Closing Laguna Honda Hospital could be like dropping a bomb on San Francisco

Laguna Honda Hospital is a facility with a rich history of scandal and mismanagement. For it to now be facing an existential crisis over a series of comparatively minor violations feels a bit like Al Capone going to prison over tax evasion.

But Capone did indeed go to the slammer — you can buy the commemorative t-shirt at Pier 39. And, as mind-boggling as it may be, the 700-odd vulnerable patients here may be out on their ears before year’s end if the hospital fails to meet the latest terms imposed by the federal government. If Laguna Honda comes up short in a top-to-bottom recertification process, it could lose Medicare and Medi-Cal funding in four to six months’ time.

This would blow a roughly $20 million a month hole in the city’s budget and open up the real possibility of patients being transferred hundreds if not thousands of miles away — or, tragically, to the curb and immediate homelessness. A high percentage of Laguna Honda’s patients exhibit behaviors that would’ve led to them being screened out of almost any other nursing facility, and it’s unrealistic to expect beds to be found for them.

“They would probably have to soak up a bed at General Hospital until they ended up in jail, or a bed comes up in a locked facility for people who are criminally insane,” sums up Dr. Teresa Palmer, a geriatrician who worked at Laguna Honda from 1989 to 2004.

This assessment is as harsh as it sounds. The fate of both this city and its most vulnerable populations are not in a solid place right now.

Laguna Honda, seen in 1926. Photo courtesy of OpenSFHistory.org

You may have missed the existential crisis unfolding at this 156-year-old institution. It’s easy to. Laguna Honda shelters the people society is most eager to overlook: The frail elderly and — increasingly — mentally ill and/or drug-addicted younger patients. This is a combustible and counterintuitive mix, and plays no small role in the fix Laguna Honda now finds itself in.

“There are a huge number of men here between ages 50 and 70,” says Palmer. At most nursing homes, she continues, you’d be more likely to find “a majority of ladies in their 80s.”

Between 1999 and 2021, the percentage of women at Laguna Honda dropped from 56 percent to 37 percent.

The problems at Laguna Honda, like Hemingway’s description of bankruptcy, have come gradually then suddenly. As would bankruptcy, so to speak, if federal funding is yanked.

Laguna Honda was founded in 1866 as an almshouse for geriatric Gold Rush forty-niners. We could start this story then. Or we could start it in 1999, when voters approved a $299 million bond to “save” the hospital. Or in 2006, when a licensing survey noted that the younger, more ambulatory patients flowing into Laguna Honda were toting drugs, alcohol, loaded firearms, and abusing the elders — staff even futilely erected signs reading “no hitting.”

Or we could start in 2019, when Laguna Honda staff took demeaning, nude photos of incapacitated patients and doped them up with non-prescribed medication (the first of several lawsuits settled last year for $800,000).

Nursing Director: “Our team have exhausted most options in helping eliminate or minimize the contraband and illicit substances into the unit.” … (Resident 2) voluntarily handed the burnt aluminum foil, plastic pen body case burned on one end and a cigarette lighter that he’s holding. … Resident even stated “they know I’m doing this.”

California Department of Public Health Survey of Laguna Honda Hospital, March 28, 2022

But, instead, we’ll start in July 2021, when two of the younger, more ambulatory patients here purportedly wandered off campus, wandered back on with methamphetamine and fentanyl, and suffered non-fatal overdoses.

The hospital reported the overdoses to regulators — to not do so would be unthinkable following the 2019 scandals that led to $780,000 in fines and a slew of lawsuits. And this triggered a concatenation of regulatory procedures that led to where we are today and put the hospital at the brink.

Laguna Honda, on multiple subsequent occasions, did not meet inspectors’ expectations on its “termination revisit survey.” In April, inspectors found 27 different violations. Some of these were not insignificant — incomplete patient assessments or staff wearing improper or inadequate PPE around patients. Other assessments seemed to be more of the ticky-tack variety: medicated shampoo without a prescription, medicated creams and lotions in patient rooms, “three open plastic bags were hanging (unattended) in a dirty hamper.”

These are the infractions that triggered the feds to last month broach the possibility of yanking funding. Laguna Honda announced this month that it now must go through the rigmarole of working to demonstrate that it could relocate all of its residents as a condition to continue receiving government funding. It will receive that funding while it works to recertify and avoid relocating anyone. It’s a Kafkaesque turn of events. Laguna Honda has so much to answer for going back through the years — but it’s the medicated shampoo et al. that was noted on this most recent report.

Adding to the surreal nature of these proceedings, the federal agency currently calling the shots, the Centers for Medicare & Medicaid Services (CMS), is responsible for overseeing all the truly horrific, for-profit, deathtrap nursing homes you saw on 60 minutes. There is no universe in which Laguna Honda compares to these charnel houses, and the overseers’ monomaniacal focus on this public hospital is hard to explain. As is any “solution” that might result in the dispersal of its residents.

