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Westside hospital may slip into bankruptcy

Times Staff Writer

Brotman Medical Center, a key healthcare provider serving Los Angeles’ Westside, is expected to seek protection from creditors in Bankruptcy Court as early as next week, according to three executives familiar with the matter.

Administrators at the 420-bed hospital in Culver City have tried for months to avoid filing a bankruptcy petition but have continued struggling to pay its growing debt.

Brotman became the center of a firestorm last month when state health inspectors released a report finding that doctors and nurses failed to provide proper care to a mentally disabled woman, who died after a series of medical mistakes.

The medical center is expected to file under bankruptcy provisions that will give management more time to fix its financial problems.

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Brotman probably will trim or discontinue some services while it works to restructure its debt, which the hospital estimates is as much as $50 million.

The hospital, which would not confirm or deny the possibility of a bankruptcy petition, is not expected to close -- although that always remains a possibility in bankruptcy cases. The executives who provided the information asked not to be identified because the decision hadn’t yet been made public.

“Consistent with its efforts during the past several months, Brotman Medical Center continues to explore all options with respect to its financing and operations,” said hospital spokesman Charles Sipkins. “The hospital, including the emergency room, will remain open to meet the healthcare needs of our patients.”

The medical center’s financial woes come amid increasing concern about the financial stability of the region’s healthcare system. Growing numbers of uninsured, state-mandated staff ratios and increased pressure from insurers lowering reimbursement payments have pushed more and more facilities, especially smaller community hospitals, into financial distress.

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“This has not been happening overnight but over a matter of years,” said Carol Meyer, director of governmental affairs at the Los Angeles County Department of Health Services. “More hospitals are finding themselves in a desperate situation, and that has a significant impact on all patients.”

Since 1996, more than 70 community hospitals have closed across the state, with a disproportionate share -- more than 50 -- in Southern California. Regionally, 14 emergency rooms have closed in the last five years, including 10 in Los Angeles County.

Some worry the trend is worsening and increasingly afflicting crucial facilities.

Three years ago, Robert F. Kennedy Medical Center in Hawthorne shut down. Late last year, Centinela Freeman Medical Center Memorial Campus in Inglewood closed its emergency room.

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Martin Luther King Jr.-Harbor Hospital in Willowbrook was closed in August when the federal Medicare and Medicaid agency pulled half the hospital’s funding. That closure followed nearly four years of failed attempts to reform the troubled institution, formerly known as King-Drew.

Hospital experts say that as many as two dozen other area hospitals are under severe financial strain.

In June, Integrated Healthcare Holdings Inc., which owns Western Medical Center-Anaheim and three other Orange County hospitals that account for 12% of the beds in the county, defaulted on its debt. The company says its finances have improved since then.

In recent interviews with The Times, executives at Centinela Freeman Health System and Downey Regional Medical Center said they were considering closing their emergency rooms. Downey’s chief operating officer, Rob Fuller, said the hospital could close entirely as early as next year if its financial situation didn’t improve soon.

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Brotman opened more than 75 years ago as an eight-bed clinic and has grown into one of the largest hospitals in the Southland. In recent years, however, it has struggled with rising costs and lower revenue. Its losses soared from $268,000 in 2001 to nearly $15 million in 2005, when Tenet Healthcare Corp. sold it to local investors.

Just a year ago, Brotman painted a rosy picture about its future. In a November news release, the hospital said that it ranked among the top 5% of hospitals nationwide in a prominent national survey and that it was considering increasing beds in its emergency room. The hospital treated about 25,000 emergency room patients last year.

But the fiscal picture worsened, as did other news about the medical center.

Last month, The Times reported on the case of the mentally disabled woman, Linda Sue Brown, who died at Brotman.

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After months of investigation, state health inspectors determined that Brown died after doctors missed signs of heart failure, performed risky emergency surgery with no clear justification and then failed to intervene as her condition deteriorated. The hospital’s nurses appeared to have forged consent forms and had Brown sign agreements that she couldn’t understand, inspectors said.

Brotman executives said that Brown was in precarious health with ailments that included an enlarged heart and that nothing staffers had done could have changed the outcome. They also said the inspectors judged Brotman staffers too harshly and failed to consider some mitigating information.

A lawsuit filed against the hospital by Brown’s family is pending.

daniel.costello@latimes.com

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