Olive View Adds to Glut of Beds but Fills Gap for Poor Patients

Although the San Fernando Valley already has far more hospital facilities than patients to use them--and is getting even more--the addition of 350 beds at the new Olive View Medical Center does not worry Valley hospital administrators.

A county hospital, with its emphasis on treating indigent patients who cannot afford care at other hospitals, will not join in the competition for paying patients, hospital administrators say.

“We’re not projecting any decline in our patient load,” said Liz Atkins, spokeswoman for Holy Cross Hospital in Mission Hills. “Our feeling is that it will service Valley residents who currently travel to County-USC, rather than siphon patients from other Valley hospitals.”

Effect Seen as Minor

“It’s certainly not going to help us or any other hospital in the Valley,” said Judy Simpson, spokeswoman for Encino Hospital. But she expects the effect on her institution to be minor.

According to statistics kept by the Office of Statewide Health Planning and Development, about 40% of the hospital beds in the Valley are empty on an average day.

The excess of beds has increased competition among hospitals for the available business.

The resulting money worries were responsible for an unsuccessful effort by a group of Valley hospitals to persuade the county Board of Supervisors not to rebuild the earthquake-shattered Olive View, but to contract with them instead.

That would have saved the county the expense of building a new hospital, and given the hospitals patients for their empty beds, for which the county would pay the bill.

The organization, called the Consortium of Hospitals Organized in Cooperative Effort, or CHOICE, was made up of 12 private hospitals from the Valley, Burbank and Glendale. The group submitted a 53-page study to the county in 1981, offering “what we saw as an alternative to rebuilding Olive View,” said Bob Armstrong, who was then president of the organization.

“We identified specific hospitals that would commit unused capacity to provide services” to specific types of patients, said Armstrong, senior assistant administrator at St. Joseph Medical Center in Burbank.

A blue-ribbon panel appointed by the supervisors to consider it rejected the proposal, saying it was not a viable alternative. Reconstruction of Olive View proceeded.

Some hospital administrators still wish the county had accepted their proposal. Even if the opening of Olive View will not take away patients, neither will provide any more of them, which they want.

“Why did the county insist on building that thing, instead of just contracting with the hospitals that are already here?” groaned one executive, who asked not to be identified.

“They could have used the money to build a prison. We need more prisons.”

CHOICE, initially formed to try to minimize the impact of state and federal regulations on hospital finances, “just faded away early last year,” a casualty of the Valley hospital surplus, Armstrong said.

“When we entered this era of increasing competition,” he said, “hospitals found it wasn’t in their interest to be sharing their strategic plans with one another.”

Valley hospital executives say the empty beds are not evenly distributed. Some large hospitals consistently fill 70% to more than 80% of their beds, whereas about half a dozen smaller hospitals struggle on the edge of extinction, with only 30% or so of their beds occupied.

A shortage of patients was among the factors blamed for the closing of Lake View Medical Center earlier this month. The 25-year-old hospital had been under the protection of Chapter 11 of the federal bankruptcy law since October, 1984.

Served Low-Income Patients

Lake View, which served mostly low-income patients from the northeastern Valley and depended heavily on Medi-Cal payments, was often mentioned by executives of other hospitals as the most likely Valley hospital to go out of business first.

Many of them predict privately that from three to six more Valley hospitals will close in the next several years, the most likely candidates being small, independent institutions without the financial resources of a hospital group or chain.

The elimination of Lake View cut the number of Valley hospitals from 28 to 27, but only briefly.

Kaiser Permanente plans to open a hospital in Woodland Hills Friday, adding to the competitive pressures. It will have 212 beds, 67 more than Lake View had when it closed.