LOCAL ELECTIONS : Hospital, Tax, Housing Issues Focus of Races : Alhambra: The community hospital’s fate could be determined as voters are asked to repeal a measure forbidding the sale of the facility.

On the second floor of Alhambra Community Hospital, the neatly made beds are all empty. One recent weekday, the silence there was broken only by the squeak of rubber soles against linoleum as two nurses power-walked for exercise through the deserted corridors.

The ghost-town atmosphere on the second floor, closed for lack of patients, underscores the hospital’s struggle for survival in a competitive health care industry. Although it tried to reorganize after declaring bankruptcy in 1981, the hospital has seesawed financially.

A city proposal to sell the hospital in 1982 triggered a storm of protests from residents, who voted 77% to 23% to forbid the sale or transfer of any interest in the hospital unless two-thirds of voters approve.

Although the hospital board did not vote to back the initiative, all board members supported it, then-President Merrill W. Francis said. But that initiative, city officials said, has backfired on the community by making it more difficult for the city and hospital board to explore ways of keeping the hospital open, including a possible sale.

So city officials and hospital board members, including Merrill and others who had pushed for the two-thirds vote restriction eight years ago, are urging voters to repeal the measure in Tuesday’s special election.

The repeal, however, is viewed with skepticism by some residents who worry that it would rob them of a say in determining the hospital’s future.

The 157-bed hospital at 100 S. Raymond Ave. was built with the aid of the Alhambra Redevelopment Agency and an $11.2-million bond in 1972. The facility, which opened in 1974, replaced an aging Garfield Avenue hospital founded by a group of doctors in the early 1920s.

The new four-story structure half a block off Main Street is owned by the redevelopment agency, which leases it to the city. The city in turn leases it to the Alhambra Hospital Corp.

The move to a new building apparently did not help the hospital attract new patients, and the facility has failed to reach a 70% break-even occupancy rate. In recent months, only about 45 of the 157 beds, or 29%, have been filled, hospital Administrator John Edwards said. He said he is making ends meet by staffing and running the facility as if it were a 60-bed hospital.

A study by the consulting firm Peat Marwick Main and Co. identified several reasons for the hospital’s problems:

Although a multilingual emergency room sign outside the hospital features English, Chinese, Korean and Spanish, the hospital has not attracted a large segment of the city’s ethnic population, said Kent Marquardt, a partner at Peat Marwick Main.

Almost half of those who seek care at the hospital are elderly Medicare and Medi-Cal patients, which means the hospital depends heavily on government reimbursements that have not kept pace with rising costs.

There are few contracts with health maintenance and preferred-provider organizations that could funnel patients to the facility. As more people choose coverage under health plans designating the hospitals they could use, fewer have the option of using Alhambra Community. Even most city and hospital employees don’t use the hospital.

Faced with plummeting revenue, the hospital has struggled to make even part of its $103,498 monthly rent. It paid the city $50,000 for February and $75,000 for March.

The council slashed the municipal budget twice last year because the hospital was not making full rent payments, which help pay for city services.

Tommy Caldwell, 64, was born in the old Alhambra hospital and voted for the 1982 initiative to keep a hospital in the community. But he now believes that without a repeal, the city could be forced to cut back on services such as police and fire protection.

But some residents are reluctant to give the city and hospital board carte blanche. “Something has to be written down,” resident Steve Jacek said. “What specifically is going to happen?”

Suzanne Vejar, a former hospital employee, believes that a buyer should be committed to Alhambra as a community hospital and is concerned that doctors belonging to Alhambra Health Partners, which remains the most interested buyer, have not shown such commitment by referring patients.

Alhambra Health Partners, a doctors group that at one time had 81 local physician investors, was hired by the board in 1986 to manage the hospital.

Last April the group obtained an option to buy the facility for $13.6 million and planned to turn it into a private, for-profit hospital. The doctors agreed to pay for a special election in order to get the required two-thirds voter approval, but the sale fell through when the doctors failed to get financing, and the election never took place.

Last September the hospital board, unhappy because it said losses that year by then had reached nearly $1 million under Alhambra Health Partners, ended its management agreement with the doctors group and appointed its own administrator, Edwards.

Since then, most of the doctors who invested in Health Partners have withdrawn their investments, at a 30% loss, and left the group, said one of them, Dr. Fred Aengst.

Despite the exodus, a handful of doctors still in the group are hoping to buy the hospital, said Dr. Basil Vassantachart, president of Alhambra Health Partners. He said the more than 20 doctors remaining believe that their option to buy is valid until 1991.

The board disagrees, arguing that when the doctors group took back a $500,000 deposit last fall after the board ended the management agreement, the option to buy was voided, hospital board President George Cummings said. But he said that if the doctors can come up with the money, the board would still be willing to sell them the facility. He said there are no other potential buyers now.

Resident Sonia McIntosh, however, doesn’t think the local doctors should be given another chance to run the hospital. She said the city should try to sell it to established health care organizations that have a proven record of running profitable facilities.

Other residents were also concerned that the agreed-on price is too low, but Councilman Boyd Condie said it was justified by appraisals. The city is paying $26,000 for Tuesday’s special election.

“The only way we’re going to lose the hospital is if we keep it,” said Mark Paulson, who helps lead a committee, with about 100 members, that is campaigning door-to-door for the repeal.

Meanwhile, Edwards is trying to halt the hospital’s financial hemorrhaging. He has laid off some employees, streamlined the billing and purchasing departments, and slashed costs. The hospital’s electric bill, costing $17,000 a week, was an early target, said Edwards, who flicked off light switches as he guided visitors through the hospital one night.

And one of the first things Edwards did when he was hired last fall was to postpone an accreditation review by the Joint Commission on Accreditation for Health Care Organizations. The hospital would not have fared well last fall, he said, but it will be ready for the review now scheduled for May 31.