Fate of UCI’s Medical Center Is in Doubt : Hospital: University officials, faced with drastic budget cuts and enormous losses, are threatening to close the facility unless the county helps pay for indigent health care.

With the University of California facing drastic budget cuts, university officials are threatening to close UCI Medical Center in Orange unless the county picks up the tab for patients unable to pay their medical bills.

“The university cannot, and will not, continue to absorb the enormous losses caused by progressively inadequate reimbursement for indigent patients, patients for whose care the county, not the university, has the ultimate statutory responsibility,” UC Irvine Chancellor Jack W. Peltason recently wrote in a letter to the County Board of Supervisors.

Last year, the hospital took care of 10,000 indigent patients, leading to a $10.9-million deficit for 1990. The losses are expected to be even greater this year because the state cut Orange County’s Indigent Medical Services (IMS) allotment by 55%, or about $13.5 million, and the supervisors chose not to make up any of the lost funds.

The county had been reimbursing hospitals 22 cents for every dollar they spent to care for the “working poor”--those who have no health insurance, but are not poor enough to qualify for other state or federal funds. The reimbursement may be trimmed to 15 cents on the dollar this year because of the state budget cut.

UCI Medical Center, one of five teaching hospitals in the UC system, takes in both Medi-Cal patients and those who qualify for the state-funded Indigent Medical Services. Unreimbursed costs at the hospital have risen to $29.3 million per year.

The University of California Board of Regents, the governing body for the nine-campus system, has been talking of closing UCI Medical Center since its last meeting three weeks ago, when reports revealed that the hospital continues to operate in the red. Faced with its tightest budget in 20 years and the possibility of having to raise student fees by 20%, the board may have no choice but to shut UCI Medical Center, some of the regents said.

The issue of closing the hospital is expected to be discussed at a meeting Thursday, when the regents gather to adopt UC’s 1991-’92 budget.

“We simply can’t keep funding what is truly a county hospital,” said Roy T. Brophy, chairman of the Board of Regents. “It’s not the job of the UC system to take education funds and use them to pay for indigent medical care.

“It’s the responsibility of the county, and if they don’t want to take care of it, we won’t assume that burden. We’re certain that we can’t keep passing up the option of closing down the hospital.”

Chauncey Alexander, chairman of the United Way Health Care Task Force, said it would be a “disaster” if UCI Medical Center shuts its doors.

“It would have a domino effect on the medical community,” he said. “Those (indigent) patients would have to be scattered out to all the other hospitals, and a number of those are already on the ragged edge themselves.”

Brophy and others insist that talk of closing UCI Medical Center is not an idle threat intended to wring money out of the county. “The mood has been that we’re going to explore every option to get rid of this mess,” Brophy said.

Some of the other options include dropping out of the Indigent Medical Services program, closing down the emergency room--as other hospitals in the county have done--or joining in a lawsuit that other hospitals are rumored to be considering to try to get the county to restore indigent care funds.

Alexander said he thought that it was unlikely that UCI Medical Center will shut down completely. Talk of the closure, he said, is a sign of how frustrated hospital and university officials feel about the county not coming through so far with more financial support.

“I would call it a John Wayne standoff because basically that service is so significant to the community that it would be impossible to do without it,” he said.

Dr. Stanley van den Noort, former dean of the UCI Medical School, noted that Orange County has few other alternatives for indigent patients because there is no county hospital.

“Los Angeles has a sense of public responsibility,” he said. “They run three county hospitals all by themselves. San Francisco County runs its own hospital.”

Supervisor Gaddi H. Vasquez said that while county officials do not want to see the hospital close down, they don’t know where they would get the money to save it. The county has its own budget problems, caused in large part by $29 million in cuts passed along from the state last fall.

“Obviously, UCI (Medical Center) is important to our system, and so we will certainly do everything in our power to address the concerns of the system and the regents,” said Vasquez, chairman of the Board of Supervisors. County staff members have been directed to examine options for solving the problem, and a possible solution may be developed by the supervisors’ next meeting on Feb. 19, he said.

The cuts in state funding will be a critical blow to UCI Medical Center’s finances because it took care of 60% of the county’s 24,000 poor and uninsured patients, even though it accounts for just 6% of the hospital beds.

In the last few days, the regents and other UC officials have been appealing to county and state officials in letters and phone calls to reinstate some of the cuts in funding to health care for the poor. In one letter, the regents called UCI Medical Center “a financially bankrupt institution.”

UCI Chancellor Peltason wrote the supervisors to urge them “to take an active financial and leadership role in indigent care if the University is to continue to operate the Medical Center.”

Supervisor Harriett M. Wieder is heading a newly formed county health task force composed of public and private health-care providers in the county to study possible solutions to the funding problem, such as ways to better distribute the burden of caring for the poor among all hospitals in the county.

“We don’t want to see (UCI Medical Center) closed, and they don’t want to see it closed,” Wieder said. “Many good people want to resolve the problem. Right now, our health agency and the county are assessing and evaluating our ability to assist. Recognizing that we are experiencing a shortfall, this is something we need to know more about. . . . But throwing money at something is not always the solution.”

Wieder said she thought county officials are no longer “in an adversarial position” with hospital and UC officials, but interviews with members of the medical community and the UC system indicate otherwise.

Van den Noort, the former UCI Medical School dean, said the funding problem may be one of the supervisors’ priorities, since the board has managed to raise money for other projects, such as a new jail. State officials will be reluctant to help out hospitals here because they don’t see county supervisors coming up with any local support.

“So the state of California is not very sympathetic,” van den Noort said. “If I were the state, I’d hold up everything till the county puts up the money to take care of the poor.”