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Read Making a Killing

home / healthcare / in the media

Los Angeles Business Journal
Feb 23, 2004

by Laurence Darmiento

Tenet sale may lead to mandate of incentives for buyers

First there were enterprise zones. Now, if the hospital industry has its way, there will be "health care enterprise zones."

The fear that some of the 19 hospitals Tenet Healthcare Corp. has up for sale statewide may be undesirable has prompted the Healthcare Association of Southern California to develop a proposal that it claims would make it easier for all financially shaky hospitals to stay open.

The proposal, which will be formally introduced next week at the Los Angeles County Emergency Medical Services Commission meeting, is still being fleshed out but essentially calls for a variety of financial and paperwork breaks for hospitals in medically under-served areas with high numbers of uninsured residents.

"We have to look at developing new carrots to retain and build hospital capacity in areas where hospitals are threatened by closures," said Jim Lott, executive vice president of the association.

Besides relatively straightforward proposals, such as expediting the paperwork that hospitals must process through the state, there are more costly recommendations that include exempting hospitals from any reductions in Medi-Cal payments--or even requiring state-licensed private health plans to give such hospitals some level of higher reimbursement.

Bobby Pena, a spokesman for the California Association of Health Plans, an insurer trade group, said association officials were unaware of the proposal, and he could not comment.

The proposal would need to be incorporated into a Legislative bill and has not yet found a home. Health care reformer Jerry Flanagan said the idea is up for discussion as part of a wider bill he is working on with state Sen. Gloria Romero, D-Los Angeles, in response to the Tenet sales.

"The likely people who will take over these hospitals are non-profits. I am interested in what is the biggest obstacle in keeping them open," said Flanagan, of the Foundation for Taxpayer & Consumer Rights.

Rosie Escobar, chief health deputy to Romero, who is chair of the Senate's Subcommittee on Emergency Medical Services, said the bill has yet to take shape but confirmed Flanagan is among those developing ideas for it.
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Staff reporter Laurence Darmiento can be reached at 323-549-5225 ext. 237 or
at ldarmiento@labusinessjournal.com


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