Hospitals Urged to Delay Merger Until Audit : Medicine: Camarillo Health Care District also asked Pleasant Valley to consider rejoining the district.

The Camarillo Health Care District board voted Wednesday to ask Pleasant Valley Hospital to delay its merger with an Oxnard hospital until a financial audit of the Camarillo medical center is completed.

The board also decided to ask Pleasant Valley to consider rejoining the district, which opened the hospital in 1974 and then transferred it to a nonprofit corporation in 1983, rather than merging with St. John’s Regional Medical Center.

Board members made the decisions at a special meeting to consider seizing the hospital through its power of eminent domain. The board took up the issue in response to community concerns that the hospitals’ merger eventually would result in drastic reduction of services provided by Pleasant Valley or its closure.

Acting upon suggestions of board member Gary Norris, the board delayed voting on exercising its condemnation powers over the hospital. Instead, the board agreed to try a less hostile approach because, in part, they feared takeover costs would be too high.

Norris issued a public challenge for anyone to show a legal precedent supporting the contention of two local attorneys that the district could seize the hospital at no cost.

In the next week, Norris said the district-hired auditor will investigate whether the hospital’s proposed merger with St. John’s would constitute an antitrust violation by creating an unfair hold over the area’s health care market. If the merger goes through, St. John’s will operate the only two hospitals in the Oxnard-Camarillo area. The two hospitals are within seven miles of each other.

If Ernst & Young of Los Angeles decides the merger violates antitrust laws, the board voted to notify the U. S. Justice Department and Federal Trade Commission, which are reviewing the hospitals’ merger application. This notification, Norris said, could trigger a federal investigation.

The board also voted to ask the state attorney general’s office to decide if having Pleasant Valley Hospital reunite with the health care district would be better for the public than the proposed merger of Pleasant Valley and St. John’s.

At the same time, the district decided to ask the attorney general to determine if the hospital has researched all other alternatives to keep it financially viable.

Carol Keochekian, spokeswoman for Pleasant Valley, declined to comment on the board’s action.

Moe Kadish, a Camarillo resident, has been one of the strongest advocates for blocking the merger. Kadish, a veteran member of a national hospital board, urged a vote on eminent domain Wednesday because he said federal authorities could approve the merger application by as early as June 20.

Kadish spurred City Council members to support the audit after he showed evidence that Pleasant Valley has transferred $11.4 million to affiliated corporations in the past nine years.

Kadish reiterated a proposal Wednesday to have the district condemn Pleasant Valley Hospital, then find a different hospital group to run it.

James Jeffers, a merger opponent who is a former attorney for the district, said he sees the condemnation as their last chance to stop the merger between Pleasant Valley and St. John’s. “I think that it’s important if you’re going to act, you’ve got to act now,” he urged the board.

Many Camarillo residents and physicians have questioned official claims that Pleasant Valley Hospital faces economic ruin unless it merges with a financially healthier and larger hospital. Their concerns prompted the board recently to order a $25,000 audit of the hospital’s books.

Dr. Richard S. Loft, who practices at both St. John’s and Pleasant Valley, presented a petition opposing the merger, signed by 31 doctors who he said are responsible for 90% of hospital admissions.

Hospital officials, projecting a deficit of $3.5 million to $4 million by 1996, have said that Pleasant Valley would close without the merger.

Before the meeting, Dan Higgins, the hospital’s attorney, said eminent domain proceedings would not change the trends occurring in health care that are forcing the merger. He acknowledged, however, that the condemnation “would likely ruin any merger.”

Without getting into specifics, hospital officials said the merger would lower costs by eliminating duplication of administrative services at the two facilities.

“It was your desire to see that hospital health care continued to be provided in this community,” Keochekian told the board. The merger, she added, would do just that.