Sturgeon says.

He says the hospital should also charge more money for services provided to patients who have private insurance — currently about 15 percent of the hospital’s patients.

“Anytime we don’t raise prices, we’re leaving money on the table,” he says.

But Rohr says that would put an unfair burden on the small-business owners in town, the ones who typically buy their own private insurance.

He and Glusker say the hospital should be focused on controlling costs.

“It’s obviously an expense problem,” Rohr says. “And you can come to that conclusion very quickly, just by looking at the data.”

The hospital is going to have to make some very difficult decisions to balance its budget, Rohr says. He offers this analogy: “There’s 20 people in the water about to drown. And there’s a rowboat there, but the rowboat can only hold 10,” he says. “If 11 people get in that rowboat, it sinks and all die, OK.”

At the hospital, this means choosing between a cardiologist and an ophthalmologist, a cafeteria and a new X-ray machine.

“It’s horrible to make the decision that 10 are going to drown,” he says. “But I’ve got to pick the 10. OK.”

One area Rohr thinks could be ripe for trimming? Administrative positions.

“I walk into the hospital to do rounds in the morning, and there are more people standing around with clipboards than with stethoscopes,” he says, “and that doesn’t feel like the right formula to me.”

But CFO Sturgeon says there’s not enough management. “Physicians always think there’s too much management,” he says. “You have some people with 50 direct reports. Does that make sense?”

There are some cuts both sides agree on. All say there needs to be some serious culling of the health benefits for hospital staff. Years ago, the nurses union negotiated to have the hospital pay full health benefits for any full-time or part-time nurse and their entire families. Nurses pay nothing toward their monthly premiums.

“Do the math. How many people are we paying for to have full family coverage?” Sturgeon says. “I’ve never worked in a hospital that provided the type of health insurance benefits that we have at this facility.”

Meanwhile, Need For New Hospital

To understand exactly how dire the financial situation is, one need only walk into the lobby of the hospital itself. It’s like stepping back into 1971. The main patient floor is lined with drab brown carpets. The smell of Salisbury steak spills out of patient rooms.

“I’ve been in Third World countries. This is pretty basic, OK,” Rohr says, walking by the operating suite.

Through the maternity ward and the emergency room, Rohr says the flooring is layered with asbestos. The concrete isn’t strong enough to hold the weight of modern CT scanners and MRI machines. On top of all that, in 2030 new state requirements kick in for earthquake readiness.

It all points to one conclusion. “We’re going to have to build a new hospital,” Rohr says.

So, not only is the hospital struggling to maintain a balanced budget through normal hospital operations but it also has to come up with tens of millions of dollars to replace itself in 15 years.

It’s an especially tall order for a hospital that just posted its first monthly profit in a decade, then slipped into the red again right away.

If you ask the Washington policymakers in charge of payment reform, some will say it’s just a harsh reality that some hospitals will have to close. Some previous local administrators have predicted that the Fort Bragg hospital will one day be replaced by a helicopter landing pad. People will be airlifted out for heart attacks and other emergencies. For other planned surgeries, like hip replacements, people will have to drive “over the hill” to another hospital.

But the people who live in Fort Bragg and Mendocino don’t like that scenario. Gibson has been hosting community meetings in her living room, where people spread out on the pink Victorian sofas to talk about how to save the hospital.

She’s rallying support for a possible solution, and it’s one the administrators and doctors are united around: a new tax on homeowners. Local residents will very likely vote on that in November 2016.

“The only way we’re going to be able to save this place, really, is with a parcel tax,” she says. “But they can’t even think about that until they clean up their act.”

After the Wall Street meltdown, banks were too big to fail. The feeling here is that the local hospital is too important to fail. And the residents will be tapped to fund the bailout.

This story comes from a reporting partnership of NPR, KQED and Kaiser Health News.

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As we launch into Thanksgiving week, consider this: Research shows that feeling grateful doesn’t just make you feel good. It also helps – literally helps – the heart.

