Lockyer Says He May Try to Halt Hospital’s Closure

Signaling his intention to scrutinize consolidation of the state’s ailing hospitals, California Atty. Gen. Bill Lockyer told a public meeting Wednesday night in Long Beach that he is willing to intervene to keep a nonprofit hospital there from temporarily closing.

Lockyer repeatedly cautioned that he has made no decision on whether to take legal action to stop the Oct. 2 closure of the 278-bed Long Beach Community Medical Center. But he indicated to the audience of about 90 doctors, union leaders and neighbors of the hospital that he would like to help.

“It’s distressing to see the disruption of service. It would be better if that didn’t happen,” said Lockyer in response to a reporter’s question after the meeting. “What I don’t know is if there’s a legal way to do something about it.”

More than 60% of California’s hospitals are reportedly losing money. Operators blame reduced government and insurance company reimbursements for care, and predict wide-scale closures and consolidations in the next several years.

In one sense, the Long Beach hospital is part of that trend. Its owner, the nonprofit giant Catholic Healthcare West, announced in June that it would close the hospital because of millions of dollars in losses. The chain wanted to consolidate the facility’s operations with those of its St. Mary Medical Center across town. The announcement came less than two years after Catholic Healthcare bought Community with the promise of upgrading it.

The chain’s move provoked fierce and well-organized protests by residents, doctors and unions. Several unions that backed Lockyer’s 1998 election campaign have strongly lobbied him to look at the impending closure.

Responding to the pressure, Catholic Healthcare West executives backtracked and said they would shut down the hospital but keep the license alive so the city of Long Beach could find a new operator. Five groups are now bidding for that role.

In the meantime, however, the hospital is scheduled to close Oct. 2 and remain shut for at least a few weeks while the city selects a bidder.

At Wednesday’s meeting, residents and doctors said that even a temporary shutdown would be devastating to health care in the neighborhood and urged Lockyer to prevent it. The attorney general told the crowd that he would “explore all the options.”

Joyce Hawthorne, a spokeswoman for Catholic Healthcare West, declined to comment on Lockyer’s remarks.

Aides said the attorney general, by wading into the Long Beach controversy, was signaling his intent to scrutinize future hospital closures. He has been conducting an inquiry into Catholic Healthcare West’s decision to shut down the hospital for much of the summer. In another sign of the government’s intentions, Lockyer aides said Wednesday’s hearing was not required by state law but was held at his instigation.

Lockyer, in particular, expressed concern about the extent to which California’s nonprofit hospitals are focusing on the bottom line.

“Nonprofit hospitals, for-profit hospitals operating in California--I can’t tell the difference,” he said.

Lockyer directed assistant Tricia Wynne to meet with “any lawyers in the room” who had ideas about how the state might postpone Community’s closure.

With Wynne taking notes, about nine lawyers, representing the Consumers Union, the California Women’s Law Center, Health Access California and the Service Employees International Union, talked about legal strategies. In particular, they discussed the merits of going to court to seek a temporary restraining order against Catholic Healthcare West. They even discussed specific claims that could be made against the health care giant, including allegations of antitrust violations, breach of contract and breach of fiduciary duty.

Wynne asked for the names of past cases that might be of some use in making a claim. Laurie Sobel, a staff attorney for the Consumers Union, asked Wynne if she would like a brief on the subject.