Healthcare Market Profile: Los Angeles-Long Beach-Santa Ana

Patient dumping, medical records snooping, emergency room closures, Octomom. ... Los Angeles-area hospitals have weathered more than their fair share of negative headlines in recent years.

Perhaps the biggest scandal was the spate of serious patient-care violations at Martin Luther King Jr./Drew Hospital, later called King/Harbor, which closed in 2007 when the CMS pulled its license. But this story might have a happy ending.

The hospital opened nearly 40 years ago in the aftermath of the Watts riots of August 1965 as a beacon of hope in an impoverished and racially segregated area. The closure more than three decades later was widely viewed as a failure to adequately address the health needs of a community.

Now operating only as an outpatient center known as the Martin Luther King Jr., Multi-Service Ambulatory Center, the South Los Angeles hospital will soon get a chance at redemption through a unique partnership between Los Angeles County and the University of California. In November 2009, a plan was approved to build a new inpatient hospital on the site of the shuttered facility in Willowbrook. To be called Martin Luther King Jr. Hospital, it is slated to open in the fall of 2013 with about 120 beds.

The not-for-profit hospital will include an emergency department and three operating rooms. About 194,000 square feet of the existing six-story patient tower will be renovated and a new 25,000 square-foot ancillary building will be built next door for a cafeteria and administrative offices.

The University of California will provide physician services, with between 14 and 20 UC-employed physicians working on staff. UC will also set quality standards and oversee training programs.

Los Angeles County has committed $50 million in startup funding, a $353.8 million capital project commitment and $63 million annually in operating funds. In April, the county Board of Supervisors approved $165 million to begin construction. A month later, the county approved a labor agreement ensuring that local residents will have first crack at construction jobs on the site.

A seven-member board was appointed to oversee the not-for-profit private corporation. The board is currently looking for a management company or hospital group to operate the facility.

“We're very pleased with the quality of the board members and what they've done to move this along,” says Dr. John Stobo, senior vice president for health sciences and services at the University of California.

Since 2002, 11 emergency rooms have closed in the Los Angeles area, the last one being King/Drew's in 2007, according to the Hospital Association of Southern California.

Hospitals in the region have been under fire for quality care problems. In 2008, the city of Los Angeles approved an ordinance making it a misdemeanor offense for hospitals to transport discharged patients to a location other than the patient's residence without written consent. So-called “patient dumping”—leaving indigent patients in the city's Skid Row area without ensuring follow-up care or shelter—had become the shame of area hospitals. Multiple hospitals in the area settled with the city over the issue and revamped their discharge policies as a result.

In 2008, then-Gov. Arnold Schwarzenegger signed two laws instituting penalties for hospitals and individuals who inappropriately look at patient medical records. The law was spurred by a string of high-profile cases at Los Angeles hospitals where staff peeked at the medical records of famous patients, including Maria Shriver, the state's former first lady.

For instance, UCLA Health System workers inappropriately accessed the records of about 1,000 patients, and 165 workers were terminated, suspended or received warnings. In 2010, a former UCLA Health System researcher was sentenced to four months in prison for peeking at the confidential medical records of celebrities and co-workers. He was the first person in the nation to go to prison for violating federal medical privacy laws.

The new King hospital aims to be a beacon of quality care. A focus will be care coordination for area residents, Stobo says. “The inpatient side will work closely with Los Angeles County's outpatient services to provide more accessible care,” he says. The goal is to provide chronic- care management for common conditions such as diabetes, heart disease and hypertension.