A positive mental attitude is good for your heart. It fends of depression, stress and anxiety, which can increase the risk of heart disease, says Paul Mills, a professor of family medicine and public health at the University of California San Diego School of Medicine. Mills specializes in disease processes and has been researching behavior and heart health for decades. He wondered if the very specific feeling of gratitude made a difference, too.

So he did a study. He recruited 186 men and women, average age 66, who already had some damage to their heart, either through years of sustained high blood pressure or as a result of heart attack or even an infection of the heart itself. They each filled out a standard questionnaire to rate how grateful they felt for the people, places or things in their lives.

It turned out the more grateful people were, the healthier they were. “They had less depressed mood, slept better and had more energy,” says Mills.

And when Mills did blood tests to measure inflammation, the body’s natural response to injury or plaque buildup in the arteries, he found lower levels among those who were grateful — an indication of better heart health.

So Mills did a small followup study to look even more closely at gratitude. He tested 40 patients for heart disease and noted biological indications of heart disease such as inflammation and heart rhythm. Then he asked half of the patients to keep a journal most days of the week, and write about two or three things they were grateful for. People wrote about everything, from appreciating children to being grateful for spouses, friends, pets, travel, jobs and even good food.

After two months, Mills retested all 40 patients and found health benefits for the patients who wrote in their journals. Inflammation levels were reduced and heart rhythm improved. And when he compared their heart disease risk before and after journal writing, there was a decrease in risk after two months of writing in their journals. Those results have been submitted to a journal, but aren’t yet published.

Mills isn’t sure exactly how gratitude helps the heart, but he thinks it’s because it reduces stress, a huge factor in heart disease.

“Taking the time to focus on what you are thankful for,” he says, “letting that sense of gratitude wash over you — this helps us manage and cope.”

And helps keep our hearts healthy.

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I remember being handed a white coat during my first year of medical school. It came crisply folded in a cellophane bag. I was told to wear it anytime we were in the hospital or with patients as a sign of respect.

There was no pomp about it. I took it home and tried it on. It was like putting on a costume and pretending to play doctor. The white coat continued to feel that way to me for a long time.

Over the years, the costume has become second nature and part of my clinical identity. I slip it on when I’m seeing patients, because when I’ve asked, most of them tell me they prefer it. The coat provides a mutual comfort to us both.

My, how times have changed. Now the vast majority of the nation’s medical schools (along with more than 700 nursing schools and physician assistant programs) host special white coat ceremonies, in which new students are welcomed into their profession with a solemn ceremony invoking commitment to the healing arts. White coats are formally offered to students, and put on them by their school’s leadership.

These ceremonies present an opportunity for the students and their families to mark the beginning of health careers in an educational and professional crucible that will challenge their ideals, empathy and compassion. “The iconography, the ritual of holding up members of the profession in this time of change must be maintained,” says Dr. Richard Levin, president and CEO of the Arnold P. Gold Foundation, whose mission is to promote and maintain humanism in health care.

Now in the role of medical educator myself, I find anything that helps students stay connected with their highest ideals valuable in imparting a sense of professionalism. That’s why it’s disconcerting to think that our white coats are being challenged as possible vectors of infection.

A group of doctors in the field of infectious diseases has begun to rally around a mantra of “bare below the elbows,” suggesting that health professionals avoid wearing white coats altogether, as is the custom in the U.K.

It turns out we don’t wash the things nearly enough.

In a piece titled “It’s Time for Doctors to Hang up their White Coats for Good,” Boston-based infectious diseases specialist Philip Lederer argues that white coats have outlived their usefulness, both as guardians of cleanliness and as symbols of the profession.

Studies demonstrate the presence of harmful bacteria on our white coats, though evidence of direct harm to patients is lacking.

“We don’t need a randomized trial to prove that parachutes save lives,” Lederer told me. He prefers wearing a short-sleeved shirt with a vest on top for pockets and warmth, a fashion trend he hopes will catch on. And while Lederer supports the idea of a humanism-themed ceremony to welcome students into the profession, he and others suggest that even as a symbol white coats are more of a barrier than a conduit to strong doctor-patient relationships.

