Private Catholic hospitals in San Pedro are weathering the economic downturn fairly well compared to public hospitals, but top executives are concerned that proposed reductions to the state's healthcare budget could affect their hospitals' cash flow and future investments.

Another concern: federal or state decisions that could affect funding of entitled programs such as Medical and Medicare.

The federal budget deficit could force President Barak Obama to "embrace steep cuts in entitlement programs, as well as curbing his ambitions for new initiatives in health care," according to the analysis "What we don't know about Obama," published Jan. 22 by Politico.com.

"Overall, there is no impact at the present time," said Christopher DiCicco, president and chief executive officer of the 389-bed capacity St. Mary Medical Center in Long Beach. "Our only concern is the state budget, scheduled to be approved by the end of February. If the state stops Medical coverage or issues IOU's it will affect our cash flow."

Careful management
Of the three Catholic hospitals in the San Pedro Region, St. Mary Medical Center is the largest, conducted by the Sisters of Charity of the Incarnate Word. The hospital functions under the umbrella of the Southern California regional office of San Francisco-based Catholic Healthcare West (CHW), the eighth largest non-profit hospital provider in the United States, and the largest hospital system in California.

The hospital serves a large Latino population, as well as Asians --- Cambodians, Vietnamese, Filipinos and Pacific Islanders --- and African Americans.

Despite general market decline, Catholic hospitals have survived by being careful with their payments and funding resources. They have added more services and increased their patient census after the close of several public clinics and hospitals, including the Willowbrook-based Martin Luther King Jr.-Harbor Hospital in 2007.

Four South Bay hospitals closed in 2008, as well 10 emergency rooms in Los Angeles County and at least two other public hospitals have reduced bed capacity, according to Jim Lott, executive director of the Hospital Association of Southern California, as quoted in the Daily Breeze in Torrance.

"The general market decline has affected the hospital's investments, but we have been very careful with our commitment to secure appropriate funding payments from a variety of sources to insure that care continues to be available in our community," said Trish Baeseman, vice president for Lynwood-based St. Francis Medical Center.

The 384-bed hospital is sponsored by the Daughters of Charity of St. Vincent De Paul. Its coverage includes the cities of Lynwood, South Gate, Downey, Bell, Bell Gardens, Huntington Park, Cudahy and Compton.

"The 231-bed Providence Little Company of Mary Medical Center in San Pedro, owned by Seattle-based Providence Health and Services, always manages its resources "very carefully, especially so over the last six months, in light of the economic downturn," said Nancy Carlson, the hospital's chief executive.

Increase in uninsured
Unemployment has also taken a huge toll on the local population seeking hospital services, most of them uninsured or underinsured.

"We are committed to serving the community, especially the poor and the vulnerable, and as we see unemployment rising we also see an increase in the number of people who are uninsured or underinsured for healthcare," Carlson said.

"In recent years the uninsured have increased," added DiCicco, "creating a need to generate appropriate funding, through grants and other resources, and forcing a hold up on new programs."

About 40 percent of the hospital's patients are covered by Medical, while 30 percent are under Medicare insurance. The rest are part of HMO coverage, which has shown a decline with unemployment increases.

According to professional services firm PricewaterhouseCoopers' estimates, Obama's proposal to expand healthcare access would cover about two-thirds of the uninsured nationwide, or 3.4 million more Americans.

Proposed federal healthcare expansion would cost $75 billion in 2009, $48 billion of which would be spent for the currently uninsured and $34 billion to replace previous spending by the uninsured, the firm reported. The total amount is projected to increase to more than $130 billion in 2018, PwC said.

Obama's administration will also face providing coverage to three times more Americans turning 65, compared to Bush's administration, the research firm said.

More emergency services
With the close of public health services in the San Pedro Region and in other areas of Los Angeles County, Catholic hospitals have also increased their emergency room services, and therefore their spending.

St. Francis Medical Center, for example, is now serving more than 62,000 patients in the emergency room on a yearly basis, and delivers more than 7,200 babies each year. With the close of other hospitals, the medical center has become the only hospital in the area. Around 90 percent of its patients are Latinos.

The medical center's emergency room is more crowded now, increasing the average wait time to seven to eight hours per patient, compared to more than 14 hours in other hospitals such as Harbor-UCLA, according to the Department of Health Services Survey cited by the Daily Breeze on its feature story "Hospitals under Stress."

To better provide services, the hospital manages five outpatient satellite clinics in the community, serving a total of 60,000 per year.

The outpatient and inpatient increase has taxed the region's healthcare industry.

"Those dynamics have a definite financial impact on our hospital and especially on our emergency room," Providence Little Company of Mary's Carlson said. "We expect to see this impact starting in the first quarter of 2009, so it is too soon to tell yet how large that impact will be."

"It will take a couple years for the country to get back on track (regarding healthcare)," DiCicco said. He and other executives agreed that, in the meantime, new investments will have to wait, especially in the area of disaster preparedness, which involves billions of dollars.

Despite the challenges, hospital executives are optimistic.

"We have not seen demand for our services drop and so far we have not had to cut services," Carlson said. "We are coping with the uncertainty of the future by watching our expenses very carefully. We are a community hospital and we're committed to serving this community through good times and bad."

St. Francis Medical Center's Baeseman said that for many years, "we have been facing challenges, but always look for solutions working together with our partners and seeking positive outcomes."