Last Resort for Orange County Poor : UC Irvine’s Hospital: Red Ink Hemorrhage

It was, a doctor said, one of the worst cases of heartlessness he had seen.

The woman, in the early months of pregnancy, was miscarrying when she walked into University of California, Irvine, Medical Center in the city of Orange. Another hospital had sent her, deceptively buoying her hopes by saying that the specialists at the university’s teaching hospital would be able to save her tiny fetus.

The doctors at the UCI Medical Center knew better. They knew that the baby had no chance of surviving. The patient had been “dumped” there because the mother could not afford to pay for medical treatment.

With Shane, the technique was different. Shane, a boy whose family had just moved to Orange County, had been sent home from school with a high temperature and a reddened throat and told not to return until he had seen a doctor. The school nurse had referred the family to a nearby clinic.

Shunted Around

But when the clinic receptionist inquired about their finances--the family had recently moved from North Carolina and Shane’s father was jobless--the boy’s mother was told to try another medical office. A phone call there got them bounced to yet another clinic. And another. Then to another medical office.

Finally, like so many other Orange County residents without medical insurance, they ended up in the emergency room of UC Irvine Medical Center, driving past half a dozen other hospitals to get to the emergency room in Orange. There, finally, they found a sympathetic ear and a doctor willing to put medicine ahead of finances.

Dumping is a word frequently heard at UC Irvine Medical Center--the hospital of last resort for Orange County’s poor.

“They come here after they’ve been everywhere else, and we can’t turn them away because we have a conscience,” one emergency department doctor said. “So we take them in here, and they become our red ink.”

Tide of Red Ink

For UC Irvine Medical Center, the youngest of the University of California’s five teaching hospitals, the red ink has become a tide.

“Technically, it is bankrupt,” Dr. Cornelius Hopper, UC vice president of health affairs, told an Assembly hearing recently.

Irvine’s financial crisis is also shared by two other UC medical centers and by a growing number of university teaching hospitals across the nation. University hospitals are struggling to balance escalating costs against dwindling funds, treating a continual flow of poor patients at a time when hospitals need more paying patients to survive.

The UC medical centers at Irvine, San Diego and Davis are expected to run up a combined deficit of $26 million by June 30.

State Bail-Out Planned

The university is pushing a bill before the Legislature to provide $26.6 million in financial relief to the three medical centers. In making their case before the Legislature, university officials argue that UC’s hospitals, in fact, have become one of California’s largest “charitable institutions.”

The UC medical centers, they say, increasingly are forced to pay the burdens of the poor--something, they say, that federal, state and local governments are supposed to do. The bail-out has the backing of the Legislature; the funds are included in the state budget due to be voted on this week.

UC Irvine Medical Center illustrates the paradoxical situation of many university teaching hospitals: medical excellence in the midst of mounting debts.

Its sprawling buildings house a nationally renowned burn center, the county’s only poison information center, a neonatal center that specializes in saving premature babies, a trauma center where doctors routinely piece together the mangled bodies of victims of automobile crashes and crime, and special clinics that help people live with such chronic problems as cardiac arrhythmia and diabetes.

About 17,000 people checked into the 493-bed hospital for a total of 117,183 days last year; 75,000 to 80,000 more visited the clinics or emergency room a total of 174,000 times.

Of UC Irvine’s $300-million budget this year, $120 million will go to the hospital.

Overshadowing Problems

Yet, UCI Medical Center’s accomplishments are overshadowed by its problems:

It is fighting to live down its role as the former Orange County Medical Center, the one-time exclusive infirmary for the county’s poor that now, under university ownership, is the dumping ground for other hospitals that do not want government-financed patients.

It is trying to shed an image associated with poor people and to market a new profile of expert and energetic doctors in a facility teeming with the latest research and discoveries.

It is battling to woo privately insured patients, enticing them with a modern medical center offering the most specialized care in the county. But it is running into fierce competition in a county with too many hospitals.

And it is struggling to reduce its deficit, projected to reach $12.5 million by the end of this fiscal year.

Fighting for Its Life

In short, just like many of the patients who are wheeled through its doors, UC Irvine Medical Center is fighting for its life.

Even if the Legislature approves emergency funding, UC’s three financially hemorrhaging medical centers still are left with their central problems unsolved.

“It’s too little, too late,” said William Gonzalez, who recently stepped down as the hospital’s director.

Education analyst Roz Elms likened the bail-out to putting a Band-Aid on a wound that needs sutures.