Levin counters that with all of the changes in health care, people in the field feel a tremendous sense of dislocation. “The idea of taking away [professional status] rather than elevating it is a problem for health care,” he said. But taking away the coats wouldn’t necessarily be a blow, he said, pointing to a study that challenges the notion that white coats are fundamentally elitist.

The debate over white coats has forced me to consider my own practice. In the end, I think the issue is as much about generational change as it is about infection control. I’d give up my white coat instantly if I knew it was spreading harmful bacteria. But colonization with bacteria is different from transmitting them to another person.

Bacteria live on all of us, so are white coats necessarily worse than our other garments or even our own skin?

It’s likely that this debate will continue, unless patients were to somehow come to consensus on what they want doctors to wear. And that’s not likely to happen anytime soon.

Until then, I vow to wash my white coat more frequently.

John Henning Schumann is a writer and doctor in Tulsa, Okla. He serves as president of the University of Oklahoma, Tulsa. He also hosts Public Radio Tulsa’s Medical Matters. He’s on Twitter: @GlassHospital

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In recent days, presidential candidates and even the American Medical Association have griped about rising drug prices, pointing to brand-name blockbusters with splashy ad campaigns.

When it comes to patient satisfaction, however, there isn’t much difference between brands and generics, according to data collected by the website Iodine, which is building a repository of user reviews on drugs.

ProPublica has teamed up with Iodine, which launched last year, to add data from reviews to our Prescriber Checkup tool, which allows users to see their doctors’ prescribing habits in the Medicare Part D program and compare them with others in the same specialty and state. Our drug pages (take, for example, the antipsychotic Abilify) will now include consumers’ user reviews, usage statistics by state and a listing of the top prescribers in the country.

“What is it actually like to take these medications?” asked Thomas Goetz, Iodine’s co-founder and chief executive. “That is the nub of what we’re trying to measure…The fact that a drug is a brand drug or a generic drug, for us, is immaterial to the patient experience.”

ProPublica compared the reviews of brands and generics in three drug categories: antipsychotic medications that treat schizophrenia, antidepressants, and drugs that lower cholesterol. Iodine asks people if a drug is worth it, whether it’s a hassle to take and if it works well. For each category of drug, a generic scored best on each of the three questions.

Dr. Joseph Ross, an associate professor of medicine and a health policy researcher at Yale University School of Medicine, said he wasn’t surprised that patient reviews of generic and brand-name medications were similar.

“Generic medications are manufactured to be equivalent in all ways (except appearances) to brand-name medications,” he said in an email. “Unfortunately, many patients and physicians are convinced to spend more and use the brand-name medication by marketing initiatives, including advertisements on the television or drug coupons that promise similar out-of-pocket expenses for the higher-cost brand-name medications.”

Consider antidepressants. Most drugs in the class, including Prozac, Celexa and Zoloft, are now available as generics and cost under $20 for 30 pills at Costco. By comparison, the brand-name drug Pristiq, manufactured by Pfizer, has a cash price of about $283 for 30 pills. (Those with insurance pay less, but probably still more than for a generic.) Pristiq fares worse in satisfaction than many of the cheaper alternatives.

Pfizer spokesman MacKay Jimeson said that depression manifests itself differently in different people, meaning treatment effectiveness may vary, too.

“Patients should work with their doctors to determine whether to use an antidepressant and, if so, which type of medication might be best for them,” he said in an email. “Any treatment of depression or anxiety disorders, whether it’s medication or otherwise, must be monitored carefully by a qualified health care professional.”

A similar phenomenon plays out for cholesterol-lowering drugs, known as statins. Zocor and Lipitor are now available as generics and are inexpensive. The drug Crestor, made by AstraZeneca, continues to have patent protection and costs more than $230 for 30 pills at Costco. (Again, insurance discounts would lower that price.) Crestor’s user satisfaction score was about the same as the generic alternatives.

