QUEEN OF ANGELS: Catholic Hospital’s Sale Stirs Debate
In another "showdown ... emblematic of a national debate over whether for-profit entities can reliably assume the charitable missions of nonprofit community or teaching hospitals," the battle over the proposed sale of Catholic Church-affiliated Queen of Angels-Hollywood Presbyterian Medical Center to Tenet Healthcare Corp. "has come to a head." Cardinal Roger Mahoney is "threatening to take the matter to the Vatican if the transaction" between the hospital and for-profit Tenet "is not halted by today," the Los Angeles Times reports. Tenet, the second-largest hospital chain in the nation, wants to purchase Queen of Angels -- "a pivotal provider of millions of dollars in charity care each year to mostly minority and immigrant residents of East Hollywood" -- for more than $86 million. While the cardinal has ordered the hospital to "cease and desist from the proposed sale," Queen of Angels officials have "vowed to see the transaction through as proposed." The hospital stated yesterday that it is a lay corporation to which "canon law does not apply." Tenet "says its interest in the deal 'is undiminished.'" The Times notes the "issues are legal and moral, secular and, some would say, sacred."
The cardinal's "ultimatum," is only the latest vocalization in the "escalating dispute" that "pits the cardinal, the hospital medical staff, a community coalition and a labor union against a hospital board eager to sell and a health care giant eager to buy," the Times notes. Consumer advocate Lark Galloway-Gilliam, a leader in a community coalition opposing the sale, said, "This is a big one ... because it is such an important player in the county's safety net system. ... It opens the floodgates for the ... tensions over for-profits taking over the health care industry." Community advocates are primarily concerned "that key services such as obstetrics and emergency care will be lost to a community that is already underserved." Gilliam said, "We don't say a for-profit cannot (ever work) but I think there is a general sentiment of skepticism."
Local government officials also are leery of the sale. Councilwoman Jackie Goldberg is involved in the community coalition opposing the sale. The state attorney general's office, which must approve all sales of nonprofits to for-profits, is deferring its authority to the church. "According to a letter to the hospital from the California attorney general's office this week, Queen of Angels is bound by its current bylaws to adhere to the canons of the Roman Catholic Church, which is subject to interpretation by Mahoney," the Times reports. "What we've said, essentially (to the hospital) is you have to do something to deal with this," said deputy attorney general James Schwartz, who is overseeing the matter.
Mahoney maintains "his approval is needed for the sale" and believes that "in health care, profit-making and charity don't mix." Explaining his position, Mahoney wrote last year, "As health care becomes more and more viewed as a commodity to be sold for profit rather than as a public good, the basic values and principles which have maintained the integrity of health care delivery have become compromised." However, as the Times notes, "even an archbishop's opposition might not be an insurmountable barrier." Today, Tenet will officially assume ownership of St. Louis University Hospital -- another hotly contested sale that, despite Archbishop Justin Rigali's strong public opposition, received the Vatican's blessing just this week.
"Tenet officials argue that there is no inherent contradiction between community service and for-profit status." Under terms of the sale, Tenet has "guaranteed" not to cut essential services, promised to allocate $15 million annually for charity care and said it would transfer "the $100 million in sales proceeds ... to the former hospital's nonprofit foundation" and use it "to support a network of clinics and community-based services." However, community advocates are not appeased, arguing "Tenet left itself some loopholes in the contract that would allow it to drop emergency and obstetrical services" and contending the $15 million figure for charity care "is low and does not allow for increases" (Marquis, 2/27).