Prime Healthcare Buys Alvarado Hospital In San Diego–One More Cadillac ER Room On the Way
Posted Nov 18 2010 12:49am
The first task of of business is to upgrade the ER at Alvarado Hospital. In Orange County where I live in California, you can roll bowling balls through the once busy parking lots as the company does not normally sign contracts with insurers and charges their customary rates. Just as the rest of the hospitals operated by Prime, the hospital was not in good shape financially. They used to receive 130% of Medicare compensation for taking care of prisoners but that rate has dropped with the recent economic conditions. In the Los Angeles/Orange County area approximately 50% of the hospitals are operating in the red.
The hospital is in a highly competitive area with Scripps and Sharp Healthcare. The hospital had layoffs earlier this year and now with operating for bigger profit areas in the ER, maybe there could be more, that’s what happened here at least in Orange County. Prime is in and out of the news here and recently they have been under investigation for a perceived high amount of infection rates and in the past Prime has battled balance due billing with Kaiser, Tenet and a few others. BD
The parent company of Alvarado Hospital in San Diego was sold Wednesday to Prime Healthcare Services, an Ontario-based company known for buying up financially distressed hospitals and using aggressive cost-cutting and billing practices to try to turn them around.
The private company, established in 2001, owns 13 other hospitals in California, including Paradise Valley Hospital in National City. It bought Paradise Valley for $30 million in 2007 from Advent Health as the hospital faced imminent bankruptcy.
The company often cancels contracts with HMOs when it takes over a hospital and renegotiates the deals so fees for patient services are higher. Insurers who refuse the more costly contracts may pay even higher rates if a policyholder goes to a Prime Healthcare emergency room anyway.
Meanwhile, Prime bulks up the emergency room in order to boost patient volumes. That’s particularly important with patients covered by insurers that refuse to sign contracts with Prime.