“This is a crisis for the University (of California),” said Elms, director of health and science for the California Post Secondary Education Commission. “There is more at stake than what can be solved by July 1. It may be that Irvine cannot survive. But that’s a decision for the regents to make.”

Hold Purse Strings

The legislators cannot lower the curtain, but they hold the purse strings, Elms said. “And they can make it possible for the regents to close it.”

At UC Irvine Medical Center, the curtain already has begun to fall. For instance, in the emergency department at UC Irvine Medical Center, Room 1427 sits unused, its door somberly draped with a black “Rest in Peace” sash. Until April 1, the room was one of six paramedic base stations, operated by a nursing coordinator who conversed via radio to paramedics at the scenes of accidents and directed them to hospitals, which, in turn, were alerted to the incoming cases.

The base station nurse’s position was one of more than 100 recently deleted at the medical center.

Although the emergency department staff acquiesced, the shutdown of the base station remains a sore point.

“We weren’t only involved, we were a leader,” said emergency department director Dr. Kym Salness.

‘Heart and Soul’

Closing the base station “cuts at the heart and soul of what a university should be doing,” Salness said. “But these are some of the hard decisions that the university has had to grapple with.”

The emergency department staff may win yet; the university administration has applied to the county to reopen the base station.

The UC system hopes that the Legislature’s proposed grant will stave off more program cuts at UC Irvine Medical Center.

But while the university is begging the Legislature for help, the problem has its roots in the Legislature itself.

In the late 1960s and early 1970s, when the University of California decided to increase the number of medical schools, the Legislature decided against building new hospitals catering to the affluent. Instead, the Legislature opted for community medicine, and through the years, the UC regents took over three existing county hospitals for San Diego, Sacramento and Orange counties.

‘Bought a Gift Horse’

“There’s some question whether they bought a gift horse without looking at the teeth on the three of them,” said state Sen. Walter W. Stiern (D-Bakersfield), chairman of a finance subcommittee on education. “If they had known then what they know now, they probably would have never bought into that situation.”

The former county hospital buildings were old and full of problems. And at all three, the patient load continued to be largely poor patients. But nobody really minded, as long as government programs paid for them.

Then came the Medi-Cal reforms of 1982.

Under the reforms, a hard-bargaining agency negotiated reimbursement prices with each hospital.

At the same time, the state shifted the responsibility of medical care for indigent adults to the counties and passed along only 60% of the financing needed. Once more, reimbursements for poor patients were cut back.

Those hospitals that could keep costs down and make up their losses with money from privately insured patients managed to live with the cutbacks.

Effect Snowballs

But at the UC hospitals in Orange, Sacramento and San Diego counties, the effect quickly snowballed. Their lopsided patient loads--combined with their complicated and expensive cases, the inefficiencies of the aging buildings, the extra costs of teaching and research--started the red ink flowing.

“When UC took over those three hospitals, no one realized that the Legislature was going to pass the Medi-Cal reforms,” said Lt. Gov. Leo T. McCarthy. “The legislators weren’t thinking about the UC teaching system. They were thinking of the fastest-growing item in the state budget, Medi-Cal. They were trying to find a way to cap that, and the UC teaching hospitals just got caught in this larger decision.”

The UC regents have in the past grumbled about UC Irvine Medical Center’s budget problems. But they have said publicly that they think the Irvine hospital is well run, and UC analyses have shown that Irvine’s medical center has the lowest operating costs of the five.

Even so, critics charge that UC Irvine Medical Center’s administration is sometimes guilty of expensive bad judgment and inefficiency.

Costs Out of Line

They cite the hospital administration’s reversal on the issue of the paramedic base station. (The administrators closed it when January’s overall hospital costs ran alarmingly high; administrators have since realized that the month’s costs were disproportionate.) Critics also say that the university has failed to come up with innovative cost-cutting measures.

UCI Medical Center is not the only hospital in Orange County set up to handle the government-financed patients. But the other hospitals, struggling to stay afloat during the current upheaval in health care economics, find that it is not good business to keep the poor around for long, UCI officials said.

One way or another, the bulk of them wind up at UCI Medical Center.

Seventy percent of UC Irvine’s patients are paid for by county, state or federal governments.

About 40% of Orange County’s working poor who need a doctor go to UCI Medical Center or one of its clinics, although 31 other hospitals in the community have contracts with the county to treat them.

The medically indigent adults are UCI Medical Center’s biggest money-losers; the hospital gets back 51 cents for every dollar it spends.

