Women’s health advocates are calling it a big victory. The Sisters of St. Joseph, the former sponsors of the two Daniel Freeman hospitals, have agreed to drop their requirement that abortion and other reproductive health services not be offered at the hospitals in perpetuity.
The Sisters made the concession in order to settle a lawsuit brought against them by Attorney General Bill Lockyer in 2003 after the restrictive land covenant banning the services was recorded two years earlier.
The restriction became an issue in 2001 when the Sisters sold Daniel Freeman Memorial and Marina hospitals to Tenet Healthcare Corp., which agreed in its contract to abide by the restrictions, spelled out in the Ethical and Religious Directives for Catholic Health Services.
Women’s health advocates were upset that Tenet, a secular and for-profit company, agreed to follow the ethical directives as part of its purchase. Lockyer took issue with the covenant, which would restrict all future owners of the hospital something that became an issue when Tenet got into financial trouble and sold the hospitals last year.
Under a separate agreement with the Sisters, the new ownership of the hospitals, the Centinela Freeman HealthSystem, will be required to follow the ethical directives for two years, but then may cease doing so after providing the Sisters a six-month notice.
“This is extremely exciting,” said attorney Susan Fogel, a member of the Coalition for Quality Healthcare, a patients’ rights advocacy group. “It’s a tremendous victory for human health and it’s an outstanding precedent.”
Fogel said there are no other instances in California in which for-profit hospitals are under legal obligations to follow the Catholic directives, but she hopes the settlement will push other attorneys general in seeking to abrogate similar restrictions elsewhere in the nation.
G. Michael Finnigan, chairman of the new Centinela Freeman ownership, said he helped broker the deal, including making an offer to require the new ownership to follow the directive, but only for a limited time.
“When we got into this it was a mess. I think this was the middle ground that everyone found acceptable,” he said.
The new ownership is not yet sure what kind of reproductive services may be offered. That issue will be addressed as part of a larger strategic plan currently being developed, Finnigan said.
John Hochhauser, an attorney representing the sisters, declined comment, while Lockyer said in a prepared statement that the settlement will ensure women get a “full range of health services” at the hospitals.
Red Tide
The budget deficit at the county’s Department of Health Services, already projected to hit $340 million in two years, could get a lot worse because of problems at Martin Luther King Jr./Drew Medical Center.
That was the prognosis last week by county health officials as they presented a department fiscal update to the Board of Supervisors.
“I think you described it best in calling it a nightmare,” said Fred Leaf, chief operating officer of the department, in responding to a supervisor’s question.
Federal officials are threatening to withhold $200 million in annual funding from the facility unless administrators and staff can demonstrate they know how to properly handle aggressive mental patients who have been shot with Taser guns in violation of federal regulations.
Such a loss of funding about half the facility’s annual budget wouldn’t necessarily shut down the hospital. However, the loss of funding would have a have a devastating financial effect on the system, likely creating big budget deficits for the department in the fiscal year starting July 1, Leaf said.
Projections released by county health officials indicate that the department should have a year-end balance of $45 million in the 2005-2006 fiscal year, but that will turn into a $341 million shortfall by the next fiscal year even without the loss of federal funding at MLK.
High Flyer
American Pharmaceutical Partners Inc. continues to be a high flyer two weeks after the company received approval from the Food and Drug Administration to market its proprietary cancer drug, Abraxane.
The stock was still trading above $50 a share last week, a big jump from the $38.71 close on Jan. 7, just before the news about the FDA decision was released after the market closed.
While there has been some profit taking since the stock closed at a high of $54.25 on Jan. 13, analysts covering the Schaumburg, Ill. company remain bullish, rating it a buy.
The company, controlled by Dr. Patrick Soon-Shiong, is expected to gross as much as $250 million in sales from the drug in 2006, according to Wedbush Morgan analyst Steven Gergen, who has raised his 12 month price target to $60.
The stock dropped as low as $21.28 in the past 12 months on worries the cancer drug would not get FDA approval.
Here and There
The California Association of Health Plans has lost its chief executive, Steve Tough, who replaced Walter Zellman less than two years ago. The former HMO executive is going to Maximus, a government management, services and consulting firm.
Specialty Laboratories Inc. has completed its departure from Santa Monica and moved into its new headquarters in Valencia. The move was delayed when the clinical reference laboratory company was dinged by state and federal regulators over the qualifications of its clinic personnel.
Staff reporter Laurence Darmiento can be reached at (323) 549-5225, ext. 237, or at
[email protected]
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