A hospital that is partially owned by billionaire entrepreneur Dr. Patrick Soon-Shiong is being leased by California to reopen and treat COVID-19 patients.
The Los Angeles Surge Hospital, formerly St. Vincent Medical Center, opened its doors on Monday as a COVID-19 hospital. Soon-Shiong proposed buying the shuttered hospital out of bankruptcy for $135 million, and has separately proposed to use the property as a coronavirus hospital. That purchase hasn't closed, but he holds the majority stake in Verity Health, the hospital's prior owner. Verity leased the hospital to California for use during the pandemic. The 266-bed hospital, the oldest in Los Angeles, will take overflow coronavirus patients from other hospitals that have reached capacity.
"COVID-19 is deadly enough, but when you add on top of that the decrease in availability of medical facilities, it becomes very difficult to treat these patients effectively," said Dr. David Quam, the surge hospital's chief medical officer.
In recent weeks, the state of California has led the effort to get the hospital up and running, including contracting with not-for-profit Kaiser Permanente and Dignity Health to provide management and technical support. Los Angeles County will oversee the transfer of patients to the hospital.
"We weren't quite sure what to think about it, but we said, 'Absolutely yes,'" said Julie Sprengel, president of Dignity's Southwest division and CEO of the new surge hospital.
The hospital is part of El Segundo, Calif.-based Verity Health, whose 2018 bankruptcy came about year after Soon-Shiong bought a majority stake in its management company. When he made the investment, Soon-Shiong promised to revitalize the hospitals by adding "groundbreaking technology" such as stem cell therapy. Verity closed St. Vincent in January after a proposed purchase deal fell through.
The bankruptcy judge also approved an asset purchase agreement for Verity's St. Francis Medical Center in Lynwood, Calif. Prime Healthcare said in a news release it's paying a $200 million base price for the facility plus $15 million in payroll and benefits. As part of the deal, Prime said it's investing $47 million to fund capital improvements, including technology investments and system upgrades.
Getting the vacant Los Angeles hospital up and running was a massive, coordinated effort that involved inspecting the facility and seeing which rooms could be safely reopened, Sprengel said. The team also built a pharmacy, laboratory and installed an electronic medical records system and imaging equipment, she said.
"Just because a hospital license might have a number, it doesn't necessarily mean that those rooms have been up and functioning as hospital rooms," Sprengel said.
The hospital reopened Monday with four intensive care beds and between eight and 10 stepdown medical-surgical beds, although that will increase depending on need and the availability of personal protective equipment and ventilators. The hospital can eventually host up to 266 beds, with up to 58 of those serving as intensive care beds.
"We will ramp up slowly just to make sure that our systems are tested," Quam said. "But once we get past that initial phase, we're ready to accept up to our capacity."
The surge hospital will only accept transfers from other hospitals, so it doesn't have an emergency room or public entrance, Sprengel said. In fact, the only two entrances are for employees and ambulances.
The judge overseeing Verity's bankruptcy approved the sale of the former St. Vincent hospital to Soon-Shiong on April 10. Initially, Soon-Shiong proposed purchasing the hospital through the Chan Soon-Shiong Family Foundation, a not-for-profit he and his wife, Michele Chan, established in 2009 with the stated goal of supporting healthcare innovations with a focus on the poor and underserved, according to court filings.
California's Attorney General, Xavier Becerra, objected to the sale, arguing in court filings it would amount to "self-dealing" by the foundation, because Soon-Shiong's company, NantWorks, LLC, is a creditor in the bankruptcy case. Becerra said part of the $135 million would pay all or part of the $66 million Verity owes to its creditors, including NantWorks, LLC.
Becerra's office did not immediately respond to a request for comment. Neither did an attorney representing Soon-Shiong's foundation.
Sprengel, CEO of the surge hospital, said although Kaiser and Dignity have separate cultures and protocols, they've come together as one to open the COVID-19 facility.
"We are truly one team for LASH," she said. "I'm just in awe of the healthcare workers that have come forward and want to be part of this and help flatten the curve and put an end to coronavirus."