NEW VALLEY 107
The Heartbeat of Healthcare

This program is brought to you through the generous support of viewers like you.

Presentation of New Valley is made possible by Intel Cooperation. Taking a leadership role in bringing citizens, business and government together, to examine the impact of growth in the Central Valley.

And by U.S. Home, committed to developing a positive future where we live and work by promoting responsible growth, and preservation of our quality of life.

And by the air districts of the Sacramento and San Joaquin Valleys.

When we talk about healthcare in the Central Valley, we first must ask: which Valley are we referring to?

Is it the Valley known for biological breakthroughs and high tech-innovation, where cutting-edge companies compete, and renowned medical centers flourish?

Or is it that other Valley…of isolated communities fighting for access to specialized medicine? A Valley facing grave shortages of nurses and pharmacists, with rates of uninsured significantly higher than the national average…

As we take the pulse of healthcare in the Valley, will we find it quickening in anticipation of the next medical marvel…or fading from the strain of too much demand on too few resources?

We hope you'll join us for the next half hour, as New Valley monitors "The Heartbeat of Healthcare."


Entering the realm of healthcare in the Central Valley in many respects is like snaking through a carnival fun house, but without the fun. A myriad of issues jump out at anyone who enters the healthcare labyrinth. Keeping our aging population in good health is costly.

Denny Martin, President/CEO, CAPH: "So we have our healthcare costs escalating from all different sources -- technology, drugs, workforce issues -- at the same time we have high numbers of uninsured, and the same time we have revenue sources, particularly from the government going down."

Sen. Jackie Speier, (D) San Francisco/San Mateo: "We now as a result of this last budget that we just passed and the governor signed have committed all of the tobacco tax settlement dollars for the next 25 years to try and get us through this year of fiscal crisis. So all those dollars that heretofore were contemplating being used for health care initiatives, has just been wiped out, like, poof!"

Poof! As government assistance disappears, technology and drug development costs explode.

John Gallapaga, Health Issues Specialist, AAP: "100,000 die every year from the inappropriate use of medicines. And the thing that disturbs me too is it puts a $177 billion deficit on our healthcare."

Robert Erwin, CEO, Large Scale Biology Corp.: "I think that personalized medicine -- or personalizing medicine -- is the key to improving the effectiveness of medicine, but it cannot be done outside the context of concern for cost."

Personalizing medical care while developing space age technologies to administer it may seem contradictory. Especially when it relates to rural care.

Dr. Dennis Galvon, Chief of Staff, Glenn Medical Center: "Hospitalization, state of the art medical care, obstetrical deliveries, those have been usurped by larger technically and technologically advanced hospitals."

A quote attributed to Henry Simmons of the National Coalition on Health Care sums up a bleak prognosis on healthcare: "We have a broken system in cost, coverage, and quality, and you can't patch it anymore."


Steve Ebert, Director, San Joaquin General Hospital: "On a daily basis, we see an average of about a 120 patients a day. And of that 120, about 30 to 40% are with out health insurance."

This is San Joaquin Valley Hospital, one of the few public hospitals in the Central Valley. Here, a heavy patient load is the norm.

Nurse: "He's here today complaining of shortness of breath. He said he's had it for a couple of months."

Like most hospital emergency rooms, this one appears to be in a constant state of chaos.

Steve Ebert: "I think our volume in the emergency room has increased about 20% over the past three years, and one of the challenges we've had to deal with is how to move those individuals who don't need emergency care into a less expensive, more patient-friendly environment."

As a public institution, San Joaquin Valley hospital has an open door policy. Anyone in need of medical care receives it, regardless of their ability to pay. That can be costly if the patient doesn't have insurance -- like Kenny Dugan who came into the ER with a back injury.

Kenny Dugan, Uninsured Patient: "It's hard to buy health insurance for one person, period. I mean, the system sucks with the way it's set up."

Nurse: "He's complaining of pain around his L5, L6 area, from lifting some stairs yesterday."

Kenny Dugan: "I am unemployed at the moment. I was laid off. I had insurance then and now I don't have it."

