County May Hand Control of King/Drew to Private Firm

In response to a series of medical lapses and patient deaths, Los Angeles County officials put forth a plan Wednesday to hand over day-to-day management of Martin Luther King Jr./Drew Medical Center to a private consulting firm.

The move would mark the first time the county had ceded operations at one of its hospitals to outside managers, and it underscored the county’s struggles to fix years of problems at the Willowbrook medical center, near Watts.

Under the plan, which the Board of Supervisors is expected to approve Tuesday, the county would pay Navigant Consulting up to $13.25 million to take over from current county managers for at least a year and complete a top-to-bottom review of how the facility operates. The firm could begin work as early as Nov. 1.

County officials said the shift would provide much more oversight of the hospital, with 23 consultants from Navigant doing the jobs that five county managers now perform. The firm intends to perform a new assessment of each doctor’s and nurse’s competence and productivity as well as a review of each department, such as surgery and the emergency room. It also hopes to quickly computerize records such as nurse staffing reports at King/Drew, the only hospital in the county system to still do them by hand.

Because the county remains liable for any problems at King/Drew and is continuing to pay the hospital’s bills, the Navigant team would answer to Dr. Thomas Garthwaite, director of the county’s Department of Health Services. The firm can recommend firing or disciplining employees, but because of labor contracts, those moves must be approved by Garthwaite or another county official.

The county agreed to bring in outside managers as part of a pact last month with federal health regulators, who have threatened to cut off $200 million in federal funding. That money accounts for more than half of the hospital’s budget. Under the deal, the county must file progress reports with federal health officials every 60 days, and faces the loss of federal funds if problems are found.

Some healthcare leaders praised the county’s action, calling it a bold move to fix the hospital. But given King/Drew’s troubled history, some said that only time would tell whether it succeeded.

“This hospital has 30 years of defective management culture to turn around,” said Jim Lott of the Hospital Assn. of Southern California. “To ask them to do that is to walk on water.”

King/Drew has reeled in the last year from a series of lapses in patient care, including several that contributed to deaths, according to regulators. The latest revelation came Monday, when the county confirmed that a 28-year-old patient died last Thursday after a nurse turned down the audio alarm on his vital-signs monitor, then failed to notice that his heart was barely beating. On Wednesday, inspectors from the state and a national hospital-accrediting group were at King/Drew investigating the incident.

The accrediting group has recommended pulling its seal of approval, which could lead to the closure of doctor training programs at King/Drew and the loss of nearly $15 million in private insurance reimbursements.

Bringing in Navigant is one of the most drastic of the county’s many efforts to reform the hospital. Over the last year, the county brought in its own management team and hired several consultants at a cost of about $1 million to look at ways to improve specific areas such as nursing and the accreditation process.

Fred Leaf, chief operating officer of the county health department, said the officials recommended Chicago-based Navigant because it had received “good reviews” on such other projects as a turnaround a few years ago of the Watts Health Foundation, a community health clinic and HMO.

The Hunter Group, a division of Navigant since 2002, was hired by UCLA Medical Center last year to improve the hospital’s finances. The consultant recommended cutting 475 jobs, provoking the ire of doctors who said Hunter was putting the bottom line ahead of serving patients. The group worked for UCSF Stanford Health Care in the Bay Area in 1999, winning praise from administrators for boosting efficiency but criticism from labor groups for reducing medical services.

Navigant is a well-known consulting company that not only works in healthcare but also advises companies and government agencies on litigation, energy policy, corporate finance and government contracting. It has 1,500 full-time consultants based in 36 cities nationwide.

Leaf said he and others were impressed by the firm’s “deep resources” of in-house healthcare experts.

The other finalist, Cambio Health Solutions of Tennessee, quoted the county a maximum price of $24 million, almost double that of Navigant.

Some union representatives have already expressed reservations about Navigant, citing subsidiary Hunter’s tough cost-cutting efforts at two Northern California hospitals.

“From an employees’ perspective, the Hunter Group has been known historically to slash and burn and cut and reduce,” said Kathy Ochoa, a senior health policy analyst for Service Employees International Union Local 660, which represents nurses and other Los Angeles County health employees.

A spokesman for Navigant declined to comment until the King/Drew pact was approved.

County officials insist that the consultants will be looking not to cut costs but to improve the quality of medical services — a mission that Ochoa said she supports if true.

“If the intent is to strengthen the institution, you know, our belief is that those most impacted by the decision need to have a say in the process,” she said in an interview later. “We want to make sure there’s the right oversight in place.”

The plan also received a mixed reaction from some community groups, which are fighting a county plan to shut down King/Drew’s trauma center. The county wants to close the center, which treated about 2,150 critically ill patients last year, so resources can be allocated to other parts of the hospital.

Timothy Watkins, president of the Watts Labor Community Action Committee, said the county should have consulted with the community before making the plans, thereby lessening suspicion.

“I’m skeptical, because all these plans are being generated from an external point of view,” he said. “The community keeps crying out and begging to be included. We see these plans carried out and these so-called solutions fall flat on their face.”

Gloria Walton, a member of Action for Grassroots Empowerment and Neighborhood Development Alternatives, said she supported bringing in outsiders with medical expertise to run the hospital but was surprised at the price tag.

She called the $13.25 million “an outrageous amount of money,” adding: “So the problem better be fixed.”

Health department leaders said they were under a federal deadline of Oct. 19 to hire a consultant to run King/Drew.

They presented the plan Wednesday to county supervisors’ aides, who gave it a generally warm reception. Several aides expressed hope that Navigant was not just the best company to run the hospital, but also had the public relations skills to communicate with the community.

“Are they constantly thinking about community relations and communicating with the employees?” asked Gerry Hertzberg, an aide to Supervisor Gloria Molina.

“We’re not hiring them as a P.R. firm,” Leaf responded. “We’re hiring them to restructure the hospital.”

The deal was negotiated over the last 3½ weeks. Of the 23 consultants, 11 would take over management duties while 12 would perform the various assessments.

One of the top priorities for Navigant would be finding permanent executives to fill numerous vacant management spots at the hospital. The firm would also focus on strengthening the peer review process — in which doctors evaluate each others’ work — as well as confirming all physician credentials.

The consultants hope to reduce waiting times in the emergency room and improve the process for reporting medical errors.

“I think this is an extremely comprehensive plan,” Leaf said. “I anticipate a lot of questions [from supervisors], but I do anticipate approval of the plan.”