NOT-FOR-PROFIT HOSPITALS: Lockyer Launches Investigation
The pending closure of Long Beach Community Medical Center has prompted California Attorney General Bill Lockyer (D) to commence an "unprecedented" statewide investigation to determine whether Catholic Healthcare West, owner of the Long Beach hospital, is in violation of "laws governing charities and anti-competitive behavior," the Los Angeles Times reports. At a time when many California hospitals are closing and consolidating in light of fierce financial pressures, critics contend that not-for-profit hospitals are similarly disregarding community care for budgetary reasons. As a result, the new investigation may signal "a new period of scrutiny for the state's not-for-profit medical centers." Lockyer aides said yesterday that the attorney general, who maintains authority to regulate charities like not-for-profit hospitals, may look beyond Catholic Healthcare West into the practices of other hospitals as well. The investigation is likely to focus on two main areas. The first is "asset diversion," in which CHW transports equipment or money between its hospitals. The second is "consolidation and closing of hospitals" to see whether hospitals "violate the not-for- profits' duties to aid the public and whether such closings so damage health care competition that they run afoul of anti-trust laws," officials said. The Long Beach coalition of citizens trying to save the community hospital welcomed the news of the probe, but remain concerned that the investigation will do little to prevent the closure of the facility next Monday (Mathews, Los Angeles Times, 9/27).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.