Operator of Clinics for Poor Sues Ex-FHP Foundation

In another casualty following the breakup of FHP International Corp., an operator of two experimental clinics for the poor has sued FHP’s former foundation, alleging that it reneged on promises to provide $3 million in grants to support the clinics.

Santa Ana-based Health Reform Action Project filed suit Monday in Orange County Superior Court, claiming the foundation’s successor, Archstone Foundation, broke its contract to support the clinics last year.

Joseph Prevratil, Archstone’s chief executive, said he hadn’t yet received the lawsuit and wouldn’t comment. He recently noted that Archstone has switched its focus to funding programs for the aged.

Clinic officials said the foundation launched the project in 1995 as a way both to provide preventive care to the uninsured and reduce costs to society that arise when health problems go untreated. The lawsuit contends that the foundation provided only one-third of the $4.5 million it had promised the program over three years.

It seeks payment of the remaining $3 million and damages.

In an interview, Mary Watson, the project’s executive director, said two clinics in Santa Ana were opened last summer on $1.5 million received from the foundation the year before. One serves a neighborhood that’s largely Latino and Cambodian, the other, a Latino area, and together they’ve seen about 1,000 patients, many of them returning at least once, she said.

A physician oversees the clinics, three nurse practitioners see patients, and two retired physicians pitch in as part-time volunteers. Watson said original plans called for one or two additional clinics to be set up in Santa Ana, but those plans were put on hold when the funding was pulled.

The foundation informed her last summer that it wouldn’t provide the remaining $3 million. Its board told her the program hadn’t made “significant progress” but offered little more explanation, she said.

Watson’s efforts to scare up new funding since then haven’t panned out, she said, at least partly because the clinics haven’t been operating long enough to build up a track record. She said that the foundation grant originally was supposed to run for three years, so the operation could establish a track record for possibly attracting other funding.

Watson said that when she took the job in 1995, she expected that, one day, she might be making the case for more funding in Sacramento or Washington, but “I didn’t think I’d have to fight the people who hired me.”