Valley Health System Board Member Calls for Break With Chaudhuri
Citing large financial losses, a board member of the Hemet-based Valley Health System said yesterday that the public hospital district should consider terminating its management contract with Kali Chaudhuri, the Riverside Press-Enterprise. Chaudhuri has been a "subject of controversy" since his managed care firm KPC Medical Management went bankrupt in November. Speaking before an audience of 150 at a district board meeting, Darren Magness said that the district "should seriously look into" terminating Valley Health Care Management Services, the organization district officials and Chaudhuri created in 1998 to manage the hospital district. The public hospital system, which operates Hemet Valley Medical Center, Menifee Valley Medical Center and Moreno Valley Community Hospital, reported $2 million in losses between July and December, and Magness said that those losses gave the district the "legal right" to pursue a termination. However, John Marshall, the district's legal counsel, warned that cancelling the management contract could adversely affect the district's relationship with Hemet Community Medical Group, which is managed by Chaudhuri, and Hemet Global Services, a "physician management services firm" jointly owned by Chaudhuri and the hospital district. Mike Garko, Valley Health System's chief financial officer, said that these contracts are worth "millions of dollars a year" to the district, adding, "If the entire relationship were to come apart for whatever reason, I guarantee you Valley Health System would be in trouble."
In other Valley Health System news, the board yesterday voted to immediately raise patient fees by 45%. The increase is expected to net the district about $500,000 per year. Some doctors argued against the increase, saying it would hit the uninsured hardest, but Garko said that Moreno Valley hospital would continue to offer discounted services for "patients who demonstrate financial hardship." Valley Health officials also said that most privately insured patients would not be affected by the increase because it would be covered by their insurer (Saskal, Riverside Press-Enterprise, 2/8).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.