A New Reality: 1980-2002
Throughout the 80s and 90s, rapid advances in technology helped physicians treat injury and control disease in new and exciting ways. But these technological advances caused the cost of care to skyrocket. At the same time, insurers paid hospitals less and less for the care they provided. These and many other economic factors created a fundamental shift in the way hospitals conducted business.
Nowhere was this more true than at White Memorial, where a large percentage of patients were financially unable to pay for their care and often couldn’t even get or pay for health plan coverage.
As a result, the early to mid-1980s were financially devastating for White Memorial. In 1980, the hospital joined other Adventist facilities to form Adventist Health System/West. But even the strength of this affiliation could not stop the flow of red ink. By 1987, there was talk of selling the hospital because of its debt.
The hospital instituted an extensive cost-reduction program in a last-ditch effort to keep its doors open. This move required sacrifice, including the elimination of several residency programs, but it worked: By the end of 1988, the hospital was actually turning a small profit.
Unplanned Funds Trigger an Economic Turnaround
In 1989, a single event reversed White Memorial’s financial crisis and promised to protect the hospital from similar circumstances in the future. California Senate Bill 855 established funds for hospitals — such as White Memorial — that provide a high percentage of charity care (free or reduced-cost care) and serve a disproportionately high number of Medi-Cal patients. Today, White Memorial is in a financially strong position as a result of this special funding and is well positioned for the future.
The hospital’s financial future was further strengthened in 1996 when the Federal Emergency Management Agency (FEMA) committed more than $89 million in funds to White Memorial in the wake of the 1994 Northridge earthquake. Although damage to the hospital was minor, White Memorial qualified for funds, along with other California hospitals, to retrofit and/or rebuild as a result of California State Senate Bill 1953, which requires that all hospital buildings not only remain standing, but be operational, following a major earthquake.
An Outward Focus
Throughout its financial ups and downs, White Memorial stayed true to its commitment to the East Los Angeles community. In the mid-1980s, the hospital changed its mission from being a teaching hospital with community affiliations to a community hospital that offers teaching programs that better serve the community. Hospital leaders also chose to keep many advanced services, such as neonatal services and the open-heart surgery program, that are not usually found at a community hospital.
In 1988, White Memorial established a Family Medicine Residency program that focused specifically on Hispanic doctors-in-training, a reflection of the hospital’s overwhelmingly Hispanic patient population. At this time, the emphasis of the medical education programs shifted to the primary care needs of the community.
Throughout the past 25 years, White Memorial has worked closely with a large number of community-based organizations to bring health, safety and wellness programs to individuals and families who might not be able to receive these benefits elsewhere.
So, while White Memorial’s most recent quarter-century has been influenced strongly by the challenges of a new financial reality, the hospital’s staff and physicians have continued to explore ways to better serve their community. And now, with a major building campaign underway, the future looks brighter than ever for the relationship between White Memorial and the people of Los Angeles.