Citing earthquake retrofitting costs and a need to streamline in an overbedded region, Little Company of Mary Health Services will shut down the inpatient acute-care facility at its two-campus 342-bed Bay Harbor Hospital in Los Angeles in 2000.
Officials with not-for-profit Little Company of Mary said it's likely the 130-bed acute-care facility, known by itself as Bay Harbor Hospital-its 212-bed Bay Harbor Hospital West sister facility is at another location-would be recast to provide some form of ambulatory care. A firm decision hasn't been made, and an exact date for the acute-care shutdown has not been determined.
Bay Harbor's acute-care facility had been reeling from a series of misfortunes. Its largest HMO contract, with the former FHP, was undermined when FHP merged with PacifiCare Health Services in 1997. According to hospital officials, PacifiCare contracted with different physician groups than FHP did, and it sent patients to other area hospitals. That practice reduced the hospital's census from 50% to 30% of capacity.
The 39-year-old facility also faced a $30 million tab to meet stringent new state seismic regulations by 2008. And recent limits on Medicare reimbursements were cutting cash flow.
"We haven't been successful here, so it seemed time to move on," said Little Company of Mary Chief Executive Officer Blair Contratto.
Bay Harbor Hospital West, a rehabilitation facility that shares the Bay Harbor license, would be unaffected by the decision, she added.
Bay Harbor's two campuses together posted 1997 net income of $3.4 million on net patient revenues of $51.5 million, according to the most recent data available from Baltimore-based research firm HCIA. Officials said performance had since declined but did not provide specifics.
Observers noted that there's little room for a poorly performing hospital in the South Bay region of Los Angeles. The area is one of the most overbedded portions of Southern California, with seven hospitals competing for patients.
It would be the second time in as many years that Torrance-based Little Company of Mary has shut down inpatient services at one of its facilities. It converted 149-bed South Bay Medical Center in Redondo Beach to ambulatory care last year after leasing it from Santa Barbara-based for-profit Tenet Healthcare Corp. (April 27, 1998, p. 26).
Aside from Bay Harbor, Little Company of Mary operates 354-bed Little Company of Mary Hospital, also in Torrance, and 309-bed San Pedro (Calif.) Peninsula Hospital.
Little Company of Mary also announced an affiliation with the Los Angeles subsidiary of Sisters of Providence Health System in Seattle. The affiliation is called Providence Health System Southern California Region. It includes two Sisters of Providence Hospitals: 257-bed Holy Cross Medical Center in Mission Hills and 423-bed Providence Saint Joseph Medical Center in Burbank. Providence and Little Company of Mary will engage in joint purchasing and other collaborative efforts.