Does Prime Healthcare watch Palomar Health?

Amid the ongoing medical group contract changes at Palomar Health, some doctors and other medical staff are clawing back financially disadvantaged hospitals and making major changes in staffing, billing and operations. I question the connection to Prime Healthcare, a private sector known to do this.

Dr Marcelo Rivera, a physician, former Palomar board member and lead physician at Palomar Medical Center Poway, certainly speculates on Prime’s possible role and has been explicitly denied by the government. Mentionned.

“I’ve heard people say, ‘This is the first step in privatizing the health care system and introducing Prime,” Rivera said last week. “It is no exaggeration to say that people in the health care system are afraid that this is about privatizing the health care system and that Prime could be a major player.”

Dr Michelle Pfeiffer, who has said he will be leaving Palomar under current contract status, said in an email Monday that he had heard the same speculation that had been “raised by doctors as a concern”.

Palomar CEO Diane Hansen denied the PM’s speculation in her own statement late last week.

“There is absolutely no truth to the unfounded rumors that Palomar Health has been acquired by Prime Healthcare and other organizations,” said Hansen.

So why does it seem like so much gossip is spreading in the hallways of the two large hospitals of Escondido and Palomar in Poway?

There are two main facts that fuel the behind-the-scenes discussions:

First, Palomar recently hired Michael Bogart, former CFO and CFO of Prime’s old hospital system, as the new CFO.

Boggart profile On the job site, LinkedIn, whose previous position was at the firm level, oversaw 34 senior CFOs in charge of finance for “45 hospitals and a total of 118 entities currently in 14” and “new” states. He was deeply involved in identification, due diligence and onboarding. “A first-rate family hospital with 23 additional hospitals since January 2014.”

Second, a significant proportion of the hospitals represented by Emergency Medical Associates, a medical group signed by Palomar last week, are blue chip properties. By comparing the list of representative facilities listed on the two organizations’ websites, we can see that 10 of the 22 hospitals listed on the EMA website are owned by Prime. The medical group represents 10 physicians at 17 Prime California hospitals.

These facts have been discussed in recent weeks as more than 100 Palomar doctors consider contracts with the EMA and its subsidiary Benchmark Hospitalists & Intensivists.

Due to disagreements over potential workload changes, some Palomar doctors, nurses and others have demonstrated outside Palomar Medical Center Escondido in recent weeks. The medical executive committees of the two hospitals responded to a vote last week indicating they were not confident in their administrative leadership.

Prime was asked if he was interested in Palomar and released a single paragraph statement that he will not discuss future acquisition plans regardless of the particular facility.

“To carry out our mission of rescuing and transforming hospitals, Prime Healthcare is constantly evaluating potential acquisition opportunities in new and existing markets, but has commented on the details of the acquisition development strategy. It is company policy not to do so. “

Dr Irv Edwards, founder and chairman of EMA, said in an email that his company has staff at several top hospitals, but that doesn’t mean there is a strong connection between the two hospitals. It was.

“There is no relationship between EMA and Prime Healthcare other than the same contractual services that Palomar Health offers,” said Edwards.

Doctors have experience close to Prime. Edwards confirmed in an email that he previously served as chief of staff at Chino Valley Medical Center and resigned that post two years ago. Prime purchased the facility in 2004.

He said Vituity, one of the largest medical groups in the United States and EMA’s replacement company Palomar, also had staff at Prime Hospital in Southern California.

Hansen, CEO of Palomar, pointed out the same, noting that the connection with former Prime staff and affiliates was simply strategic.

“It’s true that our CFO worked at Prime in the past, but he’s now an integral part of the leadership team and uses his industry knowledge to help us across the community. It helps develop my service, ”said Hansen’s statement. “I can absolutely say that no one else on the leadership team at Palomar Health talks to anyone at Prime Healthcare and has no financial interest in Prime.

“In addition, EMA has service contracts with several main hospitals, while Vituity also has service contracts with several main hospitals.”

