County Seeks Private Takeover of Clinics : Crisis: But critics express doubt that anyone will step in to run health care facilities serving poor unless reimbursement is offered.

With much of Los Angeles County’s extensive network of public medical clinics slated to close in 45 days due to a budget crisis, health officials are trying to persuade private hospitals to take over and run clinics--with no county reimbursement.

County officials began distributing bid documents this week to private medical providers interested in assuming management of six county comprehensive health centers and up to 39 smaller clinics. The facilities handle more than 2 million visits annually by low-income residents seeking prenatal care, immunizations and treatment for tuberculosis and sexually transmitted diseases.

But some observers say the county is engaged in bureaucratic wishful thinking by asking private providers to operate the clinics, which treat a huge volume of uninsured people, without giving them county money.

“A lot of private hospitals are interested, but almost all of them have expressed doubt that it is possible to treat the county’s indigent and not go broke,” said David Langness, spokesman for the Healthcare Assn. of Southern California, which represents mostly private hospitals.

County supervisors voted Aug. 1 to close all six health centers and 28 clinics as well as most county hospital outpatient services to help bridge a $655-million deficit in the county Department of Health Services. Critics say the cuts will cause TB and other communicable diseases to surge, and will flood private hospital emergency rooms with the ailing poor.

Jonathan Freedman, top aide to county health czar Burt Margolin, said Thursday that private providers picked up more than 200 bidding forms at a meeting this week. He said the county is banking on a strong response from nonprofit and church-run hospitals that have traditionally provided care to indigent patients, even at a financial loss.

But he acknowledged that interest among private care-givers may flag when they actually crunch the budget numbers and understand the potential costs. And even if private operators decide to take over clinics, he said, they will be under heavy economic pressure to shed uninsured people who will be left with few, if any, options to get medical attention.

“It’s going to be a massive dislocation,” Freedman said. “We have the single largest number of uninsured people in the U.S.--2.6 million people.”

Private providers could recoup some of their costs by treating county clinic patients insured through Medi-Cal, the state’s health care program for the poor. Battered by a poor economy and the advent of managed care with its emphasis on outpatient care, most local hospitals are filling less than half their beds and are eager even for Medi-Cal patients.

But many county patients have no insurance, a financial hurdle that private care-givers may not be able to overcome.

Jim Maki, president and chief executive officer of nonprofit Huntington East Valley Hospital in Glendora, said his hospital is interested in perhaps running the county’s Azusa clinic but is still studying the financial implications of treating more indigent patients.

“We’re a community-benefit corporation and we don’t mind picking up a little more [indigent care], but we’re not able to pick up all of it,” he said. “We’d just drive ourselves into the ground.”

In bidding documents, county health officials set Aug. 24 as the deadline to submit proposals to manage the clinics. The county said it wants contractors to begin operations on Oct. 1--the same day supervisors voted to shutter the clinics.

Despite financial drawbacks, private hospitals in inner-city areas are particularly interested in taking over county facilities because they fear their emergency rooms will be overwhelmed if the county closes its clinics and hospital outpatient units.

James Yoshioka, president and chief executive officer of the nonprofit California Hospital Medical Center, near the Los Angeles Convention Center, said he is exploring whether to bid for two nearby county facilities, the Hubert Humphrey and H. Claude Hudson comprehensive health centers.

His hospital’s emergency room, he said, already sees 17,000 people a year--almost twice as many as it was designed for--and could not handle a deluge of new patients from Humphrey and Hudson, which he said record about 450,000 visits annually.

“I can’t afford for [county clinics] to shut down,” he said. “So I’ve got to find ways to keep them open.”

Langness said that if the privatization plan does move forward, it may open the door to “Medi-Cal mill” clinic operators trying to grab Medi-Cal patients while dumping patients with no insurance.

He said illegal immigrants and the poor commonly go to such clinics despite the low quality of care they offer.

“You’re lucky if you see a doctor once a week in these places,” he said. “They’re run by nurses. Typically, they’re in business to make a lot of money and they do.”

Freedman said the county hopes to screen out unsavory operators by giving priority in contract awards to care-givers with a history of providing high-quality treatment to indigent and Medi-Cal patients.

He added that the privatization plan is part of an effort to “radically transform” the county’s health department, which is geared toward hospitalizing patients despite the rapid shift toward outpatient care by private providers.