Doctor Buys, San Joaquin General Hospital: "He's got some sclerosis there, and a lot of just minor osteo-arthritic problems, but nothing really acute that we need to deal with."

Nurse: "So, I'm glad to see you're feeling better, sitting up. I had Doctor Buys take a double check with me on those x-rays, and we both concluded there's nothing wrong."

It's visits like this that often tie up the emergency room.

Denny Martin, President/CEO, CAPH: "The crisis of the uninsured has reached such a magnitude that it's going to start impacting the insured as well."

Denny Martin heads the California Association of Public Hospitals and Health Systems.

Denny Martin: "And I think as people get laid off, they lose their health insurance benefits, where do they go? They go to the emergency room. The emergency rooms are starting to get clogged up. When the emergency rooms get clogged up, and you're in that ambulance, it doesn't matter if you're insured or uninsured in that ambulance, you're as every bit at risk as the uninsured are."

According to the UCLA Center for Health Policy Research, nearly 6.8 million people in California are without healthcare insurance. In the Central Valley, that breaks down to about one in five residents. The rate of uninsured broken down by county is closely linked to the income levels and employment status.

Denny Martin: "And quite frankly, the epicenter of this crisis right now is not in the Central Valley, but in Los Angeles."

But Martin estimates the Central Valley is only 6 to 12 months behind Los Angeles.

Denny Martin: "One in 3 people in the county of Los Angeles don't have healthcare insurance. The county of Los Angeles is right now debating the closures of several major traumas and emergency centers in the public sector. That's going to have an enormous impact on every single person who lives in Los Angeles. That will certainly trickle into the Central Valley eventually."

Martin says skyrocketing healthcare costs, escalating insurance premiums, rising unemployment, and a bad economy are to blame for the growing number of uninsured.

Denny Martin: "Eighty percent of the people of California who don't have insurance are either workers or they're families. They are working in low-wage jobs that don't offer health insurance benefits, or if they do offer benefits, the premiums are so high that they simply can't afford it."

One solution to the problem is community clinics like this one in Sacramento.

Carmella Castellano, CEO, California Primary Care Association: "We provide care to working families. So we are a place to bring your children when they are sick, before it gets to the point where they need to be taken to the emergency room."

This is Daniel Via Sanchez's first clinic appointment for his daughter Rosalinda. It's time for her immunization shots.

Daniel Via Sanchez: "It gets me what I need to do and gets me back on the road real quick. It's fast and it's easy. You know, helps my daughter, you know, to come down here."

Carmella Castellano: "Over half of clinic patients statewide are Latino, and over 80% are people of color and they are mostly at very low-income population. They are either on Medi-Cal, other government programs, or uninsured with no source to pay for their healthcare."

Programs like Healthy Families provide free medical care for children.

Denny Martin: "I think our state is doing a pretty good job in being sure that kids, at least, in California have access to health insurance."

Peggy Frazer, Patient, Las Palmas Community Clinic: "Basically I'm here today to get his last Hepatitis shot."

Peggy Frazer has been coming to the Las Palmas clinic for the last 12 years. Frazer says financially it's the only way she can manage her family's health situation.

Peggy Frazer: "Even when you do pay cash it was very minor compared to what it could have been if I went to a hospital."

While this clinic remains open now, healthcare workers say they're concerned about its future.

Nina Vasiliev, Physician Assistant, Health For All: "We are busting at the seams, and it's nice to know that we're helping the community. It's a little frightening knowing that we're not reaching everybody that we could."

Resolving the issues surrounding healthcare for the uninsured may seem impossible. Healthcare professionals like Denny Martin say it's not.

Denny Martin: "I think people in California need to demand from their elected officials… that healthcare needs to be front and center as an issue, as a campaign issue, so that everybody shares in the solution to this problem."


Willows, California is a sleepy little town with a big reputation: "Rice Capital of the World." It's the kind of town that conjures up thoughts of an earlier age. Traffic jams are unheard of.

Life is simple -- or so it seems. Simplicity disappears for residents of Willows when it comes to getting adequate medical care. The town in rural Glenn County is a symbol of what's occurring in small communities throughout California. They are in danger of losing their only hospital.

