Senate Panel Backs Plan for $26-Million UC Hospital Bailout

A state Senate subcommittee on Monday gave a boost to a proposed $26-million bailout of financially plagued hospitals at UC Irvine, UC Davis and UC San Diego.

A three-member finance subcommittee voted 2 to 0, with the third senator absent, to give the Irvine and San Diego hospitals $11.6 million in special building funds. The subcommittee also voted another $15 million to erase part of the red ink at all three hospitals.

The building money, if approved by the overall Legislature, would provide the UCI Medical Center in Orange with $1.5 million to upgrade electrical systems and $6 million to renovate its intensive care unit.

UC San Diego would get $4.1 million to renovate its medical center’s intensive care unit.

UCI’s Debt Is Greatest

The subcommittee did not direct how the $15 million in debt-reduction money should be divided among the three UC hospitals. UCI Medical Center’s current $10.2-million indebtedness, however, is the greatest in the university system.

The Senate subcommittee’s action was the first legislative vote on Gov. George Deukmejian’s budget proposals to help the UC hospitals. Senate observers said passage by the key subcommittee probably ensures the money’s approval by the overall Senate.

But Sen. Alfred Alquist (D-San Jose), chairman of the Senate Appropriations Committee, told the hearing that the $26-million bailout probably will have problems getting through the Assembly.

“From the noises I hear from the other side (the Assembly), you’re going to need all the help you can get over here (in the Senate),” Alquist said.

He apparently referred to last week’s Assembly hearing on the UC bailout requests. While no vote was taken at that hearing, the joint Assembly subcommittee members said many other hospitals in the state have financial problems similar to those at UC hospitals.

Some Assembly members said they plan to expand Deukmejian’s bailout money to help county and other public hospitals.

UC officials have said they agree that other hospitals also are having financial trouble, but stressed that UC hospitals need special relief because of their teaching role.

The Senate subcommittee, unlike its Assembly counterpart, had little debate about the bailout money.

UC Irvine Chancellor Jack Peltason, who attended the Senate subcommittee session here, was jubilant at the vote.

“I’m pleased and gratified for the support,” Peltason said afterward. “This doesn’t solve our problem, but it contributes to the solution.”

Peltason said he is now optimistic that the overall Senate will approve the bailout money. He also said he believes the Assembly will.

“I haven’t heard anyone over there who said they don’t think the university hospitals need the money,” Peltason said. Assembly debate, he said, has been concerned with needs of other hospitals. “Because of our teaching mission, the university argues that we have a special need.”

Giving the two favorable votes Monday were Sen. Walter Stiern (D-Bakersfield) and Sen. Milton Marks (R-San Francisco). Sen. Nicholas Petris (D-Oakland) was absent.

Alquist, who chairs the overall Appropriations Committee, came to the subcommittee hearing Monday just to hear the brief debate. During the discussion, Alquist said he totally favors the $15 million in operating subsidies; he did not specifically comment on the $11.6 million in building money.

The UC request apparently got a strong boost in the Senate when the influential Office of the Legislative Analyst dropped its opposition to the bailout money. Thomas Dooley, representing that office, told the subcommittee that not only had opposition been dropped, but his office was recommending $1.6 million more in building funds than the governor’s proposed $10 million.

Dooley, however, stressed that the Legislature should reject the UC request that its hospitals get similar bailout money for the next six years. The subcommittee, which followed the legislative analyst’s recommendations in all its votes, pointedly made no reference to more bailout money in future years for the UC hospitals.