L.A. County Seeks Private Hospitals’ Help

Frustrated by the sagging economy and pessimistic that voters will approve a massive public hospital building project, Los Angeles County officials have quietly turned to private hospitals for help in alleviating overcrowding at county hospitals.

In the last week, the county Department of Health Services has mailed letters to 141 private hospitals, proposing to lease beds or contract for specific health care services as an alternative to building hospitals.

The move represents a potential marriage of convenience between private and public hospitals in Los Angeles County, which historically have gone their separate ways. While the county’s six public hospitals struggle with more patients than they can handle, private hospitals here are only half-full, a fiscally perilous condition that may force some of them to close this year, according to Anthony J. Abbate, a senior vice president of the Hospital Council of Southern California.

The letters from county Health Director Robert C. Gates are a tentative first step toward a mutually beneficial solution, observers say. Such public-private partnerships may also be the county’s only option.

The Board of Supervisors has taken an increasingly skeptical view of voters’ willingness to approve a $2.3-billion bond issue--possibly to be placed before voters next year--to finance the proposed hospitals for the poor. Included in the plan are a replacement for dilapidated County-USC Medical Center, a 350-bed hospital for the San Gabriel Valley, and 100-bed additions to Harbor-UCLA Medical Center in Torrance and Olive View Medical Center in Sylmar.

“It is a pipe dream for us to believe a bond is going to go through given the economy and the way people are feeling right now,” said Kathryn Barger, health deputy to Supervisor Mike Antonovich, who has led the board in pushing for alternatives to new hospital construction.

The financial prospects for health care grew even gloomier last week when it was disclosed that the Wilson Administration might cut up to 15.5% in state health care funding next year.

“There isn’t going to be any new money in the system for the next two or three years: not from the state, not from the feds and certainly not from the county,” said Dr. Robert E. Tranquada, chairman of the county’s Task Force on Health Care Access and an adviser to the health department on the hospital building project. “So we must look at ways to make better use of existing resources or look at new resources that have not previously been made available to people in need.”

Partnerships between the public and private health care sectors are a growing trend nationally, experts say. Hard times in the health care economy have spurred public-private ventures in several urban areas and many more are entering the discussion stages, according to Richard H. Wade, a senior vice president of the American Hospital Assn.

In Phoenix, for example, a consortium of Catholic hospitals has set up a health maintenance organization for state Medicaid patients, using the combined resources of their outpatient clinics and inpatient facilities. These publicly insured patients are often shunned by private hospitals and doctors, because Medicaid (called Medi-Cal in California) pays too little.

Wade attributes the trend to “gridlock” in Washington on health care reform. Simultaneously, the recession has swelled the ranks of poor and uninsured Americans, forcing local public and private health officials to rethink business as usual.

In Los Angeles, business as usual over the last decade meant poor people went to the public hospitals while private hospitals competed for those with generous health insurance coverage. Today, however, Los Angeles County has an estimated 2.7 million uninsured residents, and increasingly cost-conscious private insurers are striving to reduce the length and frequency of hospitalization. As a result, private hospitals have empty beds--a extremely unhealthy financial condition.

“If a hospital is designed for 300 (patients) and you only have 100,” utilities and other overhead costs still must be covered, said David Langness, a Hospital Council vice president. According to Langness, the council has been lobbying county health officials for the last two years to persuade them to use private hospital facilities for public patients.

County officials stress that the proposed talks with the private hospitals do not necessarily mean they have abandoned the hospital construction plan. But there are indications that it could be scaled down considerably if it goes forward at all.

“The range of possibilities is a hybrid, (from) a new hospital (to) none of the above,” said Robert Kuziara, a member of county Chief Administrative Officer Richard Dixon’s health policy staff.

So far, more than a dozen hospitals have indicated an interest in discussing the idea, according to the Hospital Council.

One of them is California Medical Center in Los Angeles. It has as many as 100 beds that could be placed at the disposal of county patients, according to hospital president James T. Yoshioka, who immediately wrote Gates saying he was interested in talking partnership.

California Medical Center already has experience in such ventures. Two years ago, the hospital joined an innovative effort put together by the Health Department, Hospital Council and the Los Angeles County Medical Assn. to alleviate overcrowding in the obstetrical units of county hospitals. Today, 40% of California Medical Center’s admissions are county maternity patients.

Yoshioka said the county pays enough to let the hospital break even on the care of these patients and to compensate obstetricians on the hospital’s staff. Whether the county can afford to do that for other patients will be key to private hospital interest, he said.

“You are always willing to talk when you have empty beds,” Yoshioka said. “The question is: Is it feasible?”