Denny Bungarz, Glenn County Supervisor: "Our consultant kind of used the analogy that we are a patient on life support."

And the plug almost got pulled. Enloe Medical Center in Chico, which operates Glenn, announced in early 2002 that within weeks it would severely reduce services for financial reasons. The announcement shocked residents -- and Willows Memorial Auditorium was the scene of a heated public meeting.

Citizen at meeting: "And my mother, who's here with me tonight, would not be here tonight if it wasn't for the emergency room..."

Like those who testified at the hearing, Angela Parisio says that if it weren't for Glenn Medical, she wouldn't be here today.

Angela Parisio, Patient: "Well, it was my son's second birthday, and we were having a party for him. I wasn't feeling well, and I collapsed. They took me to Glenn Medical Center and they were able to save me."

The 37-year old Parisio said Glenn was able to stabilize her enough to be life-flighted to UC Davis Medical center.

Judith Brown: "He's got something big going tonight..."

Judith Brown has a history of heart problems. She also has a history of Glenn Medical Center coming to her rescue more than once.

Judith Brown, Patient: "They did stabilize me. They did everything they could for me here. They put external pacemakers on, and called for flight care. In the meantime, they consoled me."

Patients like Brown aren't the only ones afraid of losing medical services. County Supervisor Denny Bungarz says he's making it his mission to keep the hospital open because of what it means to the County.

Denny Bungarz: "Well, I think a hospital is a very important part of any rural area. It's the centerpiece. Without the hospital, the economy and the whole area has a tough time making it."

But Enloe officials say they've has a tough time breaking even since taking over the long-struggling Glenn Medical in 1995. They blame it on factors that are out of their control.

Jan Ellis, VP Ambulatory Care, Enloe Medical Center: "Poor reimbursement. You know, we have a lot of unfunded patients that use healthcare services. It's hard to recruit and retain the staff that you need, and hospital equipment is very expensive."

Glenn Medical Center opened in 1950, and today remains the only hospital in Glenn County. It also provides the only 24-hour emergency services on heavily traveled Interstate 5 between Redding and Woodland. Patients are often stabilized at Glenn before being airlifted to other hospitals, including Chico's Enloe -- a 45-minute drive away.

In addition to the emergency services, the hospital offers a family care clinic, a lab, and x-ray. Chief of Staff Dr. Dennis Galvon says that despite the services Glenn provides, small hospitals have become obsolete.

Dr. Dennis Galvon, Chief of Staff, Glenn Medical Center: "Hospitalization, state of the art medical care, obstetrical deliveries...those have been usurped by larger technically- and technologically-advanced hospitals."

Galvon adds that today's medical advancements keep people out of the hospital, and more services are provided on an outpatient basis. Glenn Medical isn't the only rural hospital on the critical list. More than 20 percent of them have either closed or filed bankruptcy in the last three years, according to the California Healthcare Association.

Sharon Avery, Executive Director of the Rural Healthcare Center, says small hospitals see more than their share of Medi-Cal patients, which contribute to the financial burden.

Sharon Avery, Executive Director, Rural Healthcare Center: "The rural hospitals have to meet all the laws and regulations that a large hospital does, so the set price of delivering services is pretty high, while the volume to spread that cost is pretty low."

What about the future of rural hospitals like Glenn? Residents have said loud and clear that they want their emergency room to be there when they need it.

Angela Parisio: "I don't want to see my neighbors and family members and people dying because we don't have a way to stabilize them in order to get them the treatment that they need."

Enloe Medical Center and Glenn County officials are working on an agreement to keep the Medical center open in the short term. At the same time, they are deciding what level of care to provide in the future, and in what kind of facility. These are issues that all rural hospitals are grappling with. In the long run, it will take a partnership of local communities, as well as state and federal policymakers, to find the solutions.


The growing crisis in healthcare costs has its genesis in part in the research and development of new and innovative medical technologies. Information technologies and biological entities are converging to search out new discoveries in genomics, therapeutic cloning and stem cell research; disciplines plowing new ground in ways to combat disease.

