Dissident San Pedro Hospital Members Call for Board’s Ouster

Times Staff Writer

A faction of the 350-member community corporation that owns San Pedro Peninsula Hospital has called for replacement of the governing board and a “public airing” of the severe financial problems that afflict the 64-year-old hospital.

A petition presented to the hospital by the 22-member group, which calls itself the Committee to Save San Pedro Peninsula Hospital, calls for a corporation meeting April 18 to remove the 15 board members and elect a new slate.

The corporation--limited to 350 members--is made up of San Pedro residents who purchase memberships for $100 and pay $50 a year. The corporation’s sole function is to elect the hospital board. The elections are usually conducted by mail, and a regular election of four new board members was just held.

Hospital spokesman John A. Calderone said hospital attorneys are reviewing the corporate bylaws “to determine if and when the meeting will be held.”


But Robert L. Hansen, chairman of the dissident group, said that under corporate bylaws, 5% of the 350 voting corporate members--or 18 members--may call a special meeting for a specified purpose.

In late January, the hospital disclosed losses that exceeded $7 million for 1987 and 1988, but said it is optimistic that changes in procedures will begin cutting costs and improving revenue within six months.

A $50,000 study by the Ernst & Whinney accounting firm concluded that through major internal changes the hospital “can turn itself around and become profitable,” according to a statement by the hospital.

The committee, however, asserts that the “present board has had over five years to turn things around,” has failed to do so, and does not have the time it says it needs to do the job.


“We refuse to stand by and watch our community’s only hospital go bankrupt or end up controlled by some outside, profit-making hospital chain,” the group said in a statement.

“Most of us feel there are so many problems, the board would have addressed them if it could have. There is not a great deal of confidence that they can do what they say,” said Dr. Philip Geller, one of the petitioners. He is on the hospital staff and has been a corporation member for 20 years.

The hospital declined to release the full Ernst & Whinney report, but a copy provided to The Times says the hospital “has suffered from mismanagement,” is overstaffed for its size, and lacks strong services that allow it to dominate its own market area in the face of competition from hospitals in other parts of the South Bay and Long Beach.

The study calls on the hospital to sell or lease such services as its skilled nursing facility and home health agency and concentrate on developing a few strong clinical services, including emergency medicine, obstetrics and cardiology.

The present hospital budget of $95 million is based on a hiring freeze for 49 vacant positions. The report calls on the hospital to eliminate another 75 to 125 jobs for a yearly savings of between $2.5 million and $4 million. The hospital now has 900 full-time employees.

Ernst & Whinney recommended that the hospital organization be restructured, and the board has unanimously approved a proposal by the firm for a $200,000 study of hospital operations on a department-by-department basis.

John Wilson, acting chief executive officer at the hospital, said the hospital already is implementing portions of the initial study. These include a review of patient care to reduce the length of the hospital stay and ensure that there is insurance coverage. This is considered critical in a hospital where 59% of the patients are on Medicare or Medi-Cal, which limit reimbursements. Ernst & Whinney said better controls in this area can save the hospital $1 million a year.

Wilson said the business office has been reorganized to, among other things, eliminate insurance problems that hospital officials say account for most of the financial loss. These included misclassification of insurance coverage for some patients, resulting in the hospital receiving less for services than it cost to deliver them. Medicare payments below the cost of services also were factors.


Wilson said business office hours have been extended, the staff for insurance verification has been increased and financial counselors provided to work with patients.

Hansen, chairman of the dissident committee, said the petitions compel the hospital board “to call the meeting” and 30% of the corporate members must be present for it to be held and voting conducted.

Last week, with 189 ballots submitted, corporate members elected four new board members to three-year terms. They are Rancho Palos Verdes Mayor Jacki Bacharach; Thomas Wood, president of Marymount Palos Verdes College; Philip A. Tremonti, a certified public accountant who lives in Palos Verdes Estates, and Martha Salot, a San Pedro businesswoman. Board members do not have to be corporation members.

Hansen said the committee’s proposed board slate has not been selected but will include five current board members.

“We will put up a slate that will give the hospital and the community a fair shake,” he said.