Private Hospitals Rush to Take Over County Clinics

Private hospital executives hurriedly hand-delivered bids Thursday to take over county medical clinics, saying it will be cheaper to lose money on the facilities than have hospital emergency rooms flooded with uninsured sick people when the clinics are closed.

County officials said private hospitals and other care providers turned in dozens of proposals by a 4 p.m. deadline to run county-owned clinics that provide prenatal care, AIDS testing, childhood vaccinations, treatment for tuberculosis and other services to hundreds of thousands of low-income residents.

The county plans to close 28 of 39 clinics and most outpatient services at its six hospitals Oct. 1 to help bridge a massive budget deficit that may force a drastic downsizing of the nation’s second-largest public health system run by local government.

The bidders included some of Los Angeles’ best-known hospitals, including Childrens Hospital, St. Joseph Medical Center in Burbank and Queen of Angels/Hollywood Presbyterian Medical Center.

County health czar Burt Margolin and other county officials hope to blunt the impact of their budget cuts by turning some or all of the clinics scheduled for closure over to outside contractors. Because the budget crunch is so severe, private care providers were given only nine days to submit bids, and many complained of not being able to obtain details on the clinics’ operating costs.

But the uncertainties did not prevent private health care providers from submitting about 100 proposals to take over clinics and hospital outpatient services. Among the largest bidders was a consortium of at least 11 San Fernando Valley hospitals and physicians’ groups that wants to assume management of seven nearby county clinics.

The group wants to set up a private corporation to take over and operate clinics from Canoga Park to Burbank. It hopes to tap the California Wellness Foundation and other local charities for operating funds.

However, Gary Yates, the head of the Wellness Foundation, which has assets of $845 million, said earlier this week that his group has made no decision about whether to commit its funds, although it is interested in trying to help ease the county health crisis.

Among other large-scale bidders was Daniel Freeman Memorial Hospital in Inglewood, which is interested in taking over five clinics, either on its own or with other private providers.

Peter Bastone, president and chief operating officer of the nonprofit hospital, which is run by an order of Catholic nuns, said it expects to lose at least $250,000 annually by running the county clinics.

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But, he said, “It’s going to be more costly to have these [county] patients hit our emergency room than to tithe ourselves and keep the clinics open.”

Another nonprofit hospital, Queen of Angels/Hollywood Presbyterian Medical Center, said it had bid on six clinics whose combined annual operating budget is $5.5 million.

Bob Steward, the hospital’s vice president of public affairs, said taking over the clinics would “extend our mission” to care for poor residents. He said the hospital already has close relationships with 10 private medical clinics.

Bastone said he knew some private health care providers were bidding in an effort to make money by acquiring county patients covered by Medi-Cal, the state’s insurance program for the poor. But he warned that turning a profit was highly unlikely because about two-thirds of the county’s patients have no insurance and cannot otherwise pay for medical care.