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Profitless Avalon Hospital May Lose Sponsor : Health care: Long Beach Memorial Medical Center says it can no longer afford to lose $30,000 a month and may pull out.


LONG BEACH AREA — For 30 years, the tiny Avalon Municipal Hospital has been serving an island community whose numbers wax and wane.

As the only hospital on Santa Catalina Island, the facility buzzes during the summer tourist season when Avalon's population swells to more than 20,000. The rest of the year, most of the rooms are vacant as it serves the island's estimated 2,800 full-time residents.

Now, the hospital's future is in doubt. Long Beach Memorial Medical Center, which has operated the tiny hospital since 1984, is seriously considering pulling out when its contract expires in January.

The Avalon hospital is losing about $30,000 a month, said Frances Hanckel, Memorial's chief operating officer. "We simply can no longer afford the loss," Hanckel said.

Avalon officials say that the city, which owns the hospital, could not absorb the deficit.

"I consider this the most important issue facing Avalon," said Mayor Hugh (Bud) Smith. "If you don't have a hospital, you don't have anything."

The hospital is particularly important in the summer, he said, when its emergency room bustles with people injured while participating in water sports or hurt in crashes of the golf carts that tourists use to traverse the island.

During the rest of the year, the hospital provides basic medical services, treating minor injuries and illnesses or stabilizing seriously ill patients until they can be flown to the mainland.

The hospital has never made money, administrators say, and its losses have increased in recent years as costs skyrocketed and government reimbursements dwindled. One result is that the hospital has stopped doing major surgery or delivering babies.

The issue of finances first heated up about six months ago when hospital Administrator Lew Gillette resigned amid rumors of financial mismanagement.

Hanckel denies the rumors, but says that Gillette "was not the best manager" and that "none of us were disappointed when he left."

Gillette, 66, who retired in Banning, says he left primarily for health reasons.

"It wasn't a question of financial mismanagement," he said. "If the (money's) not there, it's not there. There was nothing I felt I could do beyond what I had done, and so I left."

Memorial replaced Gillette with Deborah Andersen, whose mission is to cut costs and improve efficiency, Hanckel said.

At about the same time, the Avalon City Council appointed itself to sit as the hospital's five-member board of trustees, replacing a panel of residents appointed by the council.

"We felt that there was a need for involvement with the people who will ultimately have to make a decision on what to do with the hospital in the future," said Barbara Doutt, councilwoman and now the hospital board chairman. "It was obvious that some long-range planning needed to be made."

From the city's standpoint, Doutt said, the planning mainly consists of trying to persuade Long Beach Memorial to continue managing the local hospital, which was in financial trouble when Memorial stepped in.

Among ideas being discussed is a city subsidy to lessen Memorial's financial burden, reorganizing the hospital and consolidating the hospital with a city-owned outpatient clinic, operated by a separate corporation, under the same roof.

Meanwhile, Andersen has laid off two nurses and several maintenance workers, improved accounting procedures and eliminated unnecessary expenses, Hanckel said.

In the wake of the changes, at least eight staffers--about a third of the employees--have resigned since July. One of those who left was the hospital's only staff physician, a family practitioner who had been on the island for a year and a half.

Dr. Jerri Jensen said that because of the cuts, "it was very difficult for the nurses to give some of the patients the kind of monitoring they needed."

She talked to hospital administrators about her concerns, she said, but saw no evidence of improvement.

"I felt dissatisfied with the lack of direction," Jensen said.

After Jensen left, her duties were assumed by Dr. Robert Staff, 72, who came out of retirement to work again at the hospital.

"Nobody's been injured physically through medical neglect," Staff said, "but it's been a very difficult time. Things have got to get better."

Three months ago, 17 of the hospital's current and former staff members signed a letter to Memorial executives saying the situation at the Avalon hospital was critical.

"Losses should not be cut to the point that patient care is effected," the letter said.

Nurses said staffing levels made it difficult for them to adequately care for patients, especially during peak times. Nurses were required, to the detriment of their patients, to paint, garden, type, send bills, run copies and move office furniture, they said.

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