Santa Paula Hospital Negotiations With Ventura County Delayed Over Lease, Temporary Closure Provisions
Negotiations between the Santa Paula Memorial Hospital board and Ventura County about bringing the hospital into the county's heath care system recently have stalled because of disagreements over provisions of a 10-year lease and the hospital's failure to provide prompt disclosure of its debts and operating costs, according to documents the Los Angeles Times obtained Thursday under the California Public Records Act (Griggs, Los Angeles Times, 10/17). The Ventura County Board of Supervisors voted in June to begin negotiations with the hospital. Santa Paula -- the area's only general hospital and emergency room -- announced in May that the facility's debt had reached $3.7 million, that it was having difficulty making its $200,000 biweekly payroll and that late payments for medical supplies had led some vendors to withhold further deliveries (California Healthline, 10/16). As a result of the negotiation delays, Ventura County last week "strongly question[ed] whether this negotiation process should continue at all," according to a letter from county attorney David Henninger, the Ventura County Star reports (Wilson, Ventura County Star, 10/17). On Wednesday, officials at Santa Paula indicated that because negotiations with the county have not yet been productive, the hospital may affiliate with Community Memorial Hospital to prevent it from closing. CMH and Santa Paula officials are trying to work out a confidentiality agreement that would allow a CMH consultant to review Santa Paula's finances (California Healthline, 10/16).
Negotiations have stalled in part because the county would not agree to some of the lease terms proposed by the hospital. With regard to the proposed agreement, Henninger said that the county's "first obligation is to ensure that taxpayers are protected from financial and legal risks" and that the county wants control of all the property, a delay in rent, payments to be made on the condition of the hospital's profitability and full discretion over staffing issues, the Times reports. These provisions were not included in the original lease proposal, according to the Times. Michael McQueen, an attorney for the hospital, indicated that there was some negotiating room concerning lease provisions but said that the county had treated the lease as a purchase agreement, attempting to "control all the hospital property without assuming the obligations." Last Friday, Henninger said that the county would not be able to assume operations of the hospital until the spring because negotiations have been so slow and because the hospital had failed to provide full disclosure of its debts.
Henninger also said that the county recommended closing the facility until it comes under county management (Los Angeles Times, 10/17). He said the county believes a temporary closure is necessary to "resolve financial obligations, finalize negotiations and minimize risks to the community," the Star reports. However, hospital administrator Mark Gregson said that closing the hospital is not "in the best interest of the community or necessary or appropriate," adding, "This whole organization has been working diligently to see that doesn't happen" (Ventura County Star, 10/17).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.