Valley Hospital to Close, Another May Cut Services

One San Fernando Valley hospital will close, and the owners of another are considering shutting down, pushed by new earthquake repair laws and continued changes in the health-care system.

North Hollywood Medical Center--which employs 250 people and runs a full-time emergency room--will close, its for-profit owner, Tenet HealthSystem, announced Thursday. And Kaiser Permanente, faced with a massive earthquake repair bill at its Panorama City hospital, is considering closing all but outpatient operations there, the giant health-care provider said.

State regulators said the shutdown of North Hollywood Medical Center had been expected for some time. County health analyst Mario Reyes, who reviewed the recent sale of Hollywood-Queen of Angels Hospital from its not-for-profit owners to Tenet, said closing the North Hollywood facility will not greatly affect the region’s trauma system nor indigent residents’ access to health care.

Kaiser, meanwhile, faced with a massive repair bill from the 1994 Northridge earthquake and new, stringent state requirements for seismic retrofitting, has begun preliminary discussions with federal officials about closing its 325-bed facility in Panorama City.

Spokesman Jim Anderson confirmed Kaiser has entered into preliminary discussions with the Federal Emergency Management Agency to end overnight hospital operations at the 36-year-old facility.

Rep. Howard Berman (D-Mission Hills), whose district includes the Panorama City facility run by Kaiser, said Thursday that closing the hospital would severely impact health care in the east San Fernando Valley.

“I’m working to try to stop this as soon as possible,” Berman said.

FEMA is involved in the discussions because it has committed $66 million for earthquake repair and seismic retrofitting at the facility, and Kaiser will request that the money be shifted to other hospitals if Panorama City closes, Anderson said.

“There have been some discussions about the possibility” of closing the hospital, Anderson said.

He characterized the discussions, however, as “very preliminary” and said no formal application had been filed to close the hospital.

This is not the first time Kaiser has considered shutting one of its hospitals, only to decide against doing so because of financial, legal and community pressures. The company, for instance, recently decided against closing its mammoth Sunset Boulevard hospital in Los Angeles.

Under state and federal law, a managed-care company such as Kaiser may not simply shut down a major hospital without providing a nearby alternative for its members to use, according to state and county regulators.

“Kaiser has to meet extremely stringent regulations regarding access for HMO members pursuant to state and federal law,” said Jim Lott, president of the Health Care Assn. of Southern California. “They cannot restrict access without being heavily sanctioned.”

Berman has asked FEMA not to allow Kaiser to shift the earthquake repair funds to other facilities, and said in an interview that shutting the hospital would leave Kaiser customers in the northeast Valley without a nearby facility capable of handling urgent care.

Berman said that because the funds were earmarked for the Panorama City facility, they should stay there, and that neither he nor taxpayers should be party to their “misuse.”

If Kaiser shuts the Panorama City facility, Anderson said, the managed-care provider would contract with other hospitals to treat members who need overnight care.

“The patients who need overnight hospital stays will either be served at a rebuilt Panorama City facility or a hospital in the same geographic community,” Anderson said.

Together, the new economics of health care and the cost of seismic retrofitting are expected to put dozens of hospitals out of business over the next several years, said Lott, whose organization represents local health-care facilities.

Seismic requirements are expected to reduce the number of buildings devoted to health care by 28%, and changes in health care will very likely close five to six hospitals in Greater Los Angeles per year over the next five or six years, Lott said.

At North Hollywood Medical Center, it was financial considerations, not earthquake repairs, that prompted its corporate owners to shut.

The hospital’s financial base had been “eroded” by reduced fees for medical care and a reduction in the number of doctors who referred their patients to North Hollywood for care, the company said in a news release Thursday.

The hospital will close completely Aug. 31, but several departments will stop admitting patients in the four weeks prior. The emergency room and psychiatric unit, for instance, will close Aug. 3, and obstetrics will close Aug. 8.

The skilled nursing facility, whose 15 patients will be transferred to Encino Hospital or the Jewish Home for the Aged, will also close.

To replace some of the services, an urgent care facility will be opened next door and operated by Encino Hospital, which is also owned by Tenet.

“It’s a sad day,” hospital Chief Executive Officer Sonja Hagel said. “Not enough money is coming in, and without that, you can’t pay the bills.”

Times staff writer Phil Willon contributed to this story.