According to the California Healthcare Institute, Northern California has become "the global leader in biomedical technology." Driving much of that success is an apparent seamless cooperation between academic institutions, industry, governments and sources of investment.

Martina McGloughlin, Director, UC Systemwide Biotech Research: "One of the biggest implications of course right now is the work that is coming out of the human genome project that has a major impact on the type of research that is being done throughout the UC system and of course very specifically in Davis. We are undertaking a major initiative by developing a genome center. We can take something all the way from basic nutrition research to very specific clinical applications so we're looking at everything from the prevention of disease. All the way to other types of preventative medicines to then developing therapeutics to treat specific diseases and of course developing diagnostics systems to determine what these diseases are."

The north state has more than 800-biomedical companies generating upwards of 4.1 billion dollars in revenues, worldwide. More than 85,000 employees in the Bay Area, Sacramento and Santa Rosa make up the workforce. Bringing just one pharmaceutical to the public is an expensive and time-consuming proposition.

Martina McGloughlin: "If you look at the success rate of getting a candidate product to a final commercial product that is going to make money on the market, it takes up to thirteen years and potentially longer and $800 million."

Robert Erwin, CEO, Large Scale Biology Corp.: "When we started this company the figure was $150 million and the basis for the $800 million estimate includes failures of products that reach late stage clinical trials and then do not make it through FDA. So if you count the failures with the successes it probably is $800 million."

Large Scale Biology Corporation is a relatively small-scale company of 130 employees doing plant research to develop pharmaceuticals. They just cleared their first clinical trials on developing a drug to battle cancer. Ironically the plant of choice was...tobacco.

Robert Erwin: "Some people call it the white mouse of plant biology. Tobacco is also the host for one of the first studied viruses, the tobacco mosaic virus, With our technology we use plant viruses as gene delivery vehicles. They introduce a gene, a human gene for example, into a green plant, tobacco for example, to produce a therapeutic product such as our vaccine for non-Hodgkin's lymphoma."

Barry Holtz, Senior VP, Large Scale Biology Corp.: "The constraints on our healthcare system are well known to everybody at this point, it affects literally all of us. So the ability to rapidly make new drugs to address diseases and to make them at a cost that people can afford, and we can get them distributed, and thirdly to make drugs for third world countries where epidemics are rampant."

In the bioengineering labs of UC Davis, Katherine Ferrara is working to expand a technology that calls for the injection of bubbles smaller than a human hair into tiny arteries and tracking them with ultrasound.

Katherine Ferrara, Chair, Biomedical Engineering, UC Davis: "We can hear an individual bubble that's on the order of a few microns as it moves through the microcirculation so we can at a very low concentration hear these tiny little events as they occur. We're actually looking at blood flow within tiny little blood vessels. So what we want to do is to assess the health of the microvasculature. This could be applicable to diabetes it could be applicable for wound healing, it could be applicable to cancer."

Using a high speed camera and a microscope they can actually document the reactions of the small spheres to ultrasonic bursts.

Paul Dayton, Asst. Research Professor, UC Davis: "We look for things like how easy it is to destroy a bubble with a pulse of ultrasound. And by destroying bubbles we can do things like deliver drugs. So, we have a bubble which we can inject into the body and then break at a certain site. You can deliver the therapy directly to the site with ultrasound."

According to the University of California at Davis, there are upwards of 500 drug products and vaccines currently in human clinical trials and hundreds more in early development. They target scores of diseases ranging from cancer to Alzheimer's to AIDS and technologies and research techniques are developing at a rapid pace.

Barry Holtz: "You know, we couldn't dream of making a personalized vaccine for a lymphoma cancer patient a decade ago. We just did not have the tools to do that."

Now that we have the tools that make the medicines to fight diseases, the dilemma remains over how to pay for them.


According to Fortune magazine, the number one most profitable business in America -- more than commercial banks and diversified financials -- is the pharmaceutical industry. But what's good for investors isn't necessarily good for consumers -- particularly seniors.

John Gallapaga, Health Issues Specialist, AARP: "The pharmaceutical companies should have come out and said, 'You know what? There's a problem out there. Let's help them.' But I never heard it. I never heard it. And that hurt me, being in that industry..."

