CHW: Hospital System Faces State Probe over Facility’s Closing
Although Catholic Healthcare West closed St. Louise Hospital -- Morgan Hill's only hospital -- last December, a state attorney general's office investigation of not-for-profit hospitals may "help in efforts to reopen" the facility, the Silicon Valley/San Jose Business Journal reports. CHW closed the hospital after purchasing nearby South Valley Hospital in Gilroy, which the group renamed St. Louise Regional Hospital. According to Morgan Hill Mayor Dennis Kennedy, "CHW has been using predatory, monopolistic tactics to capture the market, and it has hurt Morgan Hill and our ability to provide medical services to our community. ... I'm happy to hear the attorney general is looking into this." State Attorney General Bill Lockyer (D) said that he has "long been concerned" about the sales and closings of not-for-profit hospitals in California (Caldwell, Silicon Valley/San Jose Business Journal, 10/2). Lockyer recently launched a statewide investigation to determine whether CHW is in violation of "laws governing charities and anti-competitive behavior" (California Healthline, 9/27). "My staff is currently reviewing the relevant information to determine if there is a legal basis for asserting jurisdiction at this time in the St. Louise Hospital closure situation under current law," Lockyer said. However, Wade Rose, vice president for policy and planning for CHW's Bay Area region, said that the attorney general's office had not contacted the group. "We're scratching our heads over this," Rose said, adding, "We had discussed the sale with the attorney general's office four times prior to the sale, and we had no indication ... there were any issues." Kennedy suspected that a state probe would target CHW's "alleged concentration of market power," adding that the closure of St. Louise Hospital forces patients to travel 20 to 25 minutes to Gilroy for treatment. "It's difficult to get to ... since it doesn't have immediate freeway access, especially if you're not familiar with the area," Kennedy said, adding, "That has put our community at risk." Rose disagreed, arguing, "The county reviewed the closing before and found the (Morgan Hill) community was not put at risk" (Silicon Valley/San Jose Business Journal, 10/2).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.