Seek Paying Patients

UCI Medical Center officials know that they have to change the ratio of private-to-poor patients if they are to save the hospital. For the last few years, they have methodically increased the numbers of private patients by 2% annually.

The hospital’s administrators say that they would be thrilled to reach a 50-50 ratio--a figure that would still make most private, for-profit hospitals go under.

But, all acknowledge, it will not be easy.

Ten years after the county transferred ownership of the medical center to the university, the spotless, sprawling hospital is still perceived, among the affluent and the moneyless, as a charity hospital, officials admit.

It is the hospital where the Orange County Jail inmates go. And although the hospital has a separate jail ward, occasionally an inmate is shackled to a bed among other patients in the maternity ward or intensive care unit.

Within the predominantly Latino communities of Orange County, it is well known that UCI Medical Center is the place to go to have a baby born, a broken bone mended, a sore throat soothed or a stomach ache calmed.

‘Refer Themselves’

The uninsured patients “tend to refer themselves to our door,” said Sumiyo E. Kastelic, senior associate director. “And that gets reinforced. Someone gets sick and their neighbor says, ‘Go to UCI.’ ”

UCI Medical Center is centrally located among the poorer neighborhoods of Santa Ana, Garden Grove and Anaheim. But three or four other hospitals are equally close.

“Some people don’t even take their (hospital) arm bands off after they leave here because that’s their only form of identification,” said Luann Sims, a registered nurse in the emergency department. “Then, if they’re ever found in the community, needing help, they are brought right back in here.”

And when they do not walk into UCI Medical Center on their own, the poor often are dumped there by others.

For outpatient care, dumping usually occurs in subtle ways. It can be accomplished by an abrasive medical office worker who speaks only English and makes no effort to comprehend ailing Spanish-speaking people. Or it can take the form of repeated referrals from one emergency room or clinic to another.

Unduly Complicated

It can be even more insidious when the patient is “seen but not definitively treated” by another hospital, or no follow-up care is provided, Salness said. By the time the patient reaches UCI Medical Center, the medical condition is unduly complicated and expensive to treat, he said.

Everyone agrees that the economic picture would brighten if UCI Medical Center attracted a larger number of patients with insurance. But while the university has poured about $40 million into gleaming new buildings and state-of-the-art equipment at the hospital since 1976, the public still thinks of the medical center as the dark, dreary and overcrowded facility it was under county management.

So does the medical community. Few physicians in this doctor-rich county refer patients to UCI Medical Center. Even doctors who do volunteer work for the UCI’s medical school do not refer many patients to the medical center, said Gonzalez, the former hospital director.

Private physicians who lecture or supervise students for prestige and professional stimulation are common in communities with teaching hospitals, Gonzalez said.

“But in this community they do not practice at UCIMC, and that is the difference,” he said.

Features Specialties

UCI Medical Center had intended this year to woo private patients through a public relations campaign focusing on specialties such as its diabetes clinics and its cardiac arrhythmia program, run by doctors who have federal Food and Drug Administration approval to administer experimental drugs. But the financial squeeze forced administrators to scale down the campaign, Kastelic said.

Had Orange County Medical Center never been handed over to the University of California, chances are that it still would face desperate financial problems, as do county-owned hospitals throughout the state.

“One of the wisest things the (Orange County) Board (of Supervisors) has done, and one of the reasons the county budget is in better shape than other counties’ is that we don’t own the county hospital,” said Bob Love, acting director of the Orange County Health Care Agency.

Historically, there has been no love lost between the County of Orange and UC Irvine. Relations between the two have been strained over the contract for indigent care; about five years ago there was a bitter split over what health care should be provided, versus what health care the county should pay for.

Still, Love said, the county is not shortchanging the medical center; it passes along all the money the state has provided for indigent care.

But state Sen. John Seymour (R-Anaheim), whose district includes the UC Irvine campus and medical center, called for a more “magnanimous” approach from the county and the state toward the plight of of the medical center.

He has lobbied for passage of the Legislature’s $26.6-million bail-out because, without it, “they’re sunk, they’re trapped,” he said. But the county, too, needs to be generous, he said.

‘Did a Number on UCI’

“I think the county did a number on UCI,” Seymour said.

“What would happen (to Orange County’s medical needs) if UCI Medical Center were to throw up its hands and say, ‘We can’t make it?’ There’s never any conversation about that. Yet I see the possibility of that happening,” he said.

“If they don’t make it, the county is going to wind up with it back in its lap,” Seymour said. “I hope the Board of Supervisors is wise enough to recognize that they got rid of a turkey.”