UC will provide physician services for a new, 120-bed hospital on the grounds of the old facility. UC and Los Angeles County each will be responsible for appointing directors to serve on the board of the new corporation that will operate the hospital, which is expected to open in phases, beginning in late 2012.
The coordination agreement is structured so that UC will not be financially liable for the new entity that will operate MLK Hospital. Los Angeles County will provide funds needed to open the new MLK Hospital and ongoing financial support to ensure its long-term viability. UC will have no financial obligation for the facility.
"This agreement to reopen MLK Hospital creates an innovative partnership that will serve a vital need for the people of South Los Angeles," said Dr. John D. Stobo, UC senior vice president for health sciences and services. "We look forward to working with Los Angeles County in extending UC's role as a key component in California's medical safety net.
"It's the right thing to do, and the agreement, as forged, provides financial protections for UC. If UC doesn't step forward, who else will?"
MLK Hospital, the roots of which date back to the 1965 Watts riots, was closed in August 2007 after a series of troubles that included having federal regulators cut off its Medicare funding. Shortly thereafter, Gov. Arnold Schwarzenegger and Los Angeles County officials approached UC to discuss reopening the Willowbrook hospital, resulting in talks that led to Thursday's agreement.
"This effort has been truly collaborative," said UC Regent Sherry Lansing, chair of the board's Committee on Health Services, who had described the partnership a "moral imperative.""We listened to each other," she said, "and we respected each other."
MLK Hospital will provide care for a medically underserved population. Half of the hospital's patients are expected to be covered by Medi-Cal and about one-third are expected to be uninsured, according to financial assumptions.
Key provisions of the coordination agreement include:
- Los Angeles County will provide funds needed to open the new, seismically compliant 120-bed MLK Hospital and ongoing financial support to ensure its long-term viability, including $50 million in startup funds, a $353.8 million capital project commitment and $63 million a year in operating funds. For the first six years after the hospital has opened, payment of L.A. County's operating funds shall be secured by a $100 million letter of credit obtained by Los Angeles County from a major lending institution.
- UC will provide no startup, ongoing or other financial support for the new nonprofit entity that will operate MLK Hospital.
- The hospital, which will include an emergency room and three operating rooms, will address the major health needs of the community - hypertension, heart disease, stroke, diabetes and obesity — by emphasizing medical care and de-emphasizing surgical care. The hospital will become part of a larger clinic/outpatient-based community health care system.
- The nonprofit corporation will have an appointed governing board of seven members — two each appointed by Los Angeles County and the UC president and three jointly appointed by Los Angeles County and the UC president. Board members cannot be current officers or employees of the county or UC and must have at least 10 years of experience in health care or a related field.
- The proposal calls for UC to enter into a contractual agreement with the nonprofit group to provide physician services. Staffing will likely involve roughly 14-20 UC-employed physicians, supplemented with community-based physicians from White Memorial and Harbor-UCLA physician groups.
- The corporation, at its own expense, will employ — or contract with a third party other than UC or Los Angeles County — for the non-physician personnel working at the hospital.
- UC will have the primary responsibility to direct and manage efforts to establish teaching activities for medical students, residents and fellows consistent with accreditation standards and time frames for re-establishing educational programs.
To view the agenda item, visit www.universityofcalifornia.edu/regents/regmeet/nov09/h1.pdf.
About UC Health
The University of California's five academic medical centers and 10 hospitals form a $5 billion enterprise providing broad access to specialized care that earns the highest national rankings and serves as a medical safety net. UC's health sciences training program is the country's largest with more than 14,000 students and 16 health professional schools. For more information, visit http://universityofcalifornia.edu/sites/uchealth.