Prime states on its website that it pays taxes, suggesting that it is a for-profit organization and that it also operates 14 non-profit establishments through the Healthcare Foundation.

Made by an Ontario company Title In 2018, 14 California hospitals paid a $ 65 million settlement over allegations by whistleblowers alleging Medicare billing fraud. The case began with a sealed complaint from the director of nursing at Alvarado Hospital in La Mesa. He received over $ 17 million in settlement and did not accept responsibility from Prime. A small amount of $ 1.25 million regulation This continued in 2019 by filing bogus health insurance claims on behalf of two major hospitals in Pennsylvania.

According to a statement released by the U.S. Department of Justice in 2019, the company is requiring the hiring of an “independent review body to review the accuracy of the company’s claims regarding services provided to Medicare beneficiaries.” . Signed the “Sex Agreement”.

But the medical system Not shy Noting that the latest spring 2021 report from nonprofit healthcare quality assessment company Leapfrog Group recently won numerous quality awards, including 22 hospital safety “A” ratings.

According to Prime, Christopher Whey, a health economist at RAND Corporation, an international policy research firm, started out at a single facility in the high deserts of southern California and is growing rapidly across the country. Famous for

“It started with the acquisition of hospitals in their own market, but in reality it is moving and expanding into acquisitions in new markets,” Whaley said.

The main growth occurred as hospital acquisitions increased nationally as the healthcare system sought to expand enough to take advantage of economies of scale, especially in terms of contract negotiations with companies. health insurance. He said.

But recently, acquisition activity has waned, Whaley said. Much of the attention has shifted to the medical group of physicians. Healthcare groups excel at the kinds of quality metrics that many insurers use to determine which facilities to contract, such as operational efficiency and readmission of patients after discharge.

At first glance, Palomar doesn’t look like a typical primary acquisition target. At least it follows the company’s previous models anyway.

Who watches the Ontario-based company as closely as Erik Dimitruk, senior research analyst at the Service Employees International Union, who represents thousands of healthcare professionals across the state and clashes with Prime over disagreements between the staff. Almost none.

Dimitrque said the trend seen in Prime’s recent acquisitions has focused on small community hospitals which have fully purchased their assets and are experiencing very serious financial difficulties.

“Usually they are the only ones who are ready to come in and take over the hospital,” he said.

He added that once that is done, downsizing often occurs soon after.

“The company has shown a common tendency to impose workforce reductions, including layoffs, and to cut and eliminate certain services,” Dimitrque said.

Take a look at Palomar’s latest review, Publish publicly The website shows that this is not a health system that is actively flowing through the sewer.

As of March 31, medical districts showed that hospital operations exceeded spending by $ 23 million and physician groups had lost $ 17 million. Overall, the organization’s overall financial position was at or slightly below the breakeven point in 2021 when balancing large interest payments with the $ 37.5 million property tax revenue received by the district. It looked like it was. May and June are not yet listed.

Probably better than expected after a pandemic that places an unprecedented financial burden on the entire medical industry and hospitals large and small across the country are posting serious losses due to the halt in surgery and procedures and loss of surgical capacity. Probably.

But Kaiser Permanente Currently under construction North San Diego County’s first hospital, slated to open in late 2023, is right next to San Marcos.

Due to the fact that Palomar was not long the only hospital operator east of Oceanside and north of Encinitas, he now needs to build muscle mass.

For years Palomar was no stranger to talking to other sales operators. In the late 1990s, Palomar’s board of directors began extensive negotiations with Scripps Health on purchase agreements that required a general vote for residents of all districts to agree or disagree. Since 1991, the contract eventually collapsed, as did Sharp Healthcare’s proposal to run hospitals on behalf of the district, like the Grosmont Healthcare district in East County.

Nothing has changed, confirmed Cathy Martin, executive director of the California Healthcare District Association. Voters must approve the sale of Palomar.

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