In my opinion, the most important thing about observational hours is to do them in a variety of settings. For example, orthopedic, neurological, pediatric, geriatric... And, I wouldn't think that doing them at any specific setting (USC, UCLA) would be more beneficial... unless you get a chance to meet the faculty, or have someone that knows the faculty write you a letter of recommendation. But, I would concentrate on doing multiple locations to get a diversified observational experience.