‘Wallet Biopsies’ Strand Thousands in California Hospitals, CEO Says

It’s May 14, and Scripps Health in San Diego is the indefinite home for 85 patients who do not need to be there.

The patients—72 occupying medical beds and 13 occupying behavioral beds—are ready for discharge, according to their physicians. They require further care outside of the hospital, in settings better suited to long-term stays: skilled nursing facilities, behavioral health hospitals, halfway houses.

But no step-down facilities will take them in, so they wait in their hospital beds at an average cost of $1,912 per day.

Some will be there for months. Some will be there for years. In May, a patient discharged from Scripps Mercy Hospital San Diego after more than three years, the majority of which were not medically necessary.

Scripps calls these “avoidable bed day patients,” and now sees 34,891 of them annually—up 109 percent from three years ago. From April 2023 to April of this year, the health system spent $45,708,727 to care for them.

“This boarding issue, it’s a huge economic issue for us,” Chris Van Gorder, president and CEO of Scripps Health, told Newsweek. “It’s a patient care issue, but it’s also forcing us to make very difficult decisions about the services we can offer so that we can have enough beds to put the patients in.”

These patients are typically covered by Medi-Cal—California’s Medicaid program, which has not increased reimbursement rates with inflation, according to Van Gorder. Although it costs nearly $2,000 to board one patient for one day, Scripps only receives about $704.06 from Medi-Cal.

“We’re losing money every single day we care for these patients, and they’re complicated patients,” Van Gorder said. “Not only do they need nursing care, but some of the behavioral patients, of course, need full-time, 24-hour-a-day sitters to sit in the room, to watch the patient, to make sure that they don’t hurt themselves or hurt other people.”

Step-down facilities are also considering these extra costs, but unlike hospitals, they aren’t mandated by law to absorb them. Under the Emergency Medical Treatment and Active Labor Act (EMTALA), Medicare-participating hospitals must provide stabilizing treatment for any patient that presents to the emergency room, regardless of that patient’s ability to pay. Long-term and post-acute care facilities are not required to pick up where hospitals leave off.

“I hate to say it, but there’s wallet biopsies that they do,” Van Gorder said. “If they can fill their bed with a commercially insured patient with better reimbursement, they will fill that bed with those patients, and not Medi-Cal, which is extraordinarily low reimbursement, and sometimes even Medicare, which, at least in our case, does not pay the cost of care.”

Van Gorder believes regulations like EMTALA should be extended downstream to require post-acute facilities to accept more complicated, government-insured patients—an opinion he called “unpopular.”

But the greatest change would come from increased government reimbursement rates, Van Gorder said. Hospitals are stuck in a vicious cycle, losing too much money to invest in effective change. For example, patients must wait about three years for a bed in a state behavioral health hospital. Although the surrounding area has less than half the required amount of behavioral health beds, Scripps can’t afford to build more; its 36-bed inpatient behavioral unit loses $4 million a year due to low reimbursements.

Discharge delays have sizable effects beyond the budget, according to Melody Thomas, director for patient care at Scripps Mercy Hospitals in San Diego and Chula Vista, California. She leads case management and social services teams at the two facilities, which see a high volume of homeless patients—many with significant behavioral health needs and little to no familial support.

Sometimes, police bring patients to the hospital on an involuntary 72-hour hold, also known as a 5150. The situation can be distressing and lead patients to act violently toward health care workers. When step-down facilities hear that a patient is lashing out, they are unlikely to accept them—leading to longer wait times and festering frustrations.

Still, hospital staff members work hard to make the sterile rooms as homey as possible, ordering sensory toys and baby dolls to soothe stressed or confused patients. Multidisciplinary teams do what they can to improve patients’ quality of life and presentation as they advocate for a different level of care.

“We’ve gotten pretty creative,” Thomas said. “It’s a little challenging because we are an acute care setting. Even our physical therapists or occupational therapists, their training may have been at a skilled nursing or rehab facility, but that’s not their primary role.”

Emergency department wait times are already high due to discharge bottlenecks, but Van Gorder expects the issue to worsen with the implementation of California’s Senate Bill 43. Signed by Governor Gavin Newsom in 2023, the bill expands the criteria for a “gravely disabled” determination to include those with a severe substance use disorder, like chronic alcoholism—thus broadening the number of reasons that law enforcement can place someone under a 5150.

Van Gorder said the law is “clearly in reaction to homelessness,” as it allows police to move people with drug addictions off the streets. But they’ll be moving into emergency departments for at least three days, and likely longer as the hospital works to develop a discharge plan or conservatorship.

EDs are already past capacity with patients frequently boarding in the hallways or waiting room spaces. Scripps hospitals have been forced to declare “internal disaster” several times to temporarily halt new patient intakes for an hour or two, according to Van Gorder.

In preparation for January 2025, when Senate Bill 43 takes effect, Scripps shuttered maternity services at its Chula Vista hospital and transferred operations to San Diego. The decision was difficult, but it will free up beds for the expected wave of new patients, Van Gorder said.

“I’ve often said that acute care hospitals with emergency rooms are the end of the food chain,” Van Gorder said. “Nobody’s sitting there saying, ‘We’re going to pay you more to take care of these patients,’ but you have to take care of these patients. And there’s no other business, there’s no other health care provider that has that responsibility.”

Emergency departments have also been called the windows of their communities, reflecting an area’s social determinants of health. People will need to look closely at their hospitals—and themselves—as they consider the discharge delay dilemma, according to Thomas.

“[People often say,] ‘I don’t want low-income housing in my neighborhood or a mental health facility in my area,’ and I think that that’s the hardest for our teams to understand,” Thomas said. “Well then where? Because now they’re just hanging in our hospital and maybe you can’t get your surgery done. We don’t have a bed for you when you need one, which is our primary role as an acute care hospital.”