Anaheim General will close in May - The Orange County Register

ANAHEIM ? Anaheim General Hospital, which made a rare turnaround two years ago after a near-fatal loss of federal funds, will go out of business in May.

The closure will result in the loss of 142 hospital beds at a time when Orange County hospitals are preparing to serve more patients because of the federal Affordable Care Act.

A view of Anaheim General Hospital, which will close in May.

BRUCE CHAMBERS, ORANGE COUNTY REGISTER

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An announcement memo to employees Monday came two weeks after the state Department of Labor Relations fined the hospital's owner, Tustin-based Pacific Health Corp., more than $7 million for failing to pay wages, issuing checks that bounced and collecting insurance premiums but not paying for coverage.

In the memo, administrators gave employees 60 days notice that the Ball Road hospital would close May 23.

"We would have preferred not to take this step, but all avenues to ensure continued operations have failed," wrote Brian Cotter, chief executive of Anaheim General.

In a letter sent Monday to the California Department of Public Health, Cotter told regulators that Anaheim General's affiliated skilled-nursing facility in Buena Park, which has 31 beds, will also close.

"I understand that anytime a hospital decreases services, the community is impacted," Cotter wrote. He promised that the hospital would work closely with the department "to insure a safe and effective plan of care for all our patients."

On Tuesday, the county's Emergency Medical Services department ordered ambulances to stop transporting patients to Anaheim General. Pacific Health said it would close the emergency department, also effective Tuesday.

The hospital owner issued a statement that cited the "especially challenging economic climate for all health-care providers."

"We issued the layoff notices to our employees with great regret, but we did so in order to comply with the federal regulations that require advance notification of pending loss of employment. It is our intention to resume services at Anaheim General at some time in the future," the statement read.

Anaheim, the county's largest city, has three other hospitals, including West Anaheim Medical Center, which is a little more than a mile from Anaheim General. But the closure comes at a time when the county's other 31 hospitals will need to serve more patients, said Julie Puentes, vice president for the Orange County office of the Hospital Association of Southern California.

"It is not good news anytime you have an emergency room and acute-care capacity lost right when we're gearing up to serve more people and make sure that the population is able to access services," Puentes said. "It is a loss. And it is disappointing."

On Tuesday afternoon, Anaheim resident Christopher Montiel left the Anaheim General emergency room with his son, who injured his foot while playing at school. He said he was shocked to learn of the closure.

"A lot of people around here use the hospital," Montiel said. "I personally don't use it a lot, but I was glad to know that it was here. They're really courteous, and they were really fast with my son."

Most employees declined to be interviewed, but phlebotomist Rupal Desai said she's looking for another job.

"They had a big employee meeting yesterday, but I missed it," Desai said. "Someone called me last night and told me that they announced the hospital is closing."

The decision comes after years of patient safety violations and financial struggles that were followed by an unexpected recovery for the hospital.

In July 2009, federal officials yanked Medicare and Medi-Cal funding to the hospital after a series of failed inspections. On one occasion, inspectors found the hospital lacked medication in the operating room to treat a potentially fatal reaction to anesthesia and had unsafe medical equipment, including dirty baby warmers.

Such funding is vital to hospitals and is rarely pulled. When it is, hospitals often go out of business, as was the case with Martin Luther King Jr./Drew Medical Center in Los Angeles.

The withdrawal of funding came after a series of other setbacks for Anaheim General, including loss of accreditation by the Joint Commission and closure of the maternity ward.

In late 2010, after operating without any payment from government insurers, Anaheim General regained federal funding. The turnaround took place after the hospital replaced 18 of 22 managers. The staff of 320 at the time underwent extensive training in infection control, preventing patient falls and medication safety.

But about six months later, in the spring of 2011, the hospital was for sale because it was losing money every month. Pacific Health declined to disclose an asking price or say how much money Anaheim General was losing.

In August 2012, Pacific Health took another financial hit when it agreed to pay the federal government $16.5 million after admitting to recruiting homeless people from Skid Row in Los Angeles to undergo unnecessary medical procedures that were billed to the government.

Prosecutors said Pacific Health admitted that from 2003 to 2008, three of its hospitals paid more than $2.3 million in kickbacks to recruiters who sent homeless men and women to fill hospital beds. Medicare and Medi-Cal paid nearly $16 million for their treatment.

In Orange County, Pacific Health also owns Newport Specialty Hospital, which provides long-term care in Tustin.

Earlier this month, the Department of Labor Relations fined Pacific Health Corp. $524,300 for late payment and payment of wages with nonsufficient funds. It also imposed a $6,537,000 penalty on the company for failing to provide complete and accurate itemized wage statements to employees.

Contact the writer: cperkes@ocregister.com 714-796-3686

Source: http://www.ocregister.com/articles/hospital-501344-anaheim-general.html

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