Hospital Staff Approve Deal for Integrated Healthcare Holdings To Purchase Orange County Hospitals From Tenet Healthcare
The medical staff at Western Medical Center-Santa Ana have ended their opposition to a deal for Costa Mesa-based Integrated Healthcare Holdings to purchase four Orange County Hospitals from Tenet Healthcare for $70 million, the Orange County Register reports (Wolfson, Orange County Register, 1/26).
The staff had opposed the deal because the principal investor in IHHI, physician Kali Chaudhuri, purchased and then closed a chain of medical clinics in 2000, affecting the medical care of 56,000 Orange County patients and 300,000 patients statewide. He also invested in clinics that failed in 2001 and 2002.
Doctors, activists, government officials and citizens have said that health care in Orange County could be jeopardized if the proposed deal were not carefully vetted. Medical staff members at the hospitals were concerned that the deal would siphon money from the facilities if Chaudhuri remained the principal investor.
Last week, Chaudhuri agreed to a deal under which he would own as much as 49% of the land upon which the hospitals sit and would have an option to purchase as much as 25% of the business in two years. The Orange County Physicians Network would replace Chaudhuri as principal investor (California Healthline, 1/24). The proposal must be approved by Tenet and the state.
According to the Register, the "last sticking point" between IHHI and the medical staff at Western had been whether the hospital could enter into business contracts with companies owned by Chaudhuri. The staff wanted "strict controls" on the deals, the Register reports.
Under the new agreement, any business deals would require approval by the hospital's medical executive committee. In addition, the doctors would receive three seats on the hospital's board, and IHHI has pledged to keep the hospital's trauma center open for at least two years with a one-year notice requirement if the company plans to close it.
Robert Steedman, Western's chief of staff, said, "As the medical staff, we no longer have a reason to oppose the sale."
Larry Anderson, president of IHHI, said officials for the Department of Health Services "seemed pleased" with the new agreement between IHHI and the doctors.
However, Sen. Joe Dunn (D-Santa Ana), who is mediating negotiations, said that the agreement does not ensure that the deal will be approved.
DHS spokesperson Lea Brooks said the department will make a decision on whether to approve the deal by Monday (Orange County Register, 1/26).