Movie Fund Set to Close Housing Unit for the Aged

By Michael Cieply, NY Times.com

August 25, 2009

Residents of the Motion Picture and Television Fund’s long-term-care unit have been notified that they need to find new homes by year’s end.

In a favorite movie plotline, victimized small fry strike back against the operators of a corrupt and heartless system. As in “Erin Brockovich.”

Usually, though, Hollywood isn’t cast as the villain.

The Motion Picture and Television hospital.

On Tuesday some 78 residents of a long-term-care unit and associated hospital in the San Fernando Valley — an operation that has tended generations of elderly movie stars, character actors, directors, crew members and others, along with their dependents — received word from the site’s operator, the Motion Picture and Television Fund, that it would go ahead with plans to close the two by year’s end. The residents can now expect what amounts to an eviction notice in coming weeks if they do not accept the fund’s help in finding a new home or otherwise relocate.

The notification, which comes after months of turmoil over the proposed closing, is expected to result in a lawsuit by residents and others against both the fund and the Hollywood producers, executives and union leaders on one or more of its governing boards. 

Mediation between the sides failed in July. In good cinematic style, the fight pits big guys against some very fragile little ones. 

“When they’re put out, they die,” said Patricia Alexander, whose husband, Hal, an 86-year-old former actor and television director, is a resident. 

Asked where her husband, whose credits include “The Flip Wilson Show,” would go if the unit were closed, Ms. Alexander said: “We’re not closing. I haven’t looked. Don’t ask me that.”

But the dispute also points to deep and perplexing changes in care for the old.

“We’re on the precipice of a transformational era around aging services,” said Larry Minnix, president of the American Association of Homes and Services for the Aging. Mr. Minnix said rising costs, diminishing support and a growing tendency among the elderly to remain at home as long as possible were eliminating relatively small hospital-residential facilities like that operated by the fund.

Apparently, the courts may now have to decide whether a charity whose various boards include the likes of Jeffrey Katzenberg of DreamWorks Animation, Jim Gianopulos of 20th Century Fox, Jay D. Roth of the Directors Guild of America, the filmmaker Nora Ephron, the investor David Geffen and Warren Beatty is stepping on Hollywood’s needy or simply dealing with health care’s new reality. 

The letters and anticipated lawsuit were the most serious crisis to date in a melodrama that has been playing out on Web sites and in news reports here since the fund — long regarded as Hollywood’s favorite charity — first said it could not afford to operate the 150-bed hospital and care center without endangering its other assisted-living and health care operations. Those serve about 60,000 people.

According to Dr. David Tillman, the fund’s chief executive, more than 20 residents have accepted help in finding beds elsewhere, including at the nearby Los Angeles Jewish Home and a center in Portland, Ore., to which the fund moved a resident at its own expense.

More drama lies ahead: Among the lawyers who have been working with the residents and their families is Thomas V. Girardi, a litigator on whom a character played by Peter Coyote in “Erin Brockovich,” about a small town’s fight against pollution by the Pacific Gas and Electric Company, was loosely modeled. The Girardi & Keese firm, which has its own weekly radio show here, “Champions of Justice,” bills itself as a specialist in “passionate litigation with corporate giants.”

Legal action may help sort through claims that have turned the dispute into a crucible for debate about the sustainability of premium care for an aging population and about whether Hollywood’s wealthiest power brokers are turning their backs on their own during hard economic times.

The fund’s initial decision to close the unit — once a refuge for aging stars like Hattie McDaniel, who had an Oscar from “Gone With the Wind” — followed a report by the Camden Group, a consulting concern that in January said the residential unit and hospital were dragging the fund toward bankruptcy.

According to Camden, high labor costs, stagnant or declining reimbursements from state and federal health care programs, sharply reduced investment income and declining philanthropic support resulted in a $24 million deficit in 2008. A projected shortfall averaging about $16 million over the next five years, the group said, threatens to exhaust the fund’s net investment reserves of about $68 million by 2013.

About half of a projected operating deficit of $23 million annually — only some of which is expected to be made up by donations and investments — was attributed to the long-term-care unit, making it a prime target for a cutback.
But public financial statements through 2007 actually showed growth in net assets, leading to furious criticism from residents and commentators. Those objecting were particularly galled by the disclosure that Dr. Tillman received a pay increase of about 40 percent from 2005 to 2007, raising his compensation to about $600,000 at a time when the fund’s finances were supposedly deteriorating.

Marty Katz, a partner with Mercer Consulting, which advised the fund regarding Dr. Tillman’s pay, said the compensation figure — which combined salary with performance-linked bonus payments — was slightly below the median for comparable executives when the bonuses were excluded and slightly above the median when they were counted.

By last year, however, the pain was visible in the fund’s audited financial statement: in 2008 net assets, hurt by investment losses, declined by 26 percent, to about $168.8 million.

Reviewing various proposals under consideration in the national health care reform debate, the fund’s advisers concluded that hospital reimbursements were likely to shrink. “Health care reform does not come and save the day for us,” said Steve Valentine, the Camden’s Group’s president.

“New management” is the cure recommended by Nancy Biederman, whose mother-in-law, Jane Biederman, has been a resident for nine years, and whose mother, the television writer Irma Kalish, served on two of the fund’s boards before resigning this year. Ms. Biederman said she believed the fund’s reported financial crunch was a “created crisis,” intended to help Dr. Tillman, who formerly ran the organization’s clinics, toward an expansion of clinical care. 

But, said Bertram Fields, a well-known Hollywood lawyer who has been representing the board members pro bono, some of the more volatile claims in the debate are rapidly damaging the fund’s ability to help anyone at all. “They’re defaming the staff,” he said.

An inevitable argument has held that Hollywood’s rich and famous could simply give a little more. 

The actress Diane Ladd, quoted on an anti-closing Web site, savingthelivesofourown.org, as reprimanding the industry’s wealthy for permitting the shutdown, said on Monday that she and a handful of allies were scratching for a solution on their own.

“I’m crying over those people in that nursing home,” said Ms. Ladd, who is joining Ed Asner, Elliott Gould and others to host a fund-raiser this weekend. Proceeds are intended both for the Membership First faction of the Screen Writers Guild and for assistance to the soon-to-be-displaced residents — but not for the once-golden fund.

“This is a tragedy in our time,” Ms. Ladd said. “My God, it’s been there since Mary Pickford.”

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