Swedish Medical Center's Board of Trustees has voted to close the 30-bed Transitional Care Unit (TCU) at its Ballard campus to help quell an annual company loss of about $5 million for the last several years.

In 1999, after Medicare switched skilled nursing units from a cost-based formula to a prospective payment plan, which calculates reimbursements on an individual patient care level rather than an annual average cost formula, the Swedish-Ballard TCU quickly began to lose millions in Medicare reimbursements, said Michael Richerson, director of post acute care services for Swedish.

The decision is part of the hospital's recommendation to move Ballard's services away from a full service acute-care inpatient hospital to a "comprehensive ambulatory center with low intensity inpatient services." It would offer physical and occupational therapy and outpatient surgery. Patients could stay in the hospital for a few nights but would not get long-term care.

Some services, including the TCU, would be cut all together. Swedish recommends keeping the emergency room open but closing the Intensive Care Unit (ICU), citing low inpatient numbers. Swedish is continuing to develop its overall recommendations, which will be discussed with the Swedish Board of Trustees on June 27.

The decrease in inpatient numbers is partly due to a shift to a younger majority population in Ballard, according to a survey the hospital conducted last year. The survey included a 400-person telephone survey from December 2004 to January 2005 to people within the Ballard campus service area. Most demonstrated little knowledge of the hospital's services.

The survey also included two focus groups that found people moving to Ballard wanted mostly outpatient services and obstetric and pediatric services. Other studies projected flat population growth in Ballard during the next five to 10 years.

"(The survey) is not the total factor in determining these recommendations, but it's a very typical way that health care systems conduct this kind of research," said Marcel Loh, a spokesperson for the company.

Since two thirds of Ballard's TCU patients come from the company's First Hill branch, changing demographics had little effect on the decision to close the TCU, said Richerson who overseas the unit.

"It's the fact that it's losing money," he said.

Closing skilled nursing units like TCU's has been an increasing trend because of the high cost of long-term stay in hospitals and a changing senior living environment, said Loh. Northwest Hospital closed its TCU in 2002 and Valley Medical Center and Evergreen Hospital closed theirs in 2003.

Loh said the more than 50 nursing homes in King County now have the capacity to take Ballard's patients because more people are opting for assisted living communities.

"There has been an explosion in the number of assisted living facilities in King County," said Loh. "Five years ago the nursing homes wouldn't have had the capacity to take these patients."

The Swedish-Ballard TCU plans to stop accepting new admissions on May 30, with the goal of reducing it's census to zero by the end of June.

Loh said Swedish hopes to find jobs within its system for the 40 employees that will lose their positions as a result of the closure.

"There are over 500 open positions in the organization right now," he said. "We are trying to match our recruiters with displaced staff to find them the best position that suits their skills. A number of them have new jobs now, but the process is still very much ongoing."

Loh and Richerson both wanted to assure the community that the Ballard hospital would be not be closing. They also said that the Swedish organization respects the hospital's symbol as a grassroots effort by the Ballard community. The current building was built in 1954 from money collected by a group of residents who went door-to-door for donations.

"There's a sense out there that Swedish is walking away from the Ballard community-that is far from the truth," said Loh. "We are looking at how best to serve the community and we think this is the way to do it."

"We've seen some nice growth with our outpatient services," said Richerson. "But just because we are closing the TCU doesn't mean we aren't positive about the future of Ballard,"