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Rancho Los Amigos Staff Cut in $3.7-Million Crunch

April 07, 1988|RICHARD HOLGUIN | Times Staff Writer

DOWNEY — The county-owned Rancho Los Amigos Medical Center is cutting back its temporary work force and restricting new hires to compensate for a $3.7-million budgetary shortfall, officials said.

The money problems arose because Rancho Los Amigos has been treating fewer patients than expected this year, hospital officials said.

The county nurses' strike earlier this year was the primary cause of the decline in patients, Rancho Executive Director Armando Lopez Jr. said. But Lopez said he suspects there also has been a decrease in seriously injured patients because of a state law that mandated seat belt use as of January, 1986.

"Parents are now insisting children have their seat belts on," Lopez said. "The problem for us is less patients, but it's good news for the community."

Rancho Los Amigos, a sprawling complex that covers more than 200 acres on Downey's western border, is internationally known for rehabilitating people afflicted with disabilities ranging from severe spinal injuries to nerve and brain damage.

Lopez said the hospital has begun to cut 137 temporary non-medical personnel from its payroll by finding jobs for them at other county facilities. The temporary positions being eliminated include carpenters, electricians, maintenance and clerical personnel.

No Effect on Patient Care

Lopez said he has imposed a hiring freeze on all but essential medical personnel to maintain minimum staffing levels. Spending on supplies has been restricted as well.

The cuts will not directly affect patient care, Lopez said. It primarily will defer non-essential maintenance of the hospital until next year, when spending levels should be restored, he said.

"These measures will not impact the quality of care in the short run," Lopez said earlier this week. "I'm totally committed to making sure the quality of care remains the same."

Rancho Los Amigos receives income from various sources based on the number of patients it treats. The hospital's $121-million budget for 1987-88 was based on an average daily load of 425 patients, said Edward J. Renford, associate executive director. But the patient load has averaged just 406 patients a day since the beginning of the fiscal year--last July 1--through the end of March, he said.

It survives on referrals from county hospitals that provide acute, or short-term care. For example, Rancho Los Amigos receives about 25% of its patient referrals from County-USC Medical Center, one of six county hospitals, said Chief Financial Officer Keith A. Kovach.

When county nurses struck over pay in January, employee shortages prompted some county hospitals to divert patients to private hospitals. Lopez said he suspects Rancho lost patients who required long-term care to private hospitals.

Rancho's four pediatrics units have suffered the largest reduction in patients, accounting for $2.5 million of the shortfall, Kovach said.

Expect to Save $200,000 a Month

Officials said the hospital will save $200,000 a month by removing 137 temporary employees from the payroll. Twenty-seven temporary employees already have been reassigned and the hospital has reached agreements to reassign 10 others, Renford said. Rancho Los Amigos had 400 temporary employees before the transfers. Some of the temporary employees have worked at Rancho for years as they move from one project to another, officials said.

Lopez said if efforts to transfer all 137 workers are unsuccessful, some may be laid off.

Through the hiring freeze, the hospital hopes to save $300,000 before the fiscal year ends June 30. By deferring the purchase of all but essential medical supplies, the hospital hopes to save $1.5 million this year, Kovach said.

"That's working down our inventories as much as possible," Kovach said. "For example, if curtains are tearing, we don't replace that until next year."

Hospital officials also hope to save $200,000 by reducing overtime work, and will try to speed up collections from insurers to make up the rest, Kovach said. That will force the hospital to maintain accelerated collections in the future, he said.

"Keith (Kovach) and I are watching collections on a daily basis," Lopez said. "I'm confident we're going to be able to balance the budget."

Lopez said the hospital's patient load should increase gradually as the effect of the nurses' strike dissipates. He said he will present to the County Board of Supervisors a proposal to lease hospital space to private doctors, which would bring more patients into the hospital.

Last year, the hospital budgeted for an average daily load of 425 patients but ended up treating more people, Renford said. Rancho finished the year with a surplus of $1.97 million, said Dennis Velia of the county's chief administrative office.

Fifty-five percent of the hospital's patient load is covered by Medi-Cal and Medicare, while 13% of Rancho's patients are privately insured, Kovach said. Some patients are uninsured and pay for their care themselves, and the county picks up the bill for rest, he said.

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