AstraZeneca spokeswoman Michele Meixell said not all statins are alike. “The efficacy and safety of Crestor has been studied in more than 120 ongoing [or] completed trials and more than 67,000 patients worldwide over the past 13 years,” she said in an e-mail. “Crestor is one of the two high intensity statins available and AstraZeneca believes it’s a clinically important option for many patients, who are unable to reach their cholesterol goal with diet and exercise alone.”

Both Pfizer and AstraZeneca noted that patients can receive discounts from the company.

Some drugs have many more Iodine reviews than others, which may affect the results. All told, Goetz said Iodine has reviews from more than 100,000 Americans covering the approximately 500 drugs in its database.

Goetz said he doesn’t know why generics sometimes have higher satisfaction than brand-name drugs, but he offered one theory. “People might have outsize expectations for what a heavily marketed drug is going to do for them,” he said. “They may watch the commercials and think that any given drug is going to be the answer to all their problems. And the reality of medicine and the reality of pharmacology is that every drug has some benefits for some people and some side effects for some people, and that’s the whole balance.”

Generics may have another advantage over newly launched drugs in the same class. By definition, a generic has been on the market a long time, so doctors know how it works, and any major problems or side effects would have already surfaced. By comparison, the studies that help brand-name drugs win approval may not have picked up safety problems or side effects that, while uncommon, can represent an issue once a medicine is taken widely.

Questions about cost and quality are likely to intensify. This week, the AMA called for a ban on direct-to-consumer advertising of drugs and medical devices. AMA board chair-elect Patrice A. Harris cited “concerns among physicians about the negative impact of commercially-driven promotions, and the role that marketing costs play in fueling escalating drug prices.”

Ross, the Yale researcher, said eventually the costs of brand-name medications “will catch up with us, either in the form of higher out-of-pocket payments once the coupons run out or higher health insurance premium costs.”

And, he added, “just because something is more expensive in health care does not mean it works better or is safer.”

Charles Ornstein is a senior reporter at ProPublica, an independent nonprofit newsroom.

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UnitedHealth Group, the nation’s largest health insurance company, says it’s considering dropping out of the public exchanges that are an integral part of the Affordable Care Act, because it’s losing money on them.

“We cannot sustain these losses,” CEO Stephen Hemsley said in an investor call Thursday morning. “We can’t really subsidize a marketplace that doesn’t appear at the moment to be sustaining itself.”

The company also said it will “pull back” on marketing of the products it sells on the exchanges, while it decides what to do. It also said it was lowering its earnings forecast for the year as a whole.

UnitedHealth’s comments represent a sharp turnaround from just last month, when the company said it expected business in the exchanges to improve in 2016 and planned to expand into more exchanges.

The announcement comes at a time of increasing concern about the public exchanges, where customers shop for insurance policies, often receiving federal subsidies to do so.

Several nonprofit insurance cooperatives that were supposed to compete for customers on the exchanges have folded. Meanwhile, some big publicly traded insurance companies, including Anthem, Aetna, Cigna and Humana, say they are enrolling fewer people than expected or even losing money.

A recent report by McKinsey & Co. found that the industry lost a total of $2.5 billion, or $163 per customer, in the individual market.

Insurance companies have had trouble attracting healthy customers to the exchanges to purchase their insurance products, many of which have deductibles of thousands of dollars.

The industry’s troubles are reflected in the insurance products being offered on the exchanges during the current enrollment period, reports The Wall Street Journal:

“For these plans, which will take effect in 2016, many insurers have raised premiums in order to cover the medical costs of enrollees, which have run higher than many companies originally projected, fueling this year’s losses. Insurers have also shifted to offering more limited choices of health-care providers”

Still, no other big insurer has signaled its intention to leave the exchanges.

Aetna Inc. CEO Mark Bertolini said last month that it was “way too early to call it quits.”

