Private Hospital Dealt 2nd Blow in Fight for Patients

Community Memorial Hospital lost another round in its fight to keep paying patients from being treated at Ventura County’s public hospital, when a state appeals court Tuesday upheld a lower court ruling that county treatment of private patients is not unfair competition.

Justices on the 2nd District Court of Appeal in Ventura ruled that the county had not overstepped its authority in accepting private patients--including its own employees--and that state statutes against unfair competition do not apply to county hospitals.

“A county’s policy of accepting paying patients at its public hospital is authorized by the Legislature, does not exceed the county’s . . . powers and does not constitute a gift of public funds,” said the opinion.

County lawyers said the ruling was a foregone conclusion. They insisted the Community Memorial suit has been without merit from the beginning and has squandered up to $1.3 million in taxpayers’ money. “In the view of the court of appeal and the trial court this was a slam-dunk in our favor,” Assistant County Counsel Noel Klebaum said. “We always said that this was a waste of money. . . . And my guesstimate is that CMH spent twice as much on this lawsuit as the county did.”

But Community Memorial attorney John McDermott said the fight is hardly over. He said he will petition the California Supreme Court for a hearing. And if that appeal is unsuccessful, he said, the private hospital will sue the county again to force the court to address issues that were not decided in Tuesday’s ruling.

“How could we not?” McDermott said. “This is a question of survival. There is not enough patient revenue to support both hospitals.”

McDermott maintained that the court of appeal grossly erred in upholding a July 1995 Superior Court ruling. If the court is going to allow government to compete, he said, it must also force it to abide by laws applied to private industry.

For example, the county hospital can hire its own doctors, while private hospitals cannot. “When the county goes into business for itself with taxpayer dollars, it’s not only a matter of wasting taxpayer dollars it’s unfair competition,” McDermott said.

Community Memorial sued Ventura County two years ago, claiming that the nearby public hospital was luring patients away from private hospitals and illegally stretching its role beyond that as health provider of last resort for poor patients.

The private hospital found particularly troublesome Ventura County Medical Center’s plan to allow 6,000 county employees to be treated at the county’s system of health clinics and the county hospital, which is located only two blocks from Community Memorial in central Ventura.

Community Memorial also alleged that the county was violating state and federal laws by “deflecting” indigent patients to private hospitals, refusing to accept poor patients transferring from private hospitals and by giving county employees preferred treatment over uninsured indigent patients.

But in an opinion by Justices Arthur Gilbert, Kenneth R. Yegan and Paul Coffee, the appellate court ruled that Ventura County was acting fully within the law.

“This is very important, because it means the county will be able to serve patients and operate its health care system in the same fine way it has for many years,” Klebaum said. “ And that’s what CMH was essentially trying to prevent.”