Attorney General Declines To Intervene in Hospital Closure
State Attorney General Bill Lockyer (D) on Thursday declined to use the state Corporations Code to prevent the voluntary closure this week of the 209-bed Northridge Hospital Medical Center-Sherman Way, the Los Angeles Times reports.
Catholic Healthcare West, which owns the hospital, announced in August that it would close the facility by the end of the year because of monthly losses of more than $1 million. A group of doctors has been trying to raise money to purchase and operate the hospital. According to the Times, a private developer is in negotiations to purchase the hospital and turn it into an assisted living facility.
Los Angeles City Council member Tony Cardenas and about 50 members of the Save Our Valley Healthcare Coalition rallied in front of the emergency department Thursday asking Lockyer to "re-review" the Corporations Code. Cardenas said the code requires that not-for-profit medical facilities get approval from the attorney general before selling any property or liquidating significant assets, the Times reports.
Stacy Bellew, a member of Cardenas' staff, said the council member "feels there is one last hope," adding, "They should be putting this facility on the market and accepting other offers from people who want to keep it a hospital."
Lockyer's office said the code does not apply to hospitals that already have closed. However, Lockyer spokesperson Tom Dresslar said the attorney general is looking into allegations that Catholic Healthcare West made "breaches of fiduciary duty" in negotiating the sale of the hospital. Dresslar added that even if the allegations were proven true, "the remedy would not be to resurrect the hospital." He added, "Under California law, unless there are extraordinary circumstances, this office has no power to intervene to prevent the closure of a not-for-profit hospital" (Thermos, Los Angeles Times, 11/19).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.