South Bay Hospital Tries to Expand Network of Physicians, Insurers

As Congress considers how to reshape the country’s health care system, South Bay Hospital is looking to improve its ties to the large physician and insurer networks that are expected to flourish under the medical reform effort.

At its meeting tonight, the board of the Beach Cities Health District, the public agency that owns the 203-bed hospital in Redondo Beach, is scheduled to pick a consultant to study how the hospital can join more networks.

The consultant’s fees, expected to be between $130,000 and $150,000, will be paid by the district and by American Medical International, the for-profit company that operates the hospital.

The study is timely because the medical field is already becoming dominated by networks of physicians and insurers, district officials said. Currently, many beach cities residents cannot use South Bay Hospital because their insurance plans have arrangements with hospitals elsewhere, said Robert L. Riley, the health district’s executive director.

“It’s a community hospital, and it should be accessible to community residents,” Riley said.

Dennis R. Bruns, the hospital’s chief executive officer, said that although the facility has arrangements with a number of health plans, it lacks contracts with roughly 10 “major players” that cover many beach cities residents.

“We’re a community hospital, and the community wants to come to our hospital, but they can’t, because we don’t have the contracts,” Bruns said.

“We think we can be very competitive,” Bruns said. “What we want (the consultant) to tell us is how we can go about that.” He said a new fitness center is among the many improvements at the hospital.

Richard L. Fruin, president of the district’s board, said the study was proposed to the district by American Medical International. “The health-care services environment is changing,” Fruin said. “We want to make sure that we understand the changes and the opportunities that the changes provide.”

He said the bulk of the study probably would not be made public because it could contain confidential information about American Medical International plans.

The hospital district was formed nearly 40 years ago to build a community hospital serving Redondo Beach, Hermosa Beach and Manhattan Beach. Then, in 1984, the district rented the hospital to the medical business group on a 30-year lease.

In return, the district receives about $3 million a year in rent. It uses the interest to fund health-related programs in the three beach cities.

Plans for the study come in the wake of a shake-up on the elected board that runs the district.

The medical firm had proposed last year that the district pump $15 million into the hospital over five years to pay for improvements and for the treatment of uninsured patients. But beach cities voters appeared to reject that plan in the November election by electing three new members to the five-member board, all of whom opposed the $15-million proposal.

This week, board membership changed again in the wake of the resignation of Dr. Gerald L. Looney, one of the three new members. To replace him, the board elected Thomas Martin, longtime administrative assistant to State Sen. Robert G. Beverly (R-Redondo Beach).