Pacific Health Shutters Four Hospitals
After years-long entanglements with state and federal authorities that cost it millions of dollars in fines, Pacific Health Services is suspending operations and closing its remaining four Southern California hospitals.
In a statement issued earlier this week, Pacific Health said it would suspend services at its four remaining facilities: Bellflower Medical Center, the two campuses of Los Angeles Metropolitan Medical Center, and Newport Specialty Hospital.
An average census count was unavailable from Pacific on Wednesday afternoon, when the suspensions, including closures of its three remaining emergency rooms, went into effect.
Pacific suspended operations at its fifth facility, Anaheim General Hospital, last month. It said it is in the midst of transferring patients to other facilities. Altogether, Pacific operated 673 inpatient beds.
Although Pacific spokesperson Gary Hopkins said the company was “currently evaluating all options to resume services at the hospitals,” reopening the facilities would likely require a costly and time-consuming relicensing process.
Pacific has been hemorrhaging money: In 2010 and 2011, it reported a combined loss of $61.3 million on revenue of about $138 million, according to data it submitted to the Office of State Health Planning and Development.
The announcement from Pacific, a for-profit operator based in Tustin, comes just a couple of weeks after it was fined $7 million by state regulators for bouncing paychecks to hospital employees and not providing accurate accountings of their wages. The California Labor Commission also determined that Pacific had been making deductions from employee paychecks for healthcare insurance but not paying premiums to its carriers.
Altogether, about 1,900 employees are expected to be laid off as a result of Pacific's decision to suspend operations, Hopkins said.
Jim Lott, executive vice president of the Hospital Association of Southern California, said the greatest concern regarding the suspensions come from the loss of the emergency services it provided.
“Excess emergency room capacity does not exist in Los Angeles, so the closure of even one hospital emergency room adds to the stress on over-burdened hospitals that have to tuck in the slack,” he said.
Last year, a Pacific subsidiary known as Los Angeles Doctors Hospital Inc., pled guilty to federal fraud charges, while Pacific Health and its parent company agreed to pay a $16.5 million settlement. Federal prosecutors claimed the companies had conspired to recruit homeless people to undergo unnecessary procedures at three of Pacific's hospitals and then billed the Medi-Cal and Medicare programs for the services.
The long-term criminal investigation involving the scheme prompted then Attorney General Jerry Brown from blocking the sale of Anaheim Memorial Medical Center to Pacific in 2008.
Also in 2008, the Joint Commission withdrew its accreditation of Anaheim General Hospital, citing safety issues at the facility.
