Rebuilding of County-USC: New Thinking Is Essential

Since the Northridge earthquake seriously damaged County-USC Medical Center in 1994, the county Board of Supervisors has been unable to agree on a plan to replace the facility, whose 2,000 beds make it the largest hospital on the West Coast. The long months of indecision may be coming to an end, however, in the face of a threat by the Federal Emergency Management Agency to withdraw its pledge of $462.7 million to help build a new hospital on the Boyle Heights site. The board has promised to take up the issue Wednesday.

If the supervisors are to make progress, they will have to put aside their disagreements on rebuilding options, which range from a hospital of 391 beds to one of 750. First, they need to find common ground on two fundamental questions: How many people must the county treat at its central public hospital, given its legal obligation to provide medical care for all those without public or private health insurance? And how can the county work creatively with the private sector and state and federal officials to shift more patients from public hospitals to private facilities and community health clinics?

These are the hard questions. The issue is not so much about mortar and medicine, it’s about the right of the working poor and disadvantaged to get adequate care.

On one point all the supervisors agree: Of the 830 inpatients treated at County-USC on any given day, the county is legally obligated to treat without charge at least 320 or so who lack insurance. Disagreement begins over how many of the remaining 510 patients--those with Medi-Cal, Medicare and other forms of public insurance--can be treated at private hospitals and clinics instead of in a big central hospital.

Proponents of a small new County-USC (391 to 500 beds) argue that the private hospitals will want these patients because their public insurance provides a considerable source of revenue. While patients with public insurance like Medi-Cal were once paltry income sources, they have become attractive to many private hospitals because managed care has reduced once-lucrative private insurance income.

The county’s private hospitals, however, have proved less eager to take on public insurance patients than the proponents of a small County-USC had expected. That’s because they still view many kinds of Medi-Cal and Medicare patients (the disabled, the infirm elderly and those with chronic ailments requiring unusual care) as far too expensive to treat.

If the county builds small and tries to force private hospitals to assume more of the responsibility of caring for the county’s 2.7 million uninsured, some private hospitals in the region say they may have to shut down. Yet it’s worth remembering that the same doomsday scenario was used by private hospitals years ago when they didn’t want to take the Medi-Cal patients they now covet.

It’s true, however, that private hospitals lack the resources and facilities to provide some of the highly skilled services that County-USC offers--neonatal intensive care, for instance, or locked wards for jail patients. A 391-bed hospital, then, is clearly too small to care for all the patients who lack insurance as well as some patients with insurance.

On the other hand, the 750-bed facility proposed by county health director Mark Finucane and championed by the private hospitals and Supervisor Gloria Molina is too large: Its $555-million building cost and exorbitant operating costs would clearly strain the county.

The current system is grossly inefficient: A huge central edifice, County-USC, is the primary public health care provider for patients up to 35 miles away, many of whom have to take several buses to make the journey. There’s no good reason many with treatable illnesses can’t be cared for in private hospitals and the county’s outpatient clinics.

Most sensible would be a facility of about 600 beds. Its building cost of $483 million could be financed with current revenues and its operating costs would be much lower than those of the 750-bed facility. That’s why the county’s chief administrative officer, David Janssen, was right to recommend it to the supervisors in a memo last week. In addition to allowing the county to meet its legal responsibility of caring for those without insurance, a 600-bed hospital would serve those patients with insurance who are not welcome elsewhere and guard against future contingencies like a recent state law mandating new seismic standards. The law is expected to create a substantial shortage of “safe” private hospital beds in the region by 2008.

The supervisors’ job doesn’t end with choosing an appropriate size, however. It’s essential they work closely with private hospitals, bringing them to the negotiating table rather than pushing them to the breaking point in what should be an era of public/private partnerships.

In the last three decades, 32 California counties have privatized their public hospital operations, with mixed success. In San Diego, for instance, privatization has reduced county health care costs by 40% but also put severe financial burdens on private hospitals and led to the denial of care in some expensive medical specialties like orthopedics and neurology.

The L.A. supervisors should learn from past examples. But they will have to innovate too: for instance, by lobbying state and federal officials to create insurance-pricing pools that encourage small businesses to offer health insurance to their employees. Long-term health insurance for the county’s working poor is the key to a health care system that functions well. caption: