San Francisco Chronicle - July 22, 2005
E-mail Rachel Gordon, rgordon@sfchronicle.com.

The report, released Thursday by Controller Ed Harrington, calls for a radical overhaul of the way the city's public health system takes care of residents who are elderly or have disabilities and others who need extended care.

"San Francisco would reap enormous benefits from changing its approach to meeting these public health needs," said Harrington, who also serves as city auditor.

Not only could the city save money -- up to $14 million a year -- but it also could improve patient care, the report says.

The most politically volatile proposal calls for halting plans to replace Laguna Honda with another large convalescent hospital.

City voters approved a $401 million funding plan in 1999 to rebuild Laguna Honda with 1,200 beds, roughly as many as it has now.

The replacement project is under way, but cost overruns have forced city officials to rethink that plan. There is enough money now to build only a 780- bed hospital.

But even that is too big, said the controller, who based his recommendations on a study of the city's system of long-term care by a consulting firm, Health Management Associates.

The study suggested that instead of building one big hospital on the Laguna Honda site on Twin Peaks, the city should build three separate centers, each for no more than 200 patients.

That way, health officials could separate convalescent patients with different needs, the report said.

That has proved to be a problem for the Department of Public Health. Earlier this year, it was forced to back off a short-lived policy of admitting more young patients with mental illnesses and drug addictions to Laguna Honda. Critics said the policy threatened the safety of Laguna Honda's other patients, most of whom traditionally have been elderly.

The smaller centers would allow "for reasonable quality control, patient safety and good economics," the study said.

The study also questioned the need for a large convalescent hospital. Nationally, it found, 52 percent of skilled nursing facilities have 100 or fewer beds. An additional 42 percent have fewer than 200.

The study found that "a significant number" of patients at Laguna Honda do not need to be hospitalized and could do well in a cheaper home-care or community-care situation. The average cost to care for a patient at the city- run nursing home is $397 a day.

Harrington pointed out that approximately one out of every 700 people in San Francisco lives in Laguna Honda and that "the city has effectively institutionalized more of its population, across a wider spectrum of needs, than anywhere in the country."

Still, voters made clear their support for Laguna Honda Hospital when the 1999 bond measure garnered more than 70 percent of the vote.

"If I could wave a magic wand, everyone would be able to be cared for in their own homes," said Sal Rosselli, president of Local 250 of the Service Employees International Union, which represents many workers at Laguna Honda. "That's what we'd all like to see."

But the reality, he said, is that the need for skilled nursing will grow as the population ages.

His union is fighting to make the city fulfill the promise it made to voters six years ago to rebuild the hospital with 1,200 beds.

Shipping patients to privately run board-and-care homes and nursing homes, Rosselli said, would diminish the "high quality of care that people get at Laguna Honda."

The city-commissioned study found that San Francisco, which has a high number of HIV and AIDS cases and complicated mental health and substance abuse problems, spends about $400 per resident on health each year. Nationwide, the average is about $64.

Mayor Gavin Newsom, who was briefed on the study, said that "while I may not agree with every single recommendation, I agree with the spirit of the report, which states the obvious: We are on a collision course with a crisis in public health funding in San Francisco, and we have an obligation to address some of the systematic problems.

"There is no argument to delay the tough decisions that need to be made. "

The Board of Supervisors is expected to hold a hearing on the new report in the coming month.

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