Laguna Honda Hospital. Photo by Christopher Michel.

“I don’t know why they are being so harsh,” says Dr. Derek Kerr, a 21-year physician at Laguna Honda who has since turned into a whistleblower and critic of the facility. “Laguna Honda is always judged harshly. If you have one violation in a 700-bed unit that is as bad as one violation in a 15-bed nursing home. They don’t take into account the denominator.”

And while 27 violations sounds like a lot, says Charlene Harrington, a professor emeritus at UC San Francisco, Laguna Honda is seven times the size of an average nursing home facility. And, she continues, the average number of violations recorded on such an inspection is eight — meaning Laguna Honda had about half what you’d expect, per capita.

“California has had extremely poor enforcement of nursing homes, and has some of the worst nursing homes in the country. And that has gone on for years,” says Harrington. “Laguna Honda had some deficiencies, and I am not excusing the deficiencies. But the [overseers’] behavior in this case is inexplicable. They have let other facilities go for years … awful, for-profit facilities where really terrible things are going on.”

Multiple emails to CMS officials have not yet been returned.

Harrington has studied nursing homes and regulation for 40 years. And she is at a loss to explain what is going on here: “I can’t think of any case like this before.”

Laguna Honda in 1875. Photo courtesy of OpenSFHistory.org

There is nothing like a threat from outside to cement allegiances inside. So, at noon on Wednesday, Mayor London Breed and the SEIU 1021 — who maintain a Ralph Wolf-and-Sam Sheepdog relationship — will both appear at a rally to save this hospital.

Government officials across San Francisco described CMS as rigid and intractable. Former California Attorney General Xavier Becerra is now the head of the Department of Health and Human Services, which runs CMS. But, city officials say, he may be trying extra hard not to be seen as playing favorites.

CMS, city officials say, intransigently insists that its procedures are proscribed and must be done by the book, come what may. And you know the mayor’s office has been bending their ears, as has the office of Rep. Nancy Pelosi — and, if need be, every California politician there is will join the queue.

What a predicament: At last San Francisco has run into a situation in which it can’t just have his political mommy and daddy make some calls and get it out of his longstanding ineptitude. The process, at least thus far, seems to be politically impenetrable. How unfortunate, then, that this appears to be a process devoid of common sense or empathy in which, ostensibly for the patients’ own safety, hundreds of them may be jettisoned to parts unknown or pushed to the street.

That’s just plain stupid.

Maybe that will come up at the rally tomorrow. It’s doubtful, however, the city officials will examine their own role in this fine mess. But we can. So let’s go back to that bond measure in 1999.

“Laguna Honda had some deficiencies, and I am not excusing the deficiencies. But the [overseers’] behavior in this case is inexplicable. They have let other facilities go for years … awful, for-profit facilities where really terrible things are going on.”

Charlene Harrington, UCSF professor emeritus

Voters, you may recall, agreed to go into $299 million in bonded debt to build a new, 1,200-bed facility. They were promised that this would house the city’s frail elders.

But that didn’t happen. The price tag ballooned by hundreds of millions of dollars and the capacity of the hospital was reduced by hundreds of beds. And, top it off, the city began transferring younger, mentally ill and/or substance addicted patients into the hospital.

So yes, we paid more, got less, and the hospital is not exclusively serving the elderly population that voters were enticed to pony up and help.

As noted earlier, this situation is longstanding. By 2004, Palmer left Laguna Honda, in large part because she felt the influx of “out-of-control” mentally ill and/or substance abuse addicts was unsafe. “They are deforming the hospital to accommodate an antisocial minority,” says Kerr, who was forced out in 2010.

There is no scenario in which crippling and defunding Laguna Honda and ejecting its patients is in anybody’s best interests — and, Palmer still describes it as “a better nursing home than most” and a place where she would’ve put her own mother.

The city must do all it can to fend off this doomsday scenario, and a consulting firm with an expertise in re-certification has already been hired.

But the city must also address the untenable situation of commingling the frail elderly and ambulatory mentally ill and/or addicts. In 1999, you’ll recall, 56 percent of Laguna Honda’s residents were female — and the average age was 76. By 2021, only 37 percent of the residents were women. And while patients’ average age wasn’t disclosed in ’21, it had dropped to 64 by 2013.

A state Department of Public Health survey from March, 2022 obtained by Kerr and shared with Mission Local notes staff observing residents overtly smoking drugs off aluminum foil and seeing little they could do to prevent this.

“Our team have exhausted most options in helping eliminate or minimize the contraband and illicit substances,” a nursing director is quoted as saying. The patient in question surrendered his burnt aluminum foil, plastic pen and lighter. “They know I’m doing this,” he said.

This city has chosen to serve populations nobody else would. But it has chosen to do so in a manner that has proven to be unworkable and led to the current crisis.

San Francisco owes it to itself and Laguna Honda’s residents to solve this crisis. But also to ponder its own role in it. And make things right. Gradually then suddenly.