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Municipal Teaching Hospitals Said to Face an Unhealthy Financial Future : Takeovers by For-Profit Firms Noted; Poor Seen to Be at Risk

July 21, 1985|ALLAN PARACHINI | Times Staff Writer

The financial future of two dozen of the nation's most prominent municipal teaching hospitals--including County-USC Medical Center and Harbor-UCLA Medical Center here--is gravely threatened, along with the health care of masses of poorer people, according to several new studies.

At the same time, teaching hospitals across the country that have accepted or are considering takeover bids from for-profit hospital firms face the prospect that endowments commonly set up in such purchases--to provide care for the poor--will probably be exhausted by the year 2000.

Common Result Feared

The problems that face both municipal teaching hospitals and academic facilities that have become the targets of for-profit entrepreneurs are different, but a wide variety of nationally respected experts fear they may eventually have a common result: the essential unavailability of high-quality medical care to anyone who lacks comprehensive private insurance.

Research published last week and new survey results obtained separately by The Times imply that, even in a field accustomed to financial near-emergencies, what is happening now to municipal hospitals is more dire and threatening than anything in recent memory. Still, there are indications of scattered efforts, including one in California, to head off the pending crisis by providing additional funding for the care of those who cannot pay.

Problem of 'Dumping'

The problem centers largely on the fact that, increasingly, public facilities are being forced to care for patients who are transferred to municipal hospitals by private centers because they cannot pay.

While the practice of shifting patients to public hospitals for strictly economic reasons--commonly called "dumping"--has long been thought to be widespread, experts now fear that economic pressures for better cost control and more stringent limitation of insurance benefits may be forcing an even greater burden on municipal facilities than ever before.

These are among the conclusions of five new studies of the plight of teaching hospitals and the possible influence on them of buy-out pressures from for-profit health-care concerns. (Teaching hospitals are facilities that train the nation's doctors, care for many of the most difficult and complex cases and provide treatment to millions of poor people.)

Release of the new studies comes at a time when hospital administrators are watching the changing economics of teaching hospitals in general--and municipal hospitals, in particular--with a growing sense of alarm.

The squeeze, many of these experts believe, is almost certain to grow worse before it gets better. And, argues a team of researchers at the Rand Corp. in Santa Monica, the situation is so serious that the resemblance of modern-day publicly owned teaching hospitals to turn-of-the-century charity institutions may be starkly evident in as little as three or four years.

Some more cynical experts say there is little new in the gaps in health care between the poor and those who can pay. "There is the question of whether things have (ever) been very different," contended Robert A. Derzon, former director of the federal government's Health Care Financing Administration and now a private consultant.

Evidence Is Mounting

But, across the country, public hospital officials say there is growing evidence that the total number of patients in municipal hospitals--as well as those transferred there by other centers--is increasing and money available to pay for their care is on the decline. At Los Angeles County hospitals, for instance, the 1985 patient census is at least 6% higher than expected--in large part, said county health director Robert Gates, because of the growing number of economic transfers.

In Chicago, some doctors have estimated transfers for strictly economic reasons have increased by 300% to 400% in the last year and Illinois Gov. James R. Thompson has appointed a special commission to try to find a solution to the problem. In Florida, the legislature, responding to cries of alarm from teaching hospitals there, has passed a special bill that imposes what amounts to a tax on hospitals that do not care for the poor, the proceeds of which go to public hospitals that do.

The quintet of research papers was published in the current issue of the New England Journal of Medicine. The Rand study and an assessment of the financial implications of for-profit teaching hospital takeovers by a team at Johns Hopkins University in Baltimore represented the two most apparently significant pieces of the new work.

And separately in Washington, the National Assn. of Public Hospitals released to The Times preliminary results of a study of patient transfers to municipal teaching hospitals that begins to quantify--and for the first time confirm--the extent to which private hospitals are ridding themselves of economically questionable patients in apparently wholesale numbers.

41% of Cases Were Emergencies

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