28 Hospitals Serving the Poor Ask to Renegotiate Contracts

Because of major cuts in government funding, all 28 hospitals that take care of the county’s indigent have notified county officials that they want to renegotiate their contracts, which means many of them may stop providing indigent care.

The notification is the latest move in the escalating problem of providing health care to the poor in Orange County.

In August, despite impassioned pleas from doctors, the County Board of Supervisors cut the 1990-91 budget of the Indigent Medical Services program by about 55%, an amount expected to reach $13.6 million.

This week, the chief negotiator for the 28 hospitals mailed letters to Tom Uram, director of the County Health Care Agency, and Supervisor Don R. Roth, chairman of the board, saying that the county now has 60 days to negotiate a new contract with each hospital.

The hospitals in the Indigent Medical Services program provide health care to 24,000 “working poor” who do not qualify for Medi-Cal.

Uram and Roth were unavailable for comment Thursday.

David Langness, vice president of the Hospital Council of Southern California, said Thursday that if the county doesn’t offer more money, the hospitals must either absorb major financial losses, cut back services or drop out of the indigent-care system.

“We believe by the end of the 60-day period, at least several of the hospitals will drop out,” he said.

The county’s payments to the hospitals dropped by 45% in August and September. Under the terms of the existing contract, whenever the payments drop by more than 5%, the hospitals can force the county to renegotiate.

The reduced payments to the hospitals were the result of a state budget cut for which the county supervisors refused to compensate with extra local funding. The supervisors said they had too little money to go around, forcing them to say no to the health-care providers. The total county budget is $3.39 billion, a $320-million increase from last year.

“The problem is Orange County has never really funded health care,” Langness said. “The county doesn’t put any of its own money into it.”

Russ Inglish, Orange County vice president of the hospital council, said that the number of hospitals that drop out of the indigent-care system will depend on what new payments or conditions the county health agency offers over the next 60 days.

“This has the potential for having a major effect on the indigent public,” he said.

If hospitals drop out, the indigent would face longer lines at clinics and fewer services. Doctors worry that it could cause an increase in infectious diseases such as measles.

Also, some hospitals may close their emergency rooms, an impact that would be felt by all residents, not just the poor, Inglish said.

Officials at UCI Medical Center in Orange, which provided care to 10,000 indigent people last year, estimate that the hospital could lose $4 million in the next year as a result of the budget cuts.