County Might Outsource Hospital

Times Staff Writers

The Los Angeles County Board of Supervisors may hand over Martin Luther King Jr./Drew Medical Center to a private company after nearly two years of failed attempts to correct patient care lapses and mismanagement at the beleaguered public hospital.

County supervisors, who ordered a study of the idea last month, now are giving it new urgency after yet another federal government inspection found medical errors, misconduct and a troubling death at the 33-year-old hospital south of Watts. A vote could take place as early as August, and at least three of the five supervisors -- Mike Antonovich, Don Knabe and Zev Yaroslavsky -- express some support for the idea.

Antonovich said county health department leaders for months have assured the board that the millions spent to overhaul King/Drew were paying off.


“And then the [health] inspector comes in and tells the authorities that this is an illusion, you’re delusionary,” he said Monday. “The only way to save the facility is to outsource it.”

Knabe said: “We need to have a Plan B. We’ve tried everything.”

“The only way” to completely fix King/Drew, he added, “is to shut it down for a while, to get new people in there, and to change the culture of the entire hospital.”

But some hospital experts doubt the county could find any qualified takers for the job. Officials of Catholic Healthcare West, the hospital chain most often mentioned as a potential candidate, did not return telephone calls seeking comment.

The county’s latest escape plan comes as state officials consider steps that could remove the decision from local hands.

The state Department of Health Services is trying to figure out at what point the hospital’s continued violations of state law outweigh the harm that may be caused by closing it, said Brenda Klutz, the agency’s deputy director of licensing and certification.

“We continually ask ourselves if we’re doing enough when reviewing the situation at King/Drew,” Klutz said.

Among the options under review by state officials are forcing the closure of some patient care units, suspending King/Drew’s license or revoking it, which would force the hospital to close.

Despite some improvements, Klutz said, “we have very serious concerns about some areas in the hospital.”

If the county were to contract with a private company to operate the hospital, it could pay the company a fee to cover the costs of providing care to the uninsured, but otherwise give up any role in hiring, firing or contracting decisions.

It is possible, officials say, that King/Drew would have to close temporarily while the transition took place to allow the outside company time to hire a staff. Some members of the hospital’s advisory board fear that if it closes, it won’t reopen.

In the latest inspection, which was completed Friday, federal officials cited several major medical errors, including a patient who waited to be seen in King/Drew’s emergency room for more than 13 hours in January without a medical screening. He later died of a dissecting aneurysm -- a tear in a weakened blood vessel.

The aneurysm had been visible on an X-ray taken by King/Drew staff two years ago, but it was never diagnosed by them, according to a memo to supervisors from Fred Leaf, the health department’s chief operating officer.

The Times obtained a copy of the memo.

The inspectors also faulted two nurses who gave a narcotic by epidural to a 9-month-old baby. Not only were the nurses not allowed to perform such a procedure, which is typically performed by an anesthesiologist or specially trained nurse, but they never obtained consent to do it and falsified patient records, Leaf’s memo said.

The nurses were removed in May. The hospital’s pediatric intensive care unit was closed after the incident because King/Drew could not find other qualified nurses to step in, health department officials said.

In addition, the inspectors found there were “still too many pharmacy errors and too many cases of drugs being administered late,” Leaf’s memo said. Those same problems have been noted in several previous reports from the U.S. Centers for Medicare and Medicaid Services.

The county health department recently promoted Amy Gutierrez, King/Drew’s longtime pharmacy director, to countywide director of pharmacy services. County health officials said she was the best candidate for the position despite continued questions about the competency of her staff and oversight of the pharmacy.

The recent seven-day inspection was prompted by, among other things, 18 patient complaints. Though “efforts are being made” to fix King/Drew, Leaf quoted inspectors as saying, “It is not solid or sustainable yet.”

Leaf based his memo on a meeting that took place Friday when the inspectors completed their review. A more formal written report is expected within weeks. In the past, the written reports have been harsher than preliminary summaries provided by county officials.

If the federal Medicare agency is not satisfied that King/Drew is fixing its problems, it can cut off $200 million in funds to the hospital, which would effectively close it.

The county has been working to turn around King/Drew since the summer of 2003, but thus far nothing has stopped revelations of serious medical blunders and misconduct by hospital staff. In late 2003, the county health department put its own team of top managers in the hospital for a year. When that didn’t work, it hired outside consultants from Navigant Consulting to recommend changes and implement them at a cost of $15 million this year. The problems have continued on Navigant’s watch.

The Board of Supervisors has also closed the hospital’s trauma center and formed an advisory board made up of healthcare experts. And all told, the county has disciplined hundreds of King/Drew employees.

The idea of turning over the hospital to an outside company has become more prominent as those other efforts to fix the hospital’s problems have fallen short. But the idea faces several legal and practical obstacles.

County lawyers are studying whether the supervisors can legally transfer control of King/Drew to a private company or whether that would amount to an illegal gift of public funds. They are also studying what would happen to King/Drew’s workforce -- whether the new firm would have to employ them or whether they would have to be transferred.

The outsourcing arrangement would differ significantly from the county’s temporary contract with Navigant, which reports to the county health department and has the power to make recommendations but cannot hire, fire or enter into contracts on its own.

Dr. Thomas Garthwaite, director of the county Department of Health Services, said he is open to turning over the hospital to a private company that isn’t bound by county rules and regulations, including Civil Service protections that make it harder to fire workers.

“There’s a lot of things we can’t do that potentially another hospital system could do,” he said. “It’s still a long ways to get someone to want to do it.”

Jim Lott, executive vice president of the Hospital Assn. of Southern California, agreed.

“Who would the takers be?” asked Lott, who also is a member of the county’s new Hospital Advisory Board. “I’m not sure I know of any capable, qualified organization that wants to take that on. There’ll always be a fly-by-night group that wants to do it.”

Lott said he had talked to one interested and capable company, but that the political climate and the hospital’s troubled relationship with its affiliated medical school, Charles R. Drew University of Medicine and Science, has caused that company’s interest to wane.

Dr. Hector Flores, who heads the advisory board, said he was encouraged by Navigant’s progress and said it needed more time to make changes. “You don’t want to change horses in the middle of the stream.”

But Antonovich said he believed he had enough votes on the board to turn the hospital over to a private company. Last week, before the latest inspection was complete, Yaroslavsky called that idea “very much alive,” adding that “our current strategy is not sustainable.”

“We’ve spent tens of millions of dollars on this hospital to turn it around,” he said. “We have to be honest with ourselves and with the community that if we cannot do that, we’ve got to go another way. And if we have to go another way, the sooner we do that the better.”

Supervisor Gloria Molina could not be reached for comment, but a spokeswoman said she had not ruled out the idea.

Supervisor Yvonne Brathwaite Burke, whose district includes King/Drew, said she didn’t know how such an arrangement would work. She said she was aware of situations in which hospitals have contracted out their pharmacies and emergency rooms, but not their entire facilities. “Someone would have to explain to me how it works,” Burke said. “I’ve never seen anything done that way.”