Prime Healthcare should be denied new hospital licenses until Federal, State investigations into extraordinarily high septicemia, malnutrition rates and risk to patients are complete

OAKLAND, CA — In the wake of a new exposé by California Watch and published in the San Francisco Chronicle, Sacramento Bee, Orange County Register and other media outlets yesterday that revealed extremely high rates of malnutrition among elderly patients at Prime Healthcare Services hospitals in California, healthcare workers are calling on state officials to deny licenses to the hospital operator until state and federal investigations into any risks to patients and the possibility of Medicare fraud are complete.


According to California Watch, “Redding, near Mount Shasta, and Victorville, in the Mojave Desert, have little in common but an unusual statistic: In each city, a [Prime Healthcare-owned] hospital has reported alarming rates of a Third World nutritional disorder among its Medicare patients.” Prime Healthcare, explains California Watch, “… is the target of state and federal investigations for allegedly overbilling the federal Medicare system by millions of dollars in connection with a reported outbreak of septicemia infections.” And furthermore, “As with septicemia, a diagnosis of kwashiorkor on a Medicare patient’s bill can entitle a hospital to a bonus from the government worth thousands of dollars, according to federal records.”
“Caregivers, patients and communities whose lives and livelihoods depend on the delivery of quality healthcare have a right to know what’s behind Prime Healthcare’s unusual infection and malnutrition rates,” said Dave Regan, Trustee at Service Employees International Union-United Healthcare Workers West (SEIU-UHW), the state’s largest union of healthcare workers. “Prime Healthcare should not be granted a single new license to operate hospitals in California until public confidence in the company’s care and Medicare billing practices is restored.”
SEIU-UHW members are backing new legislation introduced by California State Senator Dr. Ed Hernandez, O.D. (D-West Covina), SB 408, which requires hospitals to have a license to operate a hospital. Despite the California Department of Public Health’s assertion that it would not grant new licenses to Prime while federal and state investigations were pending, Prime used a loophole in state law to buy a new hospital in November 2010 without applying for a license. Senate Health Committee Chair Hernandez introduced legislation last week that would close the loophole and prevent unaccountable operators from taking over our community hospitals.
For Prime Healthcare Services, a privately-held, for-profit hospital chain that operates 14 hospitals in California, elevated rates of septicemia, malnutrition and other diseases translate into higher reimbursements from Medicare. Federal investigators are pursuing whether these rates indicate a serious public health risk at Prime’s hospitals or if the company is committing Medicare fraud, reaping potential overpayments of $46 million in 2008-09 alone.
SEIU-UHW’s analysis of 2008 Medicare data for patients at 2,900 hospitals nationwide, “Septicemia at Prime Hospitals,” revealed that Prime’s facilities reported the highest rates of septicemia, a life-threatening blood infection, in the country by a large margin. A second, expanded report analyzed 2009 Medicare data and found that Prime billed the federal government Medicare program for serious medical conditions such as malnutrition at startling rates. The complete analyses are available at www.seiu-uhw.org/prime.
The complication rates for these conditions appear implausible, and if proven inaccurate, likely represent substantial abuse of the Medicare system. Overall, for example:

  • 8 of the 9 hospitals with the highest malnutrition rates in California were operated by Prime.
  • 11 of the 13 Prime hospitals were in the uppermost 4%, nationally.
  • 10 of the 11 hospitals with the highest severe malnutrition rates in California were Prime’s.
  • Prime hospitals treated an astonishing 28% of all related severe malnutrition cases in California in 2009, despite treating fewer than 4% of those inpatients in the same period.

  • Prime’s Severe Malnutrition rate of 7.7% was seven times the national average of 1.1%
  • Several individual hospitals have especially extraordinary rates, for example:

    • The highest malnutrition rate in the U.S. was at Prime’s Huntington Beach Hospital: 36.3%
    • Prime’s Shasta Regional Medical Center in Redding reported 109 cases of Kwashiorkor, a highly-unusual diagnosis in the U.S. or any developed country, in the final quarter of 2009 alone

    According to California Watch‘s reporting, several experts said they were puzzled by of Kwashiorkor among seniors. Kwashiorkor is a form of malnutrition that mainly affects children in impoverished countries and is rare in the U.S.
    SEIU-UHW’s findings have been validated by the investigative reporting team at California Watch, whose experts performed a completely independent analysis, yielding similar results. The extreme malnutrition rates identified by SEIU-UHW were also verified in results prepared by California’s Office of Statewide Health Planning and Development (OSHPD). The union’s methodologies are transparent and publicly available. SEIU-UHW will continue working with healthcare advocates, researchers and regulators who want to repeat and further validate the analysis.
    Alarmed by the analyses provided by SEIU-UHW, U.S. Congress members from California, Pete Stark and Henry Waxman, plus California State Senator Elaine Alquist and Assemblymember Bill Monning, requested investigations into Prime’s practices late last year. Monning is Assembly Health Committees Chair, Alquist the former Senate Health Chair prior to State Senator Hernandez.
    A growing coalition of doctors, patients and other advocates for quality healthcare are working together to expose the impact of Prime’s business practices on patients, caregivers and communities.
    SEIU-UHW represents healthcare workers at four of Prime’s 14 hospitals: Garden Grove, Centinela, Encino and Shasta.

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