New Owners Work to Build Hospital Image

Irvine-based investors bought Pico Rivera’s only hospital this week, pledging to modernize it and restore obstetric and some emergency services to an institution that is losing money because almost no one is using it.

In January and February, fewer than 10 beds in the 95-bed Pico Rivera Community Hospital were occupied. About a week ago, only seven patients were checked in, according to members of an outside advisory committee. A hospital that size needs to keep about 40 beds filled to stay in business, administrators said.

The buyer, Tri Star Group, will reopen an obstetrics ward that was closed more than a decade ago and will resume some emergency services. Hospital officials had shut down the emergency room recently to save money.

One of the primary challenges facing the new owners, who also operate Alliance Community Hospital in Bakersfield, will be to restore confidence in the hospital, said Barbara Smythe, a member of the advisory committee.

“If there is an emergency or accident, people get transported to Pico Rivera, but it has not been the hospital of choice,” Smythe said. Smythe, the city’s director of senior services, said that most patients prefer to go to Beverly Hospital in Montebello or Presbyterian Intercommunity Hospital in Whittier.

The quality of care at the Pico Rivera hospital is fine, Smythe said “but the owners were not really managers. They were doctors. They didn’t have a clue about good public relations skills and how to administer a hospital.”

Former owner Dr. Eugene Patouillet said the hospital fell victim to increasing costs and competition from health-maintenance organizations, which offer discount rates for health services. “I meet my own former patients on the street, and they’re not mad at me, but they know I can’t see them for $2,” Patouillet said.

Patouillet was one of five doctors who took over the hospital a year after it was founded in 1959. Three of the original partners remained active in managing the hospital before this week’s sale.

“We used to have 23 doctors here and the place would be stocked full (of patients),” Patouillet said.

Nearly all members of the original staff have either retired or died in the 31 years of the partnership, and the hospital has had trouble recruiting new doctors.

“We were running the hospital at a loss. But there are a lot of longtime employees there. We were staying in business for them until somebody else could come along and take it over,” Patouillet said.

Among the must burdensome of the hospital’s costs was the emergency room. It lost about $500,000 each of the last three years, leading to its recent closure, said Christopher Wheeler, one of the new owners.

Emergency walk-in service will soon resume, but the hospital will no longer accept ambulance patients, because of the high cost of treating the indigent and uninsured, Wheeler said. The change in policy will save at least $200,000 per year, he said.

“Every hospital has got to step back and re-evaluate what it is and should be. The hospital tried to be all things to all people despite its size,” Wheeler said.

The main problems, however, have been ineffective management and uncertainty, Smythe and others said. The hospital formed a community advisory committee to improve its operation, then ignored committee recommendations, Smythe said.

In addition, the hospital has had at least three prospective buyers in the last six months and operated under persisting rumors of an impending shutdown, she said.

Committee recommendations ranged from trimming the hedges and sprucing up the building to “getting the hospital involved in the community rather than waiting for it to come to them,” Smythe said.

The committee also suggested publicizing special services. The hospital employed a bilingual social worker, for example, to visit and assist patients on a daily basis.

Committee members said city residents want to see their only hospital survive.

“People want to use the hospital,” member William Schifferli said. “It’s definitely needed for the service of health care in our community.”