It has taken more than three years and multiple legislative attempts, but Sherman Oaks Hospital’s renowned Grossman Burn Center finally has gotten its way in how it’s paid for workers’ compensation cases.

Gov. Arnold Schwarzenegger has signed a bill carried by Assembly members Ed Hernandez, D-West Covina, and Mike Feuer, D-Los Angeles, that directs the state’s Division of Workers Compensation to set higher reimbursement rates for the treatment of serious burn victims.

Reforms to the state workers compensation system in 2003, aimed at controlling runaway medical costs, had the unintended effect of significantly underpaying burn centers like Grossman, which treat the most costly and severe cases. Since many burns occur in industrial settings, workers comp cases historically comprised about a quarter of Grossman’s caseload.

The lower fee schedule, based on what Medicare might expect to pay to treat an elderly burn victim as opposed to a younger worker, resulted in a 40 percent drop in reimbursements and a significant hit to the hospital’s bottom line.

“Burn care is a very high-intensity, acute form of health care,” said Dr. Peter Grossman, co-medical director of the center his father founded. “What we’ve seen over the last several years is a closing of burn centers throughout California and the nation because it’s just not a profitable venture for most hospitals.”

The Grossman center didn’t close, but in the years it took to improve reimbursement rates other significant changes took place. Sherman Oaks Hospital, formerly a not-for-profit community hospital, was sold in 2006 to Dr. Prem Reddy’s controversial for-profit Prime Health Services Inc.

Prime is criticized for its tough stance with labor groups and a practice of canceling contracts with health maintenance organizations, thereby creating a wealthier patient base.

PolyPeptide Expands

The Los Angeles area’s biomedical industry is much more than the generator of hot biotech cancer and infection-fighting drugs from the likes of Amgen Inc. and Abraxis Bioscience Inc. Operating below the radar are a host of businesses that enable drug developers here and abroad to develop blockbuster products.

That includes companies such as PolyPeptide Laboratories Inc., the Torrance-based U.S. subsidiary of a privately held Swedish-based company. The U.S. operation, with facilities in San Diego and three other countries, recently broadened its market by acquiring San Diego firm NeoMPS.

PolyPeptide provides custom and generic peptides for a range of pharmaceutical and biotechnology uses. Peptides are chains of amino acids involved in virtually every life process, such as helping to regulate body functions.

For example, if you take daily injections of Illinois-based Tap Pharmaceutical Products’ Lupron to treat prostate cancer, you’re getting a drug made with a PolyPeptide product.

The NeoMPS acquisition, the terms of which were not disclosed, bolsters PolyPeptide’s manufacturing capacity and its entrance to the growing cosmetic peptide business for products such as facial creams. NeoMPS also has an extensive catalog business, which PolyPeptide lacked.

“This is a great fit for us,” said Jane Salik, the group’s longtime chief executive. The Torrance operation employs 85 of the subsidiary’s 450 employees.

Mobile Blood Drive

Cedars-Sinai Medical Center, which opened its own blood bank 30 years ago to augment supplies from the American Red Cross, just received its first mobile blood-collection van.

“Los Angles uses much more blood than can be collected by the Red Cross,” said Dr. Ellen Klapper, co-director of transfusion services. “Our local Red Cross does an amazing job but even they have to import blood from other regions.”

The hospital transfuses 30,000 pints of blood annually, with the in-house program able to supply 10,000 pints.

The aim of the new van is to make it easier for companies and community organizations that support Cedars-Sinai in other ways to also hold workplace blood drives, much as the Red Cross does.

The hospital in the past has been able to transport equipment to set up a blood drive at a business, but was dependant on the company having enough room to accommodate the temporary setup. A private individual provided the money for the hospital to purchase the van.

“For our program to continue to be self-sufficient, we had to come up with a way to make it as easy and convenient as possible,” said Klapper.

Staff reporter Deborah Crowe can be reached at (323) 549-5225, ext. 232, or at

[email protected]

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