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Talk about targeted. Consumers scrolling through the health plan options on the insurance marketplaces in a few states this fall may come upon plans whose name — Leap Diabetes Plans — leaves no doubt about who should apply.

Offered by Aetna in four regions, the gold-level plans are tailored for the needs of people with diabetes. They feature $10 copays for the specialists diabetes patients need such as endocrinologists, ophthalmologists and podiatrists, and offer free blood sugar test strips, glucose monitors and other diabetic supplies. A care management program with online tools and coaching helps people manage their condition day-to-day.

The plans also offer financial incentives, including a $50 gift card for getting an A1C blood test twice a year to measure blood sugar and a $25 card for hooking up a glucometer or biometric tracker to the Aetna site.

“It was a good time to design a product that was a little more personalized, as opposed to generic,” says Jeff Brown, vice president of consumer product, network and distribution at Aetna. “We saw diabetes as a compelling need, and a growing need.”

Aetna is debuting the diabetes plans, effective next year, in four markets: Charlotte, N.C., Phoenix, Ariz., Northern Virginia and southeastern Pennsylvania. The coverage is part of a new Aetna line called leap plans, aimed at helping the insurer build its retail business. The company says the plans are simpler to use than traditional plans and will have more personal customer service.

It’s unclear whether the diabetes plans are a good buy for people with diabetes. The cut rates for specialist visits only apply if they’re related to diabetes care, not for other conditions someone may have.

Meanwhile, coverage for medications, which may cost consumers hundreds of dollars every month, is no different in the diabetes plans than in other gold plans.

In Arlington, Va., for example, the Aetna Innovation Health Leap Gold Diabetes plan with a $3,500 deductible for an individual has an estimated monthly sticker price of $379. Specialist visits not related to diabetes cost $100, preferred brand-name drugs $50 and the out-of-pocket maximum is $3,500.

Is that a better buy than the $371 Kaiser Permanente gold plan with a zero deductible and $6,350 out-of-pocket maximum, where all specialist visits are $40 and preferred brand-name drugs cost $30? That will depend on the individual. (Kaiser Health News, an independent service of the nonprofit Kaiser Family Foundation, isn’t affiliated with the health insurance company Kaiser Permanente.)

“The American Diabetes Association encourages individuals with diabetes shopping for a health insurance plan to ask if the plan covers the diabetes supplies, services and particular medications they need and look at all costs including the premium, deductibles and copayments or coinsurance in deciding what plan has the most favorable coverage,” ADA spokesman Samantha Boyd said in an email.

Premiums for the diabetes plans generally fall in the middle range of gold plans in an area, except in Phoenix, where they’re among the most expensive of the 20 plans available.

Gold plans pay 80 percent of medical expenses, on average, and the consumer pays 20 percent. Silver plans, the most popular plans on the marketplaces, pay 70 percent of medical bills. Most people receive subsidies that help reduce their premiums, but since subsidies are tied to silver-level plans they don’t have as much impact on gold plans.

People with diabetes are relatively expensive to insure. Per capita health care spending in 2013 on people with diabetes averaged $14,999, more than $10,000 higher than the $4,305 spent on people without diabetes, according to an analysis by the Health Care Cost Institute.

Brown says that in designing the plans they focused on helping people get better access to specialists.

“A big part of what we’re trying to do is to lower the financial barriers for seeing their care team,” he says, including primary care physicians and specialists.

Doesn’t he worry that Aetna will lose money offering plans that try to attract people with higher-than-average medical costs? Brown says it’s an experiment, and they don’t expect to make a lot of money.

Aetna wants to create a “long-term value proposition” with people, Brown says. “We’re not only hoping to have these people for 18 months.”

And for the record, you don’t have to have diabetes to sign up.

Kaiser Health News is an editorially independent news service supported by the nonpartisan Kaiser Family Foundation. Email questions: KHNHelp@KFF.org. Michelle Andrews is on Twitter: @mandrews110

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