VENCOR: Will Close Burbank Long-Term Care Facility
Vencor Inc. announced last week it is shutting down its Burbank hospital because of Medicare cuts and delayed federal credentialing, the Los Angeles Times reports. Susan Moss, spokesperson for the Kentucky-based nursing home chain, "cited lengthy delays in receiving credentialing to participate in the federal Medicare program and cuts in Medicare reimbursements as reasons for the decision to close" the long-term care facility. She said Vencor Burbank "never housed more than five patients at a time since opening," and a company official said the facility currently only holds four residents and operates with a "skeleton staff." The Times reports that city officials were "surprised" by the hospital's closure because just two weeks ago they "met with hospital officials to encourage them to open an emergency room there." Since mid-1997, Burbank has only had one emergency room -- Providence St. Joseph Medical Center's -- for its 100,000 residents. "The bottom line is that we need a second ER in the hillside area," said City Councilman Bob Kramer. "The best scenario for the citizens would be if another hospital goes in there and agrees to bringing back an emergency room for the area. That's the best we can hope for," he continued.
The Times reports that Vencor's third-quarter financial statements "reported anticipating $17.4 million in pretax income from the sale of two hospitals," and Moss "confirmed one of those hospitals was Vencor Burbank, but would not disclose the name of the other facility." According to Vencor CEO W. Bruce Lunsford, the company "registered a pretax loss of $2.4 million in its third quarter and a $16 million anticipated loss in the previous quarter." Medicare and Medicaid cuts from the 1997 Balanced Budget Act "dealt a serious blow to the company," and a Florida investigation into Vencor's eviction of several Medicaid patients generated considerable "negative media attention." Vencor purchased the Burbank facility from Thompson Memorial Medical Center in July 1997 for $6.9 million after Thompson withdrew from the market upon losing its Medicare credentialing (Silva, 10/24).