Southwest Healthcare: How Could So Much Be So Wrong?

Cheryl Clark, April 21, 2010

It isn't every day that a 218-bed hospital system gets three state fines at once for causing "immediate jeopardy" to its patients, including one penalty for $100,000—the highest assessed so far.

But that's the situation now faced by Southwest Healthcare System in Murrieta, a burgeoning bedroom community 80 miles southeast of Los Angeles.

Moreover, just two days after the three state fines, Southwest's CEO Dennis Knox opened a letter telling him to expect all federal reimbursement to be cut off as of June 1.

The Centers for Medicare and Medicaid Services requested no plan of correction for problems threatening patient safety in nine categories, which means Southwest Healthcare's two hospitals will start losing 40% of the system's $200 million in net patient revenue in 40 days.

The health system had been assigned a federal monitor last year, and was under a consent agreement because of other problems at the hospital dating from 2007. But in the CMS letter April 15, Steven Chickering, head of CMS' western region told Southwest Healthcare that it "continues to be out of compliance."

Two days ago, state health officials informed Southwest that its license was about to be revoked. "We are developing the formal revocation accusation and will present it to the hospital shortly," says the letter from the California Department of Public Health's deputy director Kathleen Billingsley.

These violations "constitute conduct inimical to the public health, morals, welfare and safety of the people of the State of California in the maintenance and operation of the premises or services or which the license is issued," Billingsley said in her Monday letter to Knox.

This is not the kind of thing that would make a CEO's day. Frankly, I got a headache just reading through the problems. The system's two hospitals, Inland Valley Regional Medical Center and Rancho Springs Medical Center, serve a community of about half a million and provide two thirds of the region's acute care beds.

As if matters couldn't be worse, the system is awaiting state approval to open a $53 million expansion, approval that has been delayed because of these safety issues.

The system must be wrestling with the question of how it should respond. Should it fight back? Since taking away the hospital's license could take six to 18 months, Billingsley says, "Their most immediate need would be to have a dialogue with CMS right away," to prevent the loss of Medicare and Medicaid.

CMS' branch chief Rufus Arther's tone of voice indicates that doesn't appear likely. "When we terminate a provider, we don't ask for a plan of correction," he says. "Throughout this process, there's been continued noncompliance. And for us, first and foremost is to protect the safety of the beneficiaries receiving care."

Billingsley was asked Tuesday if she thinks the hospital will try to continue. "That's a question a lot of people are asking," she says. "We're looking at almost three years of noncompliance. (The state) has worked with them on many issues, provided them with feedback and encouragement and let them know the importance of these deficiencies. But they did not meet the standard. This is not our fault."

A spokeswoman from Southwest Healthcare said in an e-mail that she would comment on the accusations and the pending loss of funds and license by early Tuesday afternoon, but had not done so as of today. Calls to the hospital's parent company, for-profit Universal Health Services Inc. of King of Prussia, PA, were not returned.

In the state's most recent accusations last week, Southwest Healthcare was penalized $225,000 for the three deficiencies, two of which included serious problems in its discharges of newborns at risk of jaundice and one for not maintaining humidity levels that would prevent a risk of fire in its surgical obstetric unit, right next to its labor and delivery rooms.

In a news conference about deficiencies at Southwest and six other hospitals last week, deputy public health director Kathleen Billingsley stoically insisted she would not talk about the specifics. But when a question came up about Southwest Healthcare, she seemed to break her cool.

"You will notice there have been situations where there have been inadequate care problems following discharge of newborns. Those are not related to expanded space," she said tersely.

"We believe that citizens of California are entitled to obtain healthcare services from a hospital that meets the minimum level of required state standards and we encourage this hospital to not only correct this, but any system wide issues that will allow us to approve this application."

Not since Martin Luther King Jr -Harbor Hospital has the state said it was shutting a hospital down.

Southwest Healthcare was dinged for serious problems in nine areas–in its governing body, patient's rights, quality assurance/performance improvement, medical staff, nursing services, pharmaceutical services, physical environment, infection control and emergency services, documented in a lengthy report that has not yet been made public.

Facebook icon
LinkedIn icon
Twitter icon