The LA Times article entitled “Hospital group rejects system and cashes in,” written by Daniel Costello on July 8, 2007, is factually inaccurate and erroneous.

The article was written as a one-sided account of the business practices and philosophies of Prime Healthcare Services (PHS) and its Chairman, Prem Reddy, MD. It is regrettable that Costello misrepresented not only the facts, but the spirit with which PHS and Dr. Reddy have practiced medicine over the last 30 years. Furthermore, it is unfortunate that at a time when there are many critical healthcare issues facing the State and the Nation, an article was written and published in the spirit of sensationalism, instead of addressing core concerns of healthcare delivery.

Many quotes from Dr. Reddy were entirely fabricated and others were taken completely out of context, creating a persona for a story, rather than accurately representing a compassionate doctor who has served the small, rural communities of the High Dessert throughout his career. He is a physician who has dedicated his life to medicine and his patients. Dr. Reddy’s long-held belief is that health care is a basic right of every human being and that patient care should be equally provided to all in need, regardless of financial affordability.

Dr. Prem Reddy has worked diligently to create a healthcare model that always places patient care above all else. His efforts to salvage failing hospitals, keep emergency departments open, and turn them into quality, efficient and accessible systems, while still maintaining the highest patient care standards, serve to further improve patient care and benefit the community in these difficult times.

The truth remains that PHS hospitals have received national awards, provided care for populations that would otherwise go unserved, expanded services in communities and donated millions of dollars to charitable causes. Costello’s inclusion of exaggerated stories from biased sources leads us away from these simple, but powerful truths.

PHS Purchases and Salvages Failing Hospitals, Providing a Service to the Communities these Hospitals Serve.

Every hospital PHS purchased was in significant financial difficulty and/or in bankruptcy:

• Desert Valley Hospital (DVH), Victorville, CA, was in financial distress under the management of the now bankrupt publicly traded company, Phycor. PHS purchased the hospital and turned it around operationally, providing the growing and underserved communities of the High Desert the healthcare services they needed.
• Chino Valley Medical Center (CVMC), Chino, CA, was acquired through US Bankruptcy Court before its imminent closure or sale to Kaiser. Following over $15 million of substantial capital infusion and infrastructure upgrades, CVMC prospered to become a premier community hospital in the area. In addition to paying 100 cents on the dollar to the unsecured creditors, the hospital emerged out of bankruptcy within one year
• Sherman Oaks Hospital and the Grossman Burn Center (SOH), Sherman Oaks, CA, was in serious financial trouble and in default on state guaranteed debt when PHS acquired the medical center and turned it around. The world renowned Grossman Burn Center continues to provides tertiary burn care to all patients insured or otherwise.
• Paradise Valley Hospital (PVH), National City, CA, was nearing shut down by Adventist Health because of insurmountable monthly losses rocketing above $2 million. PHS not only purchased the dying hospital, but continues to invest all its resources to continue its mission of serving the underserved and economically under-privileged communities of San Diego’s South Bay region.

PHS’s Emergency Departments are Open Longer and See More Uninsured Patients

PHS places its emphasis on providing efficient and critical emergency care. PHS’ hospitals’ emergency rooms consistently have the least amount of saturation/bypass time (the time the emergency departments are closed because of lack of beds) as compared to other local hospitals which means that more patients are seen. By Federal and State regulations, the emergency departments cannot deny or delay care based on financial ability of the patients.

The truth is that PHS’s emergency departments see more uninsured and indigent patients than other hospitals because their emergency departments are open longer, are more accessible and have decreased waiting times and length of stays. PHS’s hospitals see more patients in their emergency departments, especially uninsured and indigent patients. Therefore, the charity emergency care provided at PHS’s hospitals is substantially higher than the area hospitals, both for-profit and not-for-profit.

As a gateway to the hospitals, PHS believes that its philosophy of keeping the emergency departments open serves the essential needs of patient care access and acts as a safety net to the communities it serves.

Despite exorbitant costs and logistical difficulties, PHS is doing more than its share in keeping these essential services available to the communities. During these challenging times facing the healthcare system, sixty hospitals in the state have closed in the last ten years and more emergency departments have shut their doors, PHS’s goodwill endeavors have been misclassified.

PHS’s Hospitals Provide More Charity Care than Other Non-Profit and For-Profit Hospitals

The charity care statistics from OSHPD provided to the LA Times stated PHS hospitals provide over 3 times the charity care per bed compared to its competitors in San Bernardino County, 6 times compared to its competitors in Orange County and 8 times compared to its competitors in San Fernando Valley. While the amount of charity care is decreasing in the other area for-profit and not-for-profit hospitals, PHS continues to provide substantially more charity care, further underscoring the dedication PHS has to the underprivileged population. Unfortunately, the factual data and PHS’s commitment to charity care was not represented in the article.

Inadequate Reimbursement by Health Insurance Companies/HMO’s is the Significant Cause of Health Care Costs

Healthplans and HMO’s grossly underpay hospitals and physicians while increasing their profit margins. The increased premiums charged by companies such as AETNA, Blue Cross and United Healthcare/PacifiCare earn are not spent on patient care but rather are funneled towards redundant bureaucracy, excessive payments to the healthplan executives, and profits.

Unnecessary Personal Attacks on PHS’ Chairman, Prem Reddy, MD

It is regrettable that Daniel Costello and the LA Times completely misrepresented the 1999 arrest of Dr. Reddy, even though they were repeatedly advised and provided with documentary proof that he was adjudged Factually Innocent of any and all charges. As a matter of law, it is as if the arrest never occurred, and it is journalistically irresponsible to say otherwise. As a publication like the Los Angeles Times should know, obtaining a judgment of factual innocence is not a routine event, but instead only results from a judge’s finding that no reasonable cause exists to believe the arrestee committed the offense for which he was charged. Costello’s statements to the contrary, along with a discussion of Dr. Reddy’s personal household items, are insignificant and irrelevant to the spirit with which he provides healthcare.

PHS is a growing health care organization with over 5000 employees and over 2000 practicing physicians. Its mission has, and will always continue to be to provide comprehensive, quality healthcare in a compassionate, convenient and cost-effective manner.