CITY OF ANGELS: Hospital to Entice Cash-Paying, Low-Income Latinos
A physician and entrepreneur are planning to reopen City of Angels Medical Center, which they "hope will stay afloat by attracting a high volume of cash-only patients" in its inner-city, low-income Latino neighborhood in Los Angeles. Robert Bourseau and Dr. Rudra Sabaratnam, president and secretary of the hospital's parent company, National Psychiatric Services, began managing hospitals together in 1989 and bought City of Angeles from Cigna Health Plans of California for $14.2 million last July. Since then, they've spent "$4 million refurbishing the facility," given 90 physicians staff privileges, hired 39 nurses and plan to take on about 95 nonphysician staff members. Modern Healthcare reports that Bourseau and Sabaratnam "believe they can beat the neighboring hospitals on cost, and that advantage will be directly marketed to cash-paying patients rather than health plans." Market research shows that surrounding residents have the ability to pay $1 billion annually out-of-pocket for health services. City of Angels projects that "nearly a quarter of the estimated $28 million in net patient revenues for next year will come from self-pay patients." To attract patients, the facility will offer "price quotes for procedures over the telephone." Sabaratnam said, "We want to make it as easy to get a cash quote for a procedure as it would be calling a car dealer to get a quote on replacing a carburetor." For those who can't pay cash, credit will be available. Modern Healthcare reports that observers acknowledge that City of Angels has "the potential for success, but voiced concerns" that patients would "end up paying a huge portion of their incomes toward health care relative to more affluent members of the community." Bourseau and Sabaratnam counter that "in exchange for their money, patients will get better services," such as a Spanish-speaking staff and Latin-American cuisine in the hospital (Shinkman, 4/5 issue).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.