Calling it “the right thing to do,” the University of California Board of Regents unanimously voted today (Nov. 19) to approve entering into a partnership agreement with Los Angeles County to create a private, nonprofit corporation that will reopen and run Martin Luther King Jr. Hospital. The hospital is expected to open in phases, beginning in late 2012.
State, county and community leaders applauded the vote, saying MLK Hospital will provide needed care to a medically underserved population. Reopening the hospital will have a “lasting effect on the quality of health care in the county of Los Angeles,” Supervisor Mark Ridley-Thomas said. Assembly Speaker Karen Bass, an ex-officio Regent, called the vote “historic.” “This will be a jewel, I think, of the UC system,” said state Sen. Majority Leader Dean Florez.
UC will provide physician services for a new, 120-bed hospital on the grounds of the old facility in South Los Angeles. UC and Los Angeles County will each be responsible for appointing directors to serve on the board of the new corporation that will operate the hospital.
“I think it’s the right thing to do,” Regents Chairman Russell Gould said.
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. Los Angeles County will provide funds needed to open the new, seismically compliant 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 Los Angeles County’s operating funds shall be secured by a $100 million letter of credit obtained by the county from a major lending institution.
“The financial concerns that we had I think have been met,” said Regent Sherry Lansing, chair of the board’s health services committee. “This effort has been truly collaborative. We listened to each other, we heard each other and we respected each other.”
“It’s a proud day for the University of California,” UC President Mark Yudof said. “This is what we do: public service.”
I’m so glad to see the Supervisors collaborating with UC to reopen the hospital. They’ve been working hard recently to improve the quality of life in LA County. It even appears that they’re keeping the budget in the forefront of their agenda. Recently, they reissued an RFP for vendor services to operate the county’s GAIN case management services (a welfare-to-work program). I expect the same two companies will submit proposals as last year – incumbent Maximus Inc. and newcomer Policy Studies Inc. (PSI).
Maximus has maintained its contract with the county for many years now, but its cost to the taxpayers keeps skyrocketing. If the new bids resemble those from last year, we can expect that the Maximus bid will cost taxpayers almost a million dollars more than PSI’s.
What’s more, Maximus has a track record of poor performance. Under its latest three year contract, Maximus has been cited repeatedly for failing to meet required goals in 5 of 8 categories (according to the LA Times). Last year, the Department of Public Social Services favored PSI based on scoring done on the two companies by a neutral third party. PSI scored 9,082 out of 9,616 possible points in the procurement process, whereas Maximus scored 7,824 of 9,616. PSI won by a 13% margin on technical score and also submitted the lowest bid, which was 6% cheaper.
Even worse, Maximus has spent hundreds of thousands of dollars trying to buy the support of the Board of Supervisors through lobbying and campaign donations.
I, for one, am grateful that the BOS reissued the RFP and am confident they will select the right choice for LA. In these tough economic times, a program like GAIN is very important in creating jobs for the less fortunate. That, combined with the reopening of King hospital will help put LA back on track to a more prosperous and healthy future.