Pasadena Firm Offers To Manage Santa Paula Memorial Hospital

Pasadena-based Kare Healthcare has approached leaders of Santa Paula Memorial Hospital -- a 49-bed facility that operated the only emergency department between the cities of Santa Clarita and Ventura -- about managing the facility if it reopens, the Los Angeles Times reports. Kare Healthcare, which is a new company, has yet to acquire any hospitals, but it controls "about a dozen clinics" in Southern California that receive about 300,000 patient visits annually, according to Allan Martia, one of Kare Healthcare's managing partners (Barnes, Los Angeles Times, 4/23). The hospital's board of trustees in December filed for Chapter 11 bankruptcy protection in federal court in Santa Barbara, three days after the board closed the facility. Documents filed with the court listed no claims or creditors, but board members have said that the not-for-profit hospital has debts of about $7.5 million and about 400 creditors. Last month at a bankruptcy hearing, hospital trustees said that they plan to offer Santa Paula Memorial and its property for general sale in less than 90 days unless a party comes forward to reopen the hospital. In addition, the Santa Paula City Council last month said that unless an agreement to reopen the hospital is reached by May 3, the council will consider takeover options, including the removal of the hospital board and condemnation of the land. The city also is considering an eminent domain action to acquire the 29-acre hospital property. The board will have the property appraised before making a decision on bids. The hospital board and the Ventura County Board of Supervisors have been negotiating since June 2003 in an effort to make Santa Paula Memorial part of the county health care system to allow the hospital to remain open (California Healthline, 4/20).

Gene Kaberline, the hospital's CEO, said he is "encouraged that we have someone at this point that thinks the hospital can be reopened," adding that if it is reopened, it would need to change its marketing and physician referral strategies and HMO reimbursement rates. According to Kaberline, any agreement to reopen the hospital would be temporary, and a new hospital eventually would need to be built. Kare Healthcare also has held discussions with Santa Paula Development Partners, which has offered to purchase Santa Paula Memorial. In addition, Greg Boyd, general manager of SPDP, met with the Santa Paula City Council last week to discuss the company's proposal (Los Angeles Times, 4/23).