John Gallapaga worked in pharmaceuticals for 40 years -- first as a selesman, then as a lobbyist.

John Gallapaga: "They have never wanted to recognize the fact that many prescription drugs are costly."

And those costs are expected to rise by 11 to 18 percent this year. Even if there's no hope in sight at the federal level, California seniors have gotten some relief. Senate Bill 393 passes on state-negotiated drug discounts to all Medicare patients.

Sen. Jackie Speier, (D) San Francisco/San Mateo: "All the senior has to do is show their Medicare card at their pharmacy and ask for the senior discount."

Senator Jackie Speier sponsored that bill, and cites runaway advertising as a major cause of skyrocketing drug prices -- a charge the pharmaceutical industry refutes.

Robert Erwin, CEO, Large Scale Biology Corp.: "I don't think that advertising and marketing is anything close to a major proportion of the cost. The research, the development, the manufacturing, the distribution, the process of dealing with the weekly regulatory compliance issues, assuring quality and safety -- those are very expensive operations."

But Senator Speier sees it differently.

Sen. Jackie Speier: "A good 50% of the R&D dollars come from you and I, as taxpayers, to the National Institute of Health. They spend less on R&D than they do on their various forms of marketing."

Dr. Richard Kravitz co-authored a recent study on the way drug companies market their products in print.

Dr. Richard Kravitz, Director, UC Davis Health Care Research Center: "They're very good at giving the name of the drug, and even the condition for which it's directed, and then providing a pretty picture of people engaged in the enjoyment of life -- presumably on the basis of having taken that prescription. But they're not so good at telling how the drug works, what its probability of effectiveness is, and especially what the alternatives to that specific drug are."

But such findings don't seem to have affected the industry's commitment to advertising...

Dr. Richard Kravitz: "It is projected that by 2005, drug companies will spend $7.5 billion on direct-to-consumer advertising alone. And DTC advertising really only comprises at most 20% of a company's total advertising budget."

Where does the rest of the money go? Most of it is used to market drugs directly to doctors and pharmacies.

Judi Delameter, Outpatient Pharmacy Supervisor: "We had one drug company that brought us lunch today to kind of get us thinking about their product."

But Delameter is quick to point out that such perks are only a small piece of the pie provided by the drug companies.

Judi Delameter: "Many of them have Patient Assistance programs. We provide financial information from the patient to the drug companies, and they're able to send us drugs at a lower cost."

But for those who don't qualify for these programs, the cost of prescription drugs remains the most troubling line on their healthcare bills.

Judi Delameter: "A lot of patients say, 'Oh, wow, that's really expensive.' And we're just passing on the costs that the drug companies are charging us."


So we end as we began: at San Joaquin General Hospital, with doctors and nurses on the front line of the healthcare battle. When a life is at stake, they don't dare take their eyes off the patient. But the rest of us can't afford to look away from the growing crises in staffing, resources, and funding. We've saved countless lives through our scientific innovation. Now, more than ever, we must apply that same ingenuity to save a healthcare system whose vital signs are fading.

But are we creating more work for ourselves? In our drive for larger, more robust cities, are we neglecting the health of the environment on which we rely? In our next episode, we'll focus on the water we drink, the air we breathe, and the energy it takes to keep the Valley thriving. Will we use our natural resources to create a Refuge…or Ruin?

The topics discussed in this series concern all of us, and we welcome you to join the debate. Log on to our website at newvalley.org, and send us your comments via e-mail at newvalley@kvie.org.


Additional support provided by a grant from the Great Valley Center.


To order a copy of this program for $14.95, call 888-814-3923. Or visit us online at www.kvie.org.

This program is brought to you through the generous support of viewers like you.

Presentation of New Valley is made possible by Intel Corporation -- taking a leadership role in bringing citizens, business and government together, to examine the impact of growth in the Central Valley.

And by U.S. Home, committed to developing a positive future where we live and work by promoting responsible growth, and preservation of our quality of life.

And by the air districts of the Sacramento and San Joaquin Valleys.