County approves agreement to reopen MLK hospital

The Board of Supervisors today approved an agreement with the Regents of the University of California to open the new Martin Luther King Jr. Hospital.

The agreement outlines the county's funding commitments to the facility and the general roles of both the county and the university in setting up a private, nonprofit hospital entity.

That entity will begin to take shape when its seven-member board is appointed and goes to work.

Based on the agreement, the county and the regents each have the power to select two of the seven members of the board. The final three seats will be chosen by consensus of the county and the regents.

Candidates for the board have been under discussion by county and UC staffers for the last couple of months. A list of seven potential members is expected to be presented to the Board of Supervisors for its approval in the next few weeks, according to Deputy Chief Executive Officer Sheila Shima.

While some advance planning has been done to accommodate the ``nuts and bolts'' of setting up a new board, Shima said all the real decision making about hospital operations and management will be the responsibility of the independent board.

"We're trying to do everything we can to set it up,'' said Shima, but it will be up to the hospital board to choose a hospital operator -- or make a decision to staff and operate the hospital directly -- and to negotiate the myriad details of providing medical care to the community.

The UC will not provide any one-time or ongoing funding for the 120-bed medical center, which, when fully operational, is expected to handle 30,000 emergency room visits and 10,000 outpatient visits annually.

County officials expect to spend $50 million in start-up funding (at the rate of $10 million per year beginning this month) and will establish a $28 million reserve fund to be used only under ``exigent circumstances,'' according to the agreement.

The county also estimates it will need to cover another $63.3 million in annual expenses -- $50 million through Medi-Cal transfers and $13.3 million in county revenues to pay for medical care for the indigent uninsured. The county has committed to cover shortfalls in Medi-Cal reimbursements through borrowing against a $100 million letter of credit.

The full operating budget for the hospital will depend on the many of the decisions about care that have yet to be made, but some early projections by the county indicated the county's $63.3 million would amount to about one-third of the overall hospital budget. Other revenues will come from Medicare and private patients.

The UC's role will be to provide clinical planning and physicians' services and to direct and manage the establishment of an accredited teaching program at the hospital. Subject to agreement on compensation with the hospital operator, the UC will also provide a chief medical officer and doctors to staff the hospital.

There was little discussion surrounding today's unanimous 5-0 vote in favor of the agreement, as the board approved its basic outlines Dec. 1.

In additional to a host of additional agreements between the county, the UC, the state and the operating entity, state legislation and regulatory approvals will also be required for portions of the agreement to take effect.

Gov. Arnold Schwarzenegger commended the board's decision.

"Today's action is a significant milestone toward the future reopening of the Martin Luther King (Jr. Medical Center), and I applaud the Los Angeles County Board of Supervisors for taking this important step today. This agreement is great news for the people of South Los Angeles who are looking forward to the new hospital providing the quality health care they deserve,'' Schwarzenegger said.

Separate from start-up costs and a percentage of operating expenses, the county is expected to spend an estimated $391 million to build the new facility in Willowbrook, set to open in 2013.

Martin Luther King Jr.-Drew Medical Center, a full-service teaching hospital built after the 1965 Watts riots, lost its accreditation and federal funding after a series of incidents of inadequate care which led to patient injuries and death. In one of the last, most highly publicized tragedies, a woman died on the floor of the emergency room while awaiting treatment.

The hospital and emergency room was closed in August 2007, leaving only a county-run outpatient clinic.