Whatever the outcome of the criminal case involving Alvarado Hospital Medical Center, its parent company and its former CEO, the San Diego hospital should not be closed.
Federal regulators should continue their civil investigation, begun last week, into some of the hospital's business practices – an investigation that could end up delivering a stinging and perhaps disabling blow by depriving Alvarado of Medicare and Medi-Cal patients. But too many patients rely on this hospital for care, and alternatives in underserved East County are too few, for it to shut down. How to keep it open is as important as how to deal with any wrongdoers.
And there may, or may not, be wrongdoers. Alvarado's parent company, Tenet Healthcare Corp., is under federal investigation in California and several other states for civil violations that range from bilking federal programs that reimburse hospitals for services to the elderly and the indigent to under-paying taxes. Tenet has settled such cases before, paying hefty fines and civil judgments in suits brought by patients and, in one instance, selling a hospital in Northern California.
Apparently, however, regulators have not offered Tenet the usual option of settling the case, making requisite changes at Alvarado and staying in business there. Do they intend, then, to force the closure or the sale of Alvarado? And are they doing so in whole or in part because the criminal charges haven't yet stuck?
This civil action comes right on the heels of the U.S. attorney's second failure to persuade jurors that Tenet and Alvarado stretched relocation agreements, widely used to help doctors move to underserved areas, into illegal bribes and kickbacks for patient referrals.
Nevertheless, and despite quality-of-care reasons at Alvarado, the basis for the civil charges is reportedly the unproven criminal allegations. That, too, is unusual, and worrisome. It's worrisome if regulators are picking on only for-profit hospitals they suspect of criminal wrongdoing. It's as worrisome if regulators are targeting relocation agreements generally, for hospitals may feel compelled to abandon relocation agreements and the underserved patients they are intended to help, rather than mount a costly defense on their merits.
Tenet no doubt will appeal, staying the regulators' denial of government reimbursements for care and keeping Alvarado open a year or so. But it could lose. Tenet and federal officials alike must know that closing the hospital – leaving East County one emergency room – is not an option. Selling it, at some point, is, and for the best of reasons: Closing it would penalize people who clearly don't deserve penalizing: East County residents who need Alvarado's services and had nothing to do with its delivery of them.
