Kaiser Expected to Rebuild Damaged Hospital

Forced into a corner by a legislative gambit, Kaiser Permanente has agreed in principle to rebuild its quake-damaged Panorama City hospital rather than abandon the site, according to people familiar with its plans.

Representatives from Kaiser and federal and state agencies are set to hammer out details of the deal over the next several weeks. While Kaiser, the nation’s largest HMO, has yet to sign a final agreement, a spokeswoman said the company is “very optimistic” about the prospect.

The decision to rebuild the 325-bed facility marks a 180-degree turnaround from Kaiser’s position earlier this year, when it raised the possibility of closing the hospital and spreading the $68 million in federal quake repair dollars intended for Panorama City to other facilities.

While company officials said pooling the money with $160 million in grants offered to Kaiser for quake damage at two other Los Angeles-area sites would allow more flexibility in planning repairs, Rep. Howard L. Berman (D-Mission Hills) feared it would mean a shutdown of the Panorama City hospital and a loss of health care for local residents.

Loss of the Panorama City hospital emergency room also would have strained the San Fernando Valley’s emergency network by requiring longer ambulance trips and increasing the patient load at other hospitals, county officials said.

Berman crafted a plan to block Kaiser from spending the money anywhere except Panorama City and grafted it onto a federal spending bill. When it was passed by the House of Representatives, Kaiser was left with few options.

Kaiser officials met with Berman in his district office in August and expressed their willingness to keep the hospital open, a Berman spokesman said.

Now up for consideration is a plan in which the $68-million grant from the Federal Emergency Management Agency would be used as part of a construction plan expected to cost about $100 million.

Kaiser officials are expecting to complete the pact with FEMA in the next two weeks.

While cautioning that “it’s not a done deal,” FEMA coordinating officer Christina Lopez said, “I think their commitment is there. I know our commitment is there. It’s the best decision for the community.”

If signed, the deal would be the second repair plan undertaken by Kaiser in six months. In May, the company announced it would build a new hospital at the site of its giant medical center on Sunset Boulevard--its largest Southern California hospital--to meet new earthquake readiness standards.

Repair work and other construction at the Panorama City hospital is expected to be completed by mid-2007, with the hospital offering its current services while the work is underway, Kaiser officials said.

“We’ve always been committed to having a strong presence in the Panorama City community,” spokeswoman Katherine Saux said.

Berman did not see it in the same light.

“Kaiser had been seriously entertaining the idea of taking their inpatient care . . . and contracting it out to other hospitals,” he said.

Had the company been permitted to pool the grants, he added, “FEMA would’ve been helping to subsidize closing Panorama City.”