No New Licenses to Prime Healthcare While Under State, Federal Investigations for Shocking Hospital Infection Rate, SEIU-UHW Asserts

In wake of today’s LA Times and California Watch exposes …
OAKLAND, CA — In the wake of exposes by the Los Angeles Times and California Watch website today revealing off-the-charts infection rates at Prime Healthcare Services hospitals in California, the state’s largest healthcare workers’ union, Service Employees International Union-United Healthcare Workers West (SEIU-UHW), is calling on state officials to stop issuing licenses to the hospital operator until state and federal investigations are complete.

“It would be unconscionable to put more patients at risk, especially the frail elderly susceptible to life-threatening infections like septicemia, by allowing Prime Healthcare to operate more hospitals without a thorough investigation of both its patient care and billing practices,” said Dave Regan, SEIU-UHW trustee. “Prime must be held accountable to the patients, communities and caregivers where it operates hospitals and should not be permitted to expand without full public confidence in the care it provides and is compensated for by taxpayers.”
Prime Healthcare Services, a privately-held, for-profit hospital chain that operates 13 hospitals in California, has the highest rate of septicemia in the country, according to a study of medical claims conducted by SEIU-UHW and reported on by the Los Angeles Times and the website California Watch. SEIU-UHW analyzed medical records for septicemia, a life-threatening blood infection, for Medicare patients for 2008 in over 2,900 hospitals nationwide.
Alarmed by SEIU-UHW’s findings, two U.S. Congressmembers and the Chair of the California Senate Health Committee have requested investigations into Prime’s practices.
The recent investigation requests, one by California Congressmen Pete Stark and Henry Waxman, and the other by California State Senator Elaine Alquist, cite the report’s high septicemia rates for every Prime hospital, all of which operate in California.
Stark and Waxman have asked the Inspector General of the federal Health and Human Services Department to investigate. Alquist has asked the California Department of Public Health to conduct an investigation and withhold approval of any new licenses for Prime until all investigations are complete. Prime is currently seeking a license to operate Victor Valley Community Hospital in Victorville, California.
According to the SEIU-UHW report, available here:

  • Prime’s overall septicemia rate was 15.7%. This figure is more than three times higher than the national average (4.8%), and 70% higher than the second-highest hospital chain (9.2%).
  • Prime operates 5 of the 6 hospitals with the highest septicemia rates in the country. All but one Prime facility fall into the top 5% nationally, and the other falls in the top 10%.
  • Within Prime, Montclair Hospital had the highest septicemia rate, affecting 25% of all Medicare patients. West Anaheim Medical Center (23.0%) and Sherman Oaks (22.5%) also showed extremely high rates.
  • Prime’s practices may have led it to receive $18 million in excess Medicare payments in 2008.

According to the Stark-Waxman letter to Inspector General Daniel Levinson, dated July 1, 2010, the SEIU-UHW report, “potentially demonstrates a pattern of fraudulent billing of the Medicare program and/or extremely high rates of blood infections among Medicare patients treated at Prime operated hospitals.” The Congressmen requested that the Inspector General “examine this report” and upon confirming the data, “commence an investigation.”
Similarly, Alquist, who has authored recent infection-related legislation in California, calls SEIU-UHW’s findings, “deeply concerning” in an August 17, 2010 letter to the California Department of Public Health. She states that a timely investigation by the department is crucial as “Prime is a fast-growing system and continues to pursue new hospitals.”
“Most urgently, I request that your Department investigate Prime and support other state and federal investigations of Prime’s practices,” and, “take all appropriate steps to ensure that whatever is happening at Prime … is not permitted to grow into an even larger problem.”
Finally, Alquist requested that, “Until these investigations are complete … you withhold approval of any additional facility licenses for Prime or Prime-related facilities.”
Prime has made a practice of acquiring financially distressed hospitals and then cutting unprofitable services, such as chemotherapy, mental health and birthing centers. The corporation also has a history of canceling insurance contracts after acquiring hospitals, leading to significantly higher emergency department admissions. This practice often results in higher reimbursement rates from insurance companies, which by law are obligated to cover emergency care.
It is the alarming company-wide pattern of abnormally high septicemia rates among Medicare patients that has motivated the investigation requests.
Two possible explanations for the high septicemia rates are offered by the SEIU-UHW report. One is a system-wide pattern of up-coding, where Prime billed Medicare for more serious conditions than warranted, and received higher reimbursements as a result. The other is that the Prime hospitals suffer from an actual infections crisis. “Either possibility is deeply concerning to us,” Congressmen Stark and Waxman wrote.
SEIU-UHW represents caregivers at four of Prime’s 13 hospitals: Garden Grove, Centinela, Encino and Shasta.


SEIU United Healthcare Workers-West (SEIU-UHW) is the largest healthcare union in the western U.S. with more than 150,000 members. SEIU-UHW is part of the 2.2 million-member Service Employees International Union (SEIU).

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