A federal bankruptcy judge has ordered the closure of financially crippled ElaStar Community Hospital in Los Angeles, exacerbating what is already being called a dire emergency room shortage in Southern California's largest county.
ElaStar is the third Los Angeles County hospital to close this year, joining 213-bed Santa Teresita Hospital, Duarte, Calif., and 124-bed Century City Hospital, Los Angeles. The latter, which was shut in April after its former parent, Tenet Healthcare Corp., failed to renew its lease, is expected to reopen by year-end under its new owner, Salus Surgical Group, Beverly Hills, Calif.
Area health officials said last week they fear the loss of 110-bed ElaStar, which treated about 13,000 emergency room patients per year, will overwhelm neighboring hospitals and worsen treatment delays. Countywide, hospitals are already shut to ambulances about 36% of the time, according to the California Medical Association.
"We are already at the breaking point in Los Angeles," said Brian Johnston, a CMA board member and head of the emergency department at White Memorial Medical Center, one of two nearby hospitals that will likely see an influx of former ElaStar patients. "This is just one more blow to our fragile emergency-care system."
ElaStar, which primarily serves Hispanic immigrants, has amassed more than $10 million in debt and has been unable to pay its 400 employees, according to court records. It lost $3.2 million last year on revenue of $29.6 million, according to California's Office of Statewide Health Planning and Development.
ElaStar was founded in 1924 as Santa Marta Hospital and became part of the former Carondelet Health System, St. Louis, in 1994. Carondelet, now part of Ascension Health, sold Ela-Star to for-profit Star Healthcare Group in 2002, after the hospital racked up losses totaling $20.6 million over a five-year period.
Star Healthcare, Newport Beach, Calif., was formed in 2001 to acquire strug-gling not-for-profit hospitals and then employ for-profit management techniques to turn them around (March 11, 2002, p. 25). As part of its $4.5 million acquisition of ElaStar, Star Healthcare agreed to keep the hospital's emergency room open for at least five years. But after struggling to service its debt, ElaStar filed for Chapter 11 bankruptcy protection last fall. Unable to successfully restructure its finances, it was placed this month under Chapter 7 protection, which allows for a court-appointed trustee to begin liquidating its assets.
Officials at Star Healthcare and Ela- Star did not return repeated phone calls seeking comment.