Report Urges Scaling Down of County-USC

Los Angeles County should abandon plans to construct a $1.2-billion replacement for its deteriorating and unsafe County-USC Medical Center and instead build a sharply scaled-down version of the nation’s biggest public hospital, according to a newly released consultant’s report.

The study by San Francisco-based consultant Harvey M. Rose urged the county to replace the giant medical center, now licensed for 2,045 beds, with a 788-bed hospital. The county has been planning a 946-bed replacement for County-USC, which was heavily damaged in last year’s Northridge earthquake and now uses only about 1,000 beds.

The county has sought for several years to build a new hospital as part of a $2.2-billion plan to replace or upgrade its vast and aging system of charity hospitals and clinics. But that sweeping plan was put on hold this year as the county became mired in an unprecedented budget crisis, and its future is uncertain.

Supervisor Zev Yaroslavsky, who requested the report, said it “stopped dead in its tracks a plan that would have bankrupted the county.”

He said USC Medical School officials told him that the hospital could be rebuilt with as few as 400 to 500 beds without jeopardizing public health.

The Rose report “validates that we need less beds, not more beds, in our hospital system,” said Yaroslavsky, adding that its recommendations dovetail with county efforts to downsize its health care system and emphasize treating patients in clinics, rather than more expensive hospital beds.

Some observers said Wednesday that no matter how much it is scaled down, the effort to replace County-USC is likely to remain stalled for some time.

“How is the county going to finance it?” said David Langness, spokesman for the Healthcare Assn. of Southern California, which represents private hospitals. “It’s a billion-dollar project. . . . L.A. County is out of money and nobody is going to loan money for hospital construction these days.”

But Board of Supervisors Chairwoman Gloria Molina said the county has no choice but to replace the hospital, which violates a number of state safety codes. She said state regulators have allowed it to stay open only because the county has pledged to correct those deficiencies.

“With the [budget] crisis we’re in, I know people are going to say, ‘Why are you doing this?’ ” she said. “Realistically, County-USC is the centerpiece of the county health care and trauma system.”

Besides recommending a smaller County-USC, Rose warned supervisors that their financial troubles, combined with cuts in federal and state reimbursements for health care, are likely to force them to make tough decisions about reducing care for the millions of county residents now eligible for it.

Although county facilities treated 763,000 people in 1993-94, Rose noted a little-publicized Superior Court ruling that said the county is legally responsible for providing care only to the 90,000 residents who receive general relief payments. That ruling has been appealed.

In addition to what county officials say was earthquake damage extensive enough to shut down its pediatrics pavilion and psychiatric hospital, County-USC violates fire and evacuation codes and some of its wards are obsolete. The county pays $2 million a year for around-the-clock sentinels to watch for outbreaks of fire in the medical center’s General Hospital and Women’s and Children’s Hospital, which have no sprinklers.

The Rose review said the county probably will receive $300 million to $500 million from the Federal Emergency Management Agency for earthquake damage to various county health facilities sustained last year. County officials have said they expect $360 million, but FEMA has questioned some of their reimbursement requests.

Despite uncertainty about building a new hospital, county officials already have purchased and torn down more than a dozen Boyle Heights homes and relocated an AIDS clinic and other facilities to make way for the replacement project, which has cost about $120 million since 1992.

The Rose study, which cost $480,000, said demand for county health services will continue to be strong from the 4.4 million county residents who either have no health insurance or are covered by Medi-Cal, the joint state and federal program for the needy.

The consultant said a 788-bed replacement hospital would “provide the county with the most flexible system practical” at a time when it is experiencing severe budget problems and congressional Republicans are seeking large cuts in the Medicare and Medicaid programs. With anticipated reductions in federal and state funding, the county could lose $2.8 billion in the next seven to 10 years, Rose said.

The report did not indicate how much it would cost to construct a 788-bed hospital. A Rose spokesman said the firm would release that figure only to the supervisors, if requested.

The report said the countywide $2.2-billion reconstruction plan “presents considerable risk to the county.”

Some financing assumptions made by county planners are flawed, the study said, and the county could wind up shelling out more than $173 million annually from its general fund to pay for the upgrades.

Langness, of the health care association, suggested that the county could buy a nearby private hospital, such as White Memorial, instead of trying to rebuild County-USC.