SAN FERNANDO VALLEY: One Hospital To Close, Another May Follow
Tenet Healthcare Corp.'s North Hollywood Medical Center, hobbled by a financial base "eroded by reduced fees for medical care" and a sharp decline in doctor referrals, will close its doors August 31, the Los Angeles Times reports. Separately, Kaiser Permanente, "faced with a massive earthquake repair bill at its Panorama City hospital, is considering closing all but outpatient operations there."
Tenet's move to close the North Hollywood center had been expected "for some time" by state regulators, the Times reports. Los Angeles County health analyst Mario Reyes said "closing the North Hollywood facility will not greatly affect the region's trauma system nor indigent residents' access to health care." Tenet, which recently purchased Hollywood-Queen of Angels hospital, said "an urgent care facility will be opened next door" to the North Hollywood facility "and operated by [Tenet-owned] Encino Hospital to alleviate the need for services."
Fighting Kaiser's Move
Kaiser Permanente faces opposition from one congressman in its move to close the Panorama City hospital. U.S. Rep. Howard Berman (D), "whose district includes" the facility, believes closing the hospital "would leave Kaiser customers in the northeast valley without a nearby facility capable of handling urgent care." The Times notes that federal and state laws prohibit managed care plans from closing "a major hospital without providing a nearby alternative for its members to use." Jim Lott, president of the Health Care Association of Southern California, said: "Kaiser has to meet extremely stringent regulations regarding access for HMO members. ... They cannot restrict access without being heavily sanctioned." But a Kaiser spokesperson said the HMO would handle access problems by contracting "with other hospitals to treat members who need overnight care."
Federal funding already approved for the Panorama facility's repair may come into play in the dispute. The Federal Emergency Management Agency has committed $66 million for repairs to the damaged hospital, and a Kaiser official confirmed that the HMO has requested that the money be shifted to other facilities. But Berman "has asked FEMA not to allow Kaiser to shift" the funds. The Times notes that Kaiser has moved to close other facilities in the past, "only to decide against doing so because of financial, legal and community pressures."
Just The Beginning
The Health Care Association of Southern California's Lott said the Panorama City case could be indicative of things to come for hospitals. He said 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." Lott noted that "[s]eismic requirements are expected to reduce the number of buildings devoted to health care by 28%" (Schultz/Bernstein/Willon, 6/26).