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$50-Million Health Fund Sits Idle as Inglewood Waits

Dispute: Activists complain about lack of progress. Trust's president commits to meeting community's needs.


In Inglewood, having an extra $50 million to spend on health care seems like a present--not a problem. With more than their share of uninsured patients and one in five children living in poverty, the neighborhoods could use the range of medical services that money could buy.

Yet a $50-million charitable fund, earmarked for health care, has sat untapped for a year, and critics say little progress has been made even in planning what to do with it.

Not that no one wants the money. Community activists and health care advocates insist that it is needed for everything from cancer screening to job development, and that it should not be squandered. But even before the first community meeting to air the issue takes place next month, a not-so-charitable brawl has erupted over how the money should be spent.

The dilemma arose in August of last year, when nonprofit Centinela Hospital Medical Center was sold to a for-profit chain--and the proceeds were set aside, as required by state law, for a $50-million health care charity.

Since then, even the nonprofit hospital's 91-year-old former president, whose marble bust stands in the lobby and whose giant oil-painted portrait graces its pavilion, has come out swinging against the board of trustees charged with developing a plan for the money.

"They're jerks," Ira Kaufman said of the Centinela Valley Health Services trustees, who make up the former nonprofit's parent board but who have nothing to do with the current ownership.

At issue, among other things, are the board's preliminary moves to allow the City of Hope, a hospital giant 32 miles away, to manage the money and perhaps claim a chunk of it for its own programs.

Recently, the California attorney general's office has quashed the budding courtship between the Centinela and City of Hope boards, and has invited community input on the spending plan. But local feelings are bruised.

Kaufman accuses the Centinela trustees--only one of whom lives in the area--of caring more about their "golf games at the country club" than they do about poor people. Some vocal community members share his ire. Others have questioned the board's ethnic makeup (two of 11 board members are minorities compared to nine in 10 residents).

"There will be a substantial commitment to the community," promised board of trustees President William C. Miller, a former longtime Inglewood resident who now lives in Bel-Air. "If [Kaufman] thinks there isn't, he's wrong."

Restrictions on Such Proceeds

How to spend such windfalls is becoming an increasingly common quandary nationwide. Between 1980 and 1993, 270 nonprofit hospitals converted to for-profit status. Fueled by grueling competition in health care, an additional 140 nonprofit hospitals converted to for-profit or public hospitals between 1994 and 1996. Two recent California conversions involved hospitals in Riverside and San Jose.

Money freed up by such transactions tends to stir strong emotions. During the recent conversion of Good Samaritan Health Systems in San Jose, local politicians threatened to take hold of the kitty by "eminent domain." By law, the proceeds--minus debts--are to be spent in a manner that honors the nonprofit's charitable mission. The question is: What does that mean? In Inglewood and elsewhere, it is not so simple as spending the money where it is needed.

"It seems like it should be a slam dunk," said Paul Torrens, a professor of health services at UCLA. "But it isn't."

To the attorney general's office, which must review the spending plan before it is submitted to a judge for approval, the money comes with tight strings.

"It's not free money," said Deputy Atty. Gen. James Schwartz. "It's trust money"-- generally restricted to areas in which the former nonprofit hospital has a track record.

Schwartz would not discuss specifics of the Centinela board's plan but has indicated that he would favor a blueprint that benefited other local nonprofit hospitals providing charitable services, such as indigent care. In fact, he launched a time-consuming effort to build a consortium of six area hospitals--including the Daniel Freeman and Robert F. Kennedy medical centers--to advise the Centinela board.

Meanwhile, irked by rumors of City of Hope's role, community activists, business people and politicians in and around Inglewood say they are feeling left out.

"'Where does the community become involved? . . . [The planning process] is almost like the best-kept secret there is," said activist Lynette Lewis, an advocate for women's health care.

Schwartz hopes that the public will become involved Oct. 28, when trustees are expected to present a preliminary spending plan--still being drafted--at the Inglewood Public Library.

"We'll see if we can get an agreement that meets everybody's needs," he said. "I'm actually optimistic. . . . These are things we just have to work through."

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