A coalition of physicians and private citizens will reopen a scaled-down version of Long Beach (Calif.) Community Medical Center after getting the nod last week to negotiate a lease with the City of Long Beach.
The Save Our Neighborhood Hospital Committee, a grass-roots coalition of about a dozen local physicians and residents, beat out bids from Nashville-based, for-profit Vanguard Health Systems and two other area hospital operators for the exclusive negotiations. The facility could reopen--operated by a not-for-profit corporation formed by the Save Our Neighborhood Hospital Committee--as soon as Dec. 1, said Robert Pugach, M.D.
A Long Beach urologist, Pugach is the Save Our Neighborhood Hospital Committee's president.
"As we understand it, the city really liked the fact that we were a local entity and would continue operating the hospital on a high level," Pugach said.
The Save Our Neighborhood Hospital group might have a tough road ahead of it. In other parts of the country, physicians who have tried to own or operate hospitals have encountered significant financial obstacles (Aug. 28, p. 2).
The Save Our Neighborhood Hospital Committee was formed shortly after San Francisco-based, not-for-profit hospital chain Catholic Healthcare West announced last June that it would close the 278-bed facility because of losses totaling $38 million over the past five years.
CHW shuttered Long Beach Community on Sept. 29 but agreed after criticism from community activists--including the Save Our Neighborhood Hospital group--to suspend the facility's license and transfer title to the city with the intent of letting another operator reopen the hospital.
Pugach said directors for the hospital board have yet to be chosen, but it would likely contain a mix of physicians and community representatives.
Pugach said operating the facility on a smaller scale--with about a quarter of the beds and eliminating such tertiary services as the neonatal intensive-care unit--would ensure its profitability.
"CHW had sacrificed appropriate levels of reimbursement to keep its census up, and we're not going to make the same mistake," he said.
Pugach added that his organization would line up as much as $18 million in capital to operate Long Beach Community, including an anticipated $4 million in donations from Long Beach residents and loans from other undisclosed sources.
CHW's closure of Long Beach Community has drawn scrutiny from California Attorney General Bill Lockyer.
He announced late last month that his office would examine the way CHW handled charitable assets connected with Long Beach Community and 55-bed Saint Louise Hospital in Morgan Hill, just southeast of San Jose.
CHW closed Saint Louise last year and sold it last spring to San Jose Christian College, which plans to convert the facility for educational uses.
In a written statement issued on Oct. 11, CHW denied that the charitable assets of either hospital had been mishandled. It noted that under California law, their charitable missions could be continued by other nearby CHW-owned hospitals. Similar assertions were made by CHW attorneys in an Aug. 3 letter to Lockyer's office.
CHW spokeswoman Lori Aldrete said the investigation by Lockyer's office would not specifically focus on CHW, which operates 48 hospitals in Arizona, California and Nevada.
But Attorney General spokeswoman Sandy Michioku said the investigation was centered on "how CHW manages its hospitals," and was linked to the Long Beach Community and Saint Louise closures. Sources close to CHW's legal counsel confirmed that it had yet to receive a formal notice from Lockyer's office that it was being investigated.
In another matter, CHW confirmed it was examining potential sites in the Phoenix area to build a new acute-care hospital. A CHW spokeswoman stressed that the assessment was in its preliminary stages and that no further details were available. CHW now operates two hospitals in the Phoenix area.