Tustin Hospital Closing; 300 Will Lose Their Jobs
Tustin Hospital Medical Center, a low-profile acute-care institution, is being closed, and 300 workers will lose their jobs, officials said Wednesday.
The hospital’s owner, Healthcare America Inc., an Austin, Texas-based firm in bankruptcy reorganization, agreed this week to sell the hospital and its 9.5-acre site to G&L; Realty Corp., a Beverly Hills real estate investment company.
The buyer plans to convert the institution at Newport and Sycamore avenues to a nursing home, long-term care facility or a hospital with limited services, said Steven Lebowitz, G&L;’s president. Two medical professional buildings on the site will be kept open, he said.
The 183-bed hospital, which opened in 1972, was sold in 1986 to Healthcare International Inc., the Austin-based predecessor of Healthcare America.
Hospital sources attributed the institution’s troubles to a misguided business strategy attempted by its parent company a decade ago. The hospital aimed to attract a well-heeled clientele who could afford top-of-the-line service, ignoring managed care plans that sought discounts in exchange for sending members there.
Top management “wanted it to be a food-under-the-brass-tureen, white linen-type hospital, catering to Irvine executives,” said Dr. Jerry Hamm, chief of the hospital’s medical staff, who worked there 18 years.
Unfortunately, officials say, the market for managed care greatly expanded, while the executive market never materialized. By the time the hospital realized it had to deal with managed care plans, it was forced to negotiate less favorable contract terms than competing hospitals.
What’s more, the hospital, despite its size, failed to make a mark in the community. Officials say many residents of Tustin and surrounding communities don’t even know it exists. It had trouble competing for patients with Western Medical Center-Santa Ana and Irvine Medical Center.
Though it has provided emergency room services, surgery, alcohol rehab services and treatment for teens with alcohol and drug problems, officials say the hospital’s closing won’t leave the area underserved because of the proximity of other institutions.
Tustin Hospital closed its emergency room Wednesday afternoon and stopped accepting admissions. A hospital official said scheduled outpatient surgeries will be completed over the next few days.
The 300 full- and part-time workers destined to lose their jobs include managers, nurses, technicians and maintenance staff. Most of the 300 doctors on staff have privileges at other local hospitals.
G&L;’s Lebowitz says the deal will be in escrow for 45 days. Assuming it proceeds, workers will be laid off before the hospital’s parent company hands him the keys.
“All the people who are leaving are not my problem,” he said.
