Hospital sale still up in air

Deputy Atty. Gen. Wendi Horwitz came to town to hear comments on the proposed sale of South Coast Medical Center to Mission Regional Medical Center. She got an earful.

About 150 people attended the five-hour meeting Wednesday night at Top of the World Elementary School. Lots of opinions and suggestions were offered, but no conclusions were announced about the terms of the sale, which must be approved by the state attorney general’s office.

Concerns ranged from qualms about inadequate equipment to the future of local doctors and loss of local control.

“Laguna Beach is concerned that the new owner is eliminating outpatient departments including cardio rehab and the senior fitness gym,” said resident Kathy Baker. “If you could see these classes, I don’t think anyone with a heart could close them.”

South Coast doctors made a pitch for the tools they need to practice quality medicine.

“Not having an MRI could be crippling for many doctors,” said staff orthopedist David Ashkenaze. “Losing the scanner will put our patients at a disadvantage.”

Dr. Dan Haspert questioned how physicians could provide services without upgraded equipment and the hospital should be able to cover the cost.

“If we hadn’t had to pay $36 million in management fees to Adventist, we wouldn’t be here,” Haspert said. “So why do cuts have to be made?”

Terms and conditions of the sale must be approved by the attorney general’s office. A decision is expected no later than mid-June, but it is not a done deal.

“Either party can pull out of the deal if they object to the terms imposed by the attorney general,” said Assistant City Manager John Pietig, who spoke at the meeting on behalf of the city.

The city has no control over the hospital, but has taken as active a role as possible in the sale, identifying its preferences and goals and would like some insurance that those goals will be met. The council was updated on the transaction at its Tuesday meeting.

“We are optimistic about Mission’s good intentions in taking over South Coast, but we really would like to see the attorney general translate those good intentions into a written commitment so the community can be assured that South Coast will be successful for the foreseeable future,” Pietig said.

South Coast Medical Center neighbor Will Gardenswartz said the city is justified in asking for a commitment in writing. He doesn’t think another new management team will be able to turn around the hospital.

“The acquirer [Mission] will attempt to boost flagging revenues by loading the medical offices surrounding SCMC with procedure-intensive medical practices,” said Gardenswartz, the only speaker at the meeting who opposed the sale, not just elements or omissions in the agreement.”

Mission’s got a low-risk deal, Gardenswartz said: A $36 million investment is small potatoes compared to the value of the land.

“That’s not a supreme incentive to modernize the hospital. If it fails, [Mission] has a gold mine of land, even if it is encumbered by zoning restrictions,” Gardenswartz said.

Gardenswartz has lived across the street from South Coast since 2002.

“The hospital’s physical plant, while old, produced a regular, low volume, a thrum that was largely imperceptible — a very tolerable ‘white noise,’” he said.

Gardenswartz claims the noise from the hospital ventilation system, commonly called the chillers, has grown so loud that he can no longer carry on a conversation in his back yard without shouting.

He has initiated legal action to force the hospital into compliance with the city’s noise ordinance and has instructed his attorneys to add the city to his letters demanding action because it has failed to enforce the ordinance.

That is not his only complaint.

He said infectious waste is stored in a shed in the parking garage; imaging equipment is in a trailer that makes wretched noises day and night; and he recently trapped four rats.

He doubts that Mission, or any other buyer, would be willing or even intends to spend the money yo transform SCMC into a modern, well-functioning hospital.

Gardenswartz and the South Laguna Civic Assn. favor seismic retrofitting, which has been estimated to cost $70 million or more.

The fact is that if Mission doesn’t get an extension on the state requirement for seismic retrofitting by 2013, the South Coast Medical Center, like many other hospitals, faces closure.

“They probably could not afford to keep open the emergency or acute care service,” Pietig said.

The report by the consultant recommends a condition of the sale that stipulates that Mission should continue to operate South Coast as an acute care hospital through Dec. 31, 2012, regardless of state retrofit requirements, but should continue operations for at least five years from the close of sale if the 2013 deadline for retrofitting is extended beyond the five-year period, the buildings are reclassified or the state legislature step in.

Other recommended conditions

 Mission should maintain emergency services at the present level for at least five years — the standard term approved by the attorney general’s office. If the service is reduced or eliminated, Mission should pursue any allowable free-standing emergency department or at a minimum provide 24-hour urgent care services in Laguna Beach.

 Intensive, critical care and psychiatric services should be maintained at the present level for at least five years

 Mission should maintain certification for Medi-Cal participation as long as it operates South Coast, and Cal-Optima contracts and Medicare participation for at least five years

 A minimum of $408,238 should be spent annually by Mission for charity costs, not charges, for five years and should be increased annually based on the regional Consumer Price Index

 Mission should spend $418,400 annually in community benefit services for at least five years and participate in county contracts for medical services for the indigent, designated emergency services, emergency preparedness, disaster response and bio-terrorism services

 Transfer services for public health community clinics

 Mission should agree to appoint a local advisory committee that includes the hospital chief executive officer, medical staff and community representatives.

The community heartily supported the last recommendation.

“I’d like to request some kind of local committee or governing board to keep the city and the residents informed, so we can help the transition and keep all of the acute care and emergency services we need,” said former Councilwoman Cheryl Kinsman, who was appointed Tuesday by the council to represent the city, along with Pietig and Councilwoman Jane Egly.

Egly said the city would also like to see a commitment from Mission to spend in the first five year after the takeover the $13 million to $18 million mentioned as needed in discussions.

Economic conditions should improve within the next five years, Egly said.

She also requested consideration of a structured process for donors to South Coast.

“I would like to suggest that Mission maintain a separate foundation at South Coast,” resident Matt Lawson said.

Dana Point City Councilman Joel Bishop was a board member of the South Coast fundraising foundation, which was absorbed by Adventist Health. He also recommended a separate board.

However, South Coast is losing its autonomy, Pietig said. It will be part of a two-campus system under one manager.

And Mission Chief Executive Officer Peter Bastone left no doubt who is in charge, although cloaked in amiability.

“We are here with open hearts and open minds to hear comments,” Bastone said.

But he made it clear that Mission will evaluate capital improvement projects and the timetable for how soon — if ever — they could be funded.

The fate of the staff at South Coast also is being evaluated by Mission. Employees are being interviewed for jobs they already hold.

“We are interviewing all 443 employees,” Bastone said. “There are no job guarantees, but most are going to be hired. And we will post job openings in other St. Joe hospitals.”

Resident Bobbi Cox said having the hospital in Laguna with a staff that works well together is vital.

Other concerns voiced included a ban on the development of a parcel of South Coast real estate holdings, now zoned open space, of particular interest to South Laguna Civic Assn. members.

Written opinions about the sale also may be submitted to Horwitz by e-mail at [email protected], via fax at (213) 897-7605 or by mail to Wendi A. Horwitz, Deputy Attorney General, 300 S. Spring St., Suite 1702, Los Angeles, CA, 90013. The deadline is Monday.

BARBARA DIAMOND can be reached at (949) 380-4321 or [email protected].