Financial Hardship Plagues 2 Hospitals


Doctors, administrators and community members are debating the uncertain future of the financially troubled Daniel Freeman Hospitals in Inglewood and Marina del Rey.

In addition to a large bond debt, the two affiliated hospitals lost about $23 million since July, officials say. Its owner, the not-for-profit Roman Catholic chain Carondelet Health System of St. Louis, says it may be forced to close the two medical campuses if they are not sold soon.

Hospital administrators are negotiating exclusively with Tenet Healthcare Corp., which bought out nearby Centinela Hospital Medical Center about five years ago and owns 30 hospitals in Southern California. Both sides hope to close the deal later this month and declined to reveal a possible sale price.

Meanwhile, Daniel Freeman's doctors are fighting for the chance to buy and operate the hospitals as nonprofit facilities. Daniel Freeman Memorial Hospital in Inglewood, with 358 licensed beds, opened in 1954 and later annexed the 166-bed Daniel Freeman Marina Hospital campus. Both hospitals, named after the founder of Inglewood, are run by the Sisters of St. Joseph of Carondelet, who plan to keep working there.

The proposed sale has been difficult for the many longtime employees.

"It's a hard time," said Sister Regina Clare Salazar, Daniel Freeman Memorial Hospital vice president for sponsorship and mission. "We don't want to lose the hospital. We'll do anything to keep it open."

The financial troubles are mainly caused, Salazar said, by a shift of the patient population to more and more who are able to pay only little or not at all; Medicare and Medi-Cal payments are not covering costs. Meanwhile, the buildings need seismic repairs and new equipment.

According to state figures, Freeman's Inglewood campus has the busiest emergency room in the area of Inglewood, Hawthorne, Lennox and Marina del Rey.

The hospital checked first with nonprofit health companies but found no interest. Then talks began with the for-profit Tenet.

Three months ago, a group of Freeman-affiliated doctors hired MedSECTOR, a finance and real estate company, to help them buy the hospitals. But there was not enough time to raise all the funds, said Peter Spires, MedSECTOR hospital operations executive.

Because of Centinela's proximity, some Daniel Freeman employees fear Tenet may close Daniel Freeman in Inglewood or make it an extension of Centinela Hospital.

Harry Anderson, a spokesman for Tenet Healthcare Corp., has said the firm will keep Daniel Freeman's charitable, faith-based service alive if the deal goes through.

At a community meeting Thursday, residents and heads of area organizations expressed fears about the future of care for poor people.

"Daniel Freeman has been a friend to the community . . . My heart bleeds for its financial [situation]," said Delia Council, executive director for Inglewood's Coalition for Drug and Violence Prevention. "But the community will bleed if the nature of the hospital cannot be maintained."

For some, Tenet brings back bad memories of the sale of formerly nonprofit Centinela Hospital for about $50 million. Centinela administrators tried giving those funds to an out-of-area charitable organization, but residents successfully fought to get the funds for local health programs.

Jeffrey Bogosian, a Daniel Freeman orthopedic surgeon who grew up in Inglewood and is backing MedSECTOR's possible bid, said the majority of the doctors, nurses and patients are against Tenet's "hostile takeover."

Daniel Freeman interim CEO Cathy Fickes maintained that it was either sell or close, and Tenet was the only offer on the table. If Tenet negotiations fail, hospital administrators say they would consider other formal bids, including a possible one from the doctors group.

"As far as patient care, we've not been able to put capital money in the hospital for the last three years," said Fickes. "How do we continue to provide services when we are losing all this money?"

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