CAUTIONARY TALE? PRIME’S RECENT ACQUISITION IN REDDING
If you view a hospital system as a symbiotic relationship, then a foreign entity has the capability to throw order into disarray. Depending on your outlook, the hospital group hoping to purchase San Leandro Hospital–Prime Healthcare–is causing patients in the city of Redding quite a headache.
When Prime Healthcare purchased Shasta Regional Medical Center last year, it became the 13th acquisition in the burgeoning California hospital chains growing empire led by Dr. Prem Reddy. Prime claims a successful record of squeezing profitability from once-struggling hospitals with a combination of cancelling existing insurance deals and funneling patients through its emergency room. But, what is happening in Redding, could very well occur in Alameda County if the topsy-turvy hospital saga goes Prime’s way.
Shasta Regional’s main competitor–Mercy Medical Center–has been accused by state and federal health services agencies of violating anti-dumping patient laws which obligates a hospital to care for any patient until they are deemed in stable condition or transferred to another hospital. In the meantime, medical insurance companies went to war with Shasta Regional and retaliated for Prime dissolving their existing contracts. The insurance companies notified members of the community Shasta Regional would be labeled “outside of network provider” and urged them to visit Mercy, instead.
Mercy now claims the massive influx of patients is overrunning its capacity to provide quality health care. The hospital was recently given 10 days to improve care.
As the current controversy in San Leandro continues to take bizarre twists and turns, many residents routinely question the lack of attention given to Prime’s splashy offer last June to run the hospital. Local officials say, despite Reddy’s rousing speech to save the hospital, the company has not made a detailed, formal proposal, while many believe no takers will be closely looked at until the Sutter Health makes a move.
Speaking to reporters after last week’s Alameda County Board of Supervisor’s meeting, former Director of Health Services David Kears said he believed Prime “carries too much baggage”, while their business model could bankrupt the state’s health care system. There is little doubt that controversy seems to run in tandem everywhere Reddy and Prime sets foot. It has occurred in San Diego, Los Angeles County, in continued litigious battles with Kaiser Permanente, and numerous insurance companies and now in Redding. Time will tell if the ultimately solution for San Leandro Hospital is Prime, for now, officials say they are off the radar.