Midwood Shifts Focus to Mentally Ill

Unable to withstand heavy competition and continuing losses, Midwood Community Hospital in Stanton has stopped admitting medical and surgical patients and is expanding its psychiatric services.

Robert I. Mawhinney, Midwood administrator, said Tuesday that the 110-bed hospital shut down its general surgical and medical operations early this month and is now exclusively treating the mentally ill.

The hospital laid off 130 employees, ranging from dietary specialists to nurses and housekeepers, Mawhinney said.

Mawhinney said the owners of Midwood, a group of 38 doctors and two attorneys, decided to withdraw from the highly competitive medical and surgical market in west Orange County after the hospital lost about $3 million in three years and was filling only about 40% of its beds.

Midwood’s owners bought the hospital in a bankruptcy sale in 1979 and turned it around financially, Mawhinney said. “It was going well until 1988, and then the slide started,” he said.

Mawhinney blamed Midwood’s problems on inadequate reimbursement from private insurance carriers and from government health plans for the poor. Also, he said that because Midwood did not offer obstetrics and open-heart surgery, it had difficulty competing for the business of managed-care organizations, which account for an increasing percentage of hospital business.

Two years ago, the hospital established a “bloodless” surgery program--providing surgery without the need for blood transfusions--that was aimed at attracting Jehovah’s Witnesses, which abide by a religious restriction against transfusions.

While that program was successful, Mawhinney said, it didn’t attract enough patients to ease the hospital’s financial woes.

“Every scheme that was legal I tried,” Mawhinney said. “The fickle finger of fate was against us, I think.”

Among the other tactics it took, Midwood last year dropped its money-losing Medi-Cal contract and expanded its mental heath beds from 20 to 36.

Mawhinney said Midwood now is converting entirely to psychiatric care because the medical health plans are “paying reasonable rates and the cost of providing that care isn’t as great” as for medical and surgical services.

“We have a chance for survival in that arena,” he added.

Midwood follows in the footsteps of Buena Park Community Hospital, which two years ago stopped admitting medical and surgical patients and dedicated all of its 53 beds to treating chemical dependency and mental health patients.