Small hospital thinks big

A small private hospital in Long Beach has emerged as the leading candidate to take on one of the biggest healthcare challenges in Southern California: reopening Martin Luther King Jr.-Harbor Hospital, some key Los Angeles County officials said.

Pacific Hospital of Long Beach, which offers only basic emergency services and relatively few specialized programs, is in negotiations with the county to provide in- patient services for residents of South Los Angeles and surrounding communities, some of the region’s poorest.

Some challenging details remain to be worked out and another operator still could win the contract, but Supervisor Yvonne B. Burke said Pacific is the clear front-runner despite its size and its lack of experience with such large, complex institutions as public hospitals.

Burke, whose district includes the closed hospital, said in an interview this week that she expected negotiations to be completed with Pacific within 60 days.

“If I had to guess,” Burke said, “it’s going to be February when the hospital is reopened.”

Such a decision would appear to be a financial and managerial gamble for the county and the private hospital, but it would be warmly welcomed by community leaders, who have been highly critical of the county’s decision to close long-troubled King-Harbor and have been pressing for its reopening.

A major obstacle has been how much the county is willing to reimburse a private operator for what is usually costly care.

“We are just praying that it opens,” said “Sweet” Alice Harris, 74, a longtime Watts activist. “We are keeping a low profile so that we don’t incite a riot, with the hope that all we have to do is wait.”

Pacific’s president, Clark Todd, said his company’s proposal is to reopen the hospital with 77 beds initially, far fewer than the 400 beds once available at the Willowbrook site. “We have to have something that is manageable to begin with,” Todd said.

The county ended inpatient services at King-Harbor in August after years of failed attempts by the Board of Supervisors to reform the historic institution, treasured by African Americans as a symbol of renewal after the 1965 Watts riots.

The closure occurred under pressure from state and federal regulators whose latest sanctions followed the death of a 43-year-old woman who writhed unattended on the floor of the emergency room lobby for 45 minutes.

The hospital had been buffeted by problems almost since it opened in 1972. But the current crisis began in earnest four years ago when a series of patient deaths was linked to serious lapses in care by nurses and other staff members.

In a five-part series published in December 2004, The Times detailed how the hospital had become one of the worst in the nation by a variety of measures, largely because county supervisors failed to take aggressive action for fear of being branded racist.

According to a recent study funded by the California Endowment, south Los Angeles County has half the number of hospital beds per capita than the state as a whole.

Burke said the negotiations with Pacific still face key obstacles. Foremost among them is the number of uninsured patients the hospital would take and how much the county would pay for their treatment.

“Most other entities have requested extraordinary amounts of money because they think the county has a lot of deep pockets and also has a lot of uninsured and needs to find a place for them,” Burke said. “If [Pacific is] still negotiating, they are not over the top.”

When the Board of Supervisors voted in 2004 to close the hospital’s trauma center, the county entered into an agreement with California Hospital Medical Center to help it open a trauma center with millions of dollars in reimbursement payments for the care of uninsured patients.

Another key issue is likely to be whether Pacific, a nonunion hospital, would be required to hire union workers at the reopened hospital. County Chief Executive Officer William T. Fujioka said the hospital would not necessarily be required to hire union workers for any or all jobs. “Because this is going to be a private hospital, they will be hiring their own people,” Fujioka said.

Kathy Ochoa, a senior advisor on health policy for Services Employees International Union, Local 721, which represents county healthcare workers, said her powerful organization would fight to ensure union representation at the hospital.

The third obstacle would be what role, if any, the University of California system would play at the hospital.

Burke said that she and other supervisors hope that the university system will take a key role in the administration of the hospital -- as it already does at county-operated Harbor-UCLA Medical Center near Torrance -- within the next few years.

Robert C. Dynes, outgoing UC president, wrote in January, however, that his organization would not be able to play a lead role in the reopening.

Pacific’s president, Todd, said his organization would have to evaluate “what they bring to the table” before accepting any partnership with the UC system.

Meanwhile, Fujioka and other high-ranking county officials said they are entering a two-week period of particularly intense negotiations with Pacific to resolve key matters.

Soon after Pacific, a 184-bed facility, was purchased in 1997 by HealthSmart Pacific, the facility found a profitable niche in the troubled Southern California healthcare system by focusing on workers’ compensation patients.

The focus helped triple the hospital’s inpatient census and increased surgeries more than 600%. Hospital officials said it now employs 800.

The hospital drew scrutiny in 2003 when the San Francisco Chronicle reported that former Assemblyman Tom Calderon (D-Montebello) had received a consultant’s fee from it within a month of leaving office.

Calderon had sponsored legislation that allowed outpatient surgery centers to continue to charge unlimited fees in workers’ compensation cases.

The hospital was purchased in 2005 by Faustino Bernadett, who had held a high position under the previous owner.

His wife, Martha, is the daughter of the late C. David Molina, a pioneer in providing managed care for welfare recipients through a firm he founded, Molina Healthcare. The Bernadetts are major shareholders in the health maintenance organization.

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garrett.therolf@latimes.com

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Times researcher John Tyrrell contributed to this report.

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Hospital facts

Pacific Hospital of Long Beach is in talks with Los Angeles County officials about reopening King-Harbor Hospital in Willowbrook. Here is Pacific Hospital at a glance:

Number of beds: 184

Number of employees: 800

Purchased in 1997 by HealthSmart Pacific, which transformed the hospital into one of Southern California’s major providers of medical care for workers’ compensation patients.

Purchased in 2005 by Faustino Bernadett, who with his wife is a major shareholder in a health maintenance organization, Molina Healthcare, that serves welfare recipients.

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Source: Pacific Hospital of Long Beach