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Closure Looms for Hospital That Serves Poor in San Luis Obispo


With five hospitals serving only 246,000 people, you might think medical care would be the last thing people in bucolic San Luis Obispo County would worry about.

After all, Los Angeles County's 102 hospitals serve 9.5 million people. It would take 100 more to bring L.A. to the level of service enjoyed in the lightly populated Central Coast.

Although that might be good news for patients, it's not good news for a hospital's bottom line. Too many beds means too many empty beds.

"The numbers seem to say we've got too many hospitals," said David Edge, San Luis Obispo County's administrative officer.

Maybe not for much longer. A dramatic turnaround plan for the county's 92-bed General Hospital appears destined to fail. The hospital was ordered to cut its costs $5.5 million by next June or face the consequences.

"Estimates are they won't make the bottom line," Edge said. That could mean that one of the county's longest-running public policy battles will finally be resolved, and not happily.

"They've been trying to close the hospital for 20 years," said Dr. Miguel Lanza, a pediatrician. In the past, advocates for the poor argued successfully that farm laborers relied on the care they got there and at the hospital's four clinics in Atascadero, Grover Beach, Paso Robles and San Luis Obispo.

This time, closing the hospital is a real possibility, Edge said.

While San Luis Obispo and Los Angeles counties have held onto their county medical centers, more and more counties have "gotten out of the hospital business," Edge said. Instead, they increasingly contract with private hospitals to care for the poor.

Two years ago, San Luis Obispo County supervisors were on the verge of shutting down the hospital in favor of expanding the clinics. That would have cut the county's annual subsidy from $12 million to $6.5 million.

In the end, supervisors yielded to pleas to make one more try to save the hospital. To be successful, the rescue plan would have to produce the same savings as shutting the facility and expanding the clinics.

To carry out the cost cuts, the county hired a hospital management firm, Casey and Associates, which recently brought in a new administrator, Larry Hood. He has become the lightning rod for all the anger that has boiled up over changes at the hospital and clinics.

"This man gets rid of anybody who might disagree with him," said Dr. Robert Naimark, who recently lost his job as a county pediatrician.

First, Hood replaced emergency room doctors with lower-salaried, non-board-certified doctors. Then he terminated Naimark and Lanza, both of whom had worked in the clinics for more than a decade. Lanza's last day was Friday.

As a result of these actions, several other doctors and nurses have quit, and the public has accused the county of creating a two-tier, class-based system of care.

"Look at my children, and tell them that their health doesn't matter," one angry mother of four said at a public hearing in August.

The county also is facing lawsuits from departed emergency room physicians and one of the pediatricians. The county's chief health officer, Greg Thomas, said he had "great concern" about the decisions.

But it's clear the pain won't stop any time soon. Hood admits that what he's doing is painful, but says he has no choice.

"I have my marching orders," he has said publicly, although he did not return several calls for comment last week.

Edge agrees that there are "passionate feelings on both sides" of the debate.

And General isn't the only struggling facility. French Hospital also considered shutting its six-bed pediatrics unit.

At the heart of the dispute is medical care for the poor.

"Those who argue that General should be closed down say we've got more than enough hospitals already," Edge said.

On the other side, people argue just as heatedly that without a public hospital, the indigent will not be treated as well.

An increasing number of people seem to think the steps being taken to save General Hospital are already compromising care.

Lanza said morale is so bad that two other doctors and two nurse-practitioners have quit.

Doctors who work at the clinics also worked on staff at the hospital. Naimark said Hood defended his decision to bring in general practitioners who could admit more patients.

But Naimark said the pediatricians being terminated generated up to 90% of the hospital's admissions. The doctor said he thinks Hood had personal reasons for getting rid of him.

"Dr. Lanza and I were leaders of a physicians group trying to negotiate a new contract," he said. "At one point, he said he would not talk about contracts anymore. 'I'm fed up with you,' " Naimark quoted Hood as saying. Within two weeks, Naimark said, he got the notice that he was out.

Edge said he doesn't think there was anything personal in Hood's decisions.

Meanwhile, the deadline might be extended to give Hood more time, which would mean that the long-running struggle over the hospital might run a little longer.

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