Financial Crisis Forces Hospital to Shut Doors

Beleaguered Marina Hills Hospital in Ladera Heights closed its doors Friday and transferred its 25 patients to other hospitals ending months of financial troubles, employee complaints and patient loads that had dipped to only one patient at times.

Hospital Administrator Marvin Herschberg said the final blow to the troubled hospital was the failure of the state Medi-Cal system to pay its current bills to nursing homes and hospitals.

However, the hospital had been strapped financially for some time, and had been operating under bankruptcy protection. Hospital management at one point had pleaded with employees--who were owed back pay--to keep working so the facility could receive patient referrals from the county.

Herschberg said the Medi-Cal crunch put the final squeeze on the hospital

State officials said Wednesday that Medi-Cal had run out of money and that there would be a shortfall of funds to meet payments to convalescent homes and hospitals until July when the next fiscal year begins.

“Basically, we had about $1 million owing us from the state for Medi-Cal services,” Herschberg said. “We found we couldn’t collect on them from the state until July. We couldn’t borrow any more money and we didn’t want to endanger any patients so we made a decision this morning (Friday) to just close down.”

The 103-bed hospital was employing about 100 people when it closed, the administrator said. It was not immediately clear what would happen to the employees.

Herschberg said: “The closing is particularly tragic because we felt we could have broken even in June. The county Department of Health Services was sending us obstetrics cases and we were performing surgery.”

The hospital primarily serves obstetrics cases, most of them funded by Medi-Cal or Medicare. During previous troubles in January and February when the facility was having problems meeting its payrolls, it was noted that the county Department of Health Services expected more than 46,000 babies to be delivered at county hospitals this year, severely overtaxing a system designed to deliver 35,000 babies safely.

Audrey Bahr, chief of the contract program office for the health department said there is “an obstetrics crisis” in Los Angeles County and Marina Hills Hospital’s services were badly needed. She said she expects health officials to explore ways of reopening the facility.

She said officials were notified Friday afternoon of the closure. Until then, the officials had been trying to help the hospital by referring county obstetrics patients to it.