Cuts May Not Rescue Area's Hospital : Palmdale: Despite laying off 100 workers, reducing services and beds, the facility's administrator says it will continue to lose money.

TIMES STAFF WRITER

The administrator of Palmdale's only hospital, still struggling under a new owner, predicted the hospital will continue to lose money despite moves Tuesday to lay off 100 employees, curtail emergency room services and reduce its number of beds.

Tuesday was the final day of work for about 50 full-time and 50 part-time employees, many of them nurses, at the 123-bed Palmdale Hospital Medical Center. Those reductions, plus 35 other jobs cut Sept. 1, have trimmed the hospital's original 435-member work force to about 300.

In other changes, hospital officials said they now plan to restrict their emergency room to patients needing urgent care, referring lesser cases elsewhere. The hospital has medical guidelines that will determine which cases are urgent. The hospital predicted that would result in a 40% cut in the 1,500 to 1,600 monthly patients who have been treated in the emergency room.

And, Chief Executive Officer Steve Schmidt said the hospital plans to at least temporarily stop operating 26 of its 123 licensed beds, in part by utilizing a state provision that allows the suspension of licensed beds for up to two years. Schmidt said the hospital will operate 97 beds.

He blamed the hospital's layoffs and cutbacks on the continuing recession and the hospital's unexpected loss of its state Medi-Cal contract when its bankrupt prior owner sold the hospital last month for $4.5 million. State officials said they wanted to renegotiate the terms of the Medi-Cal contract.

Schmidt also said he could not promise there will not be any further hospital staff reductions. He said the latest round of layoffs "will minimize the losses at the hospital"--which had been averaging $300,000 a month this year. But he added, "We're still not at the break-even point."

Medi-Cal patients had accounted for about one-third of the hospital's business, Schmidt said. Losing the Medi-Cal contract cut the hospital's occupancy rate from the mid-40% range down to about 30%, Schmidt said. Most hospitals need rates above 50% to remain profitable, he added.

The new owner of the Palmdale hospital is negotiating with state officials to renew the Medi-Cal contract, but neither side would predict the likely outcome. A state Health Department spokesman confirmed the contract's termination was not due to any disciplinary action.

The Palmdale hospital was sold in August to Pasadena-based Paracelsus Healthcare Corp., a chain that already operates the nearby 132-bed Lancaster Community Hospital. The seller was Orange-based Affiliated Medical Enterprises, whose assets are being liquidated through bankruptcy.

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