Pacifica Hospital Purchased by Newly Formed Investor Group : Acquisition: Facility was part of chain whose founder allegedly stole as much as $4 million from it. He is being sought.

Pacifica Hospital in Huntington Beach, whose owner is being sought for allegedly stealing as much as $4 million from the hospital chain he founded, has been bought by a newly formed investor group.

Thomas J. Broderick, president of the hospital’s new owner, Pacifica Care Center Inc., said he hopes that the 103-bed facility can build a solid reputation as a local hospital.

Pacifica Hospital was one of five community hospitals owned and operated by now-defunct Affiliated Medical Enterprises Ltd., based in Orange, which has been under federal bankruptcy court protection for two years.

Affiliated’s owner, Dan S. Young, who founded the business in 1986, is allegedly in China after making off with funds that were under the court’s jurisdiction. He is reportedly hoping to open a hospital in Beijing for Americans living in that country.

The Huntington Beach hospital was sold to Pacifica Care Center in late December after an unsuccessful attempt by Young to buy the facility from his own failed company.

Affiliated is also negotiating the sale of four other hospitals, in Sun Valley, Ojai, Palmdale and Portales, N.M. Broderick said his group is not interested in obtaining the other four.

“Our major interest right now is to turn this hospital right around,” said Broderick, 61. “We don’t have any other hospital on our agenda.”

Broderick, who headed the Huntington Beach hospital when it opened in 1970, said he teamed up with other investors to buy the company that formerly employed him. The price, he said, was about $5.5 million. Those investors are Craig Johnson, who is head of a management firm in Yorba Linda, and Burr Dilday, who owns a mortuary chain in Huntington Beach and Long Beach.

Broderick said he and his partners considered joining forces to purchase Pacifica Hospital a year ago, when it and its sister facilities were already under bankruptcy court protection. Affiliated Medical Enterprises was forced into bankruptcy when it could not pay debts it took on when it bought the five hospitals.

Vying with Broderick for the Huntington Beach hospital was Hiawatha Investment, which an attorney for creditors described as a dummy corporation controlled by Young. In October, when Hiawatha was given its final opportunity to make a bid, Young was still head of Affiliated Medical Enterprises.

Quorum Health Resources Affiliated, a hospital management firm in Nashville, Tenn., has since taken control of Affiliated Medical Enterprises and is seeking to sell the four other hospitals.

Broderick did not learn about the scam allegations until December, when Young and his daughter, Rebecca Hume, 28, disappeared.

“We were as taken aback as anyone else,” Broderick said.

Bob Crockett, a lawyer representing a long list of Affiliated Medical Enterprises creditors, has said the U.S. ambassador’s office in China has confirmed that Young is, indeed, there. It was not known, however, whether Hume was with her father overseas.

Broderick, who left Pacifica in 1972, went to work as chief executive for Hemet Valley Hospital District, a 545-bed acute-care hospital system with facilities in Hemet, Sun City and Moreno Valley.

Broderick said he plans to expand services at the Huntington Beach hospital and launch a marketing campaign that will help the facility stay solvent in the years ahead.

“We thought we could change its direction,” Broderick said. “It’s been well run, but we think with a little guidance we can even prosper in this rather difficult environment out there.”

Broderick was referring to the growing trends of outpatient and managed care services. Hospitals across the nation are being stung by managed care, a concept that often calls for doctors to save money by reducing the number of days that a patient stays in a hospital. Offering medical services on an outpatient basis, thus minimizing hospitalization, is another technique being used to cut costs.

Pacifica Hospital will eventually institute an outpatient surgery center, Broderick said, and possibly expand its facilities.

In addition to strong marketing, Broderick will seek contracts with health maintenance organizations and other doctor groups to bring in business, he said. He also hopes to add a physical therapy component to the hospital.

Alpha Group, a medical management consulting firm in Santa Ana, has been contracted to help run the hospital, Broderick said. Alpha Group already manages Western Medical Center in Santa Ana and Anaheim.