Ven-Mar Neighborhood Association

Daniel Freeman Marina Hospital Closure Thwarted

Court orders resumption of health services

The following is an unauthorized synopsis of a lengthy article in the Los Angeles Times of 8/22/02 entitled “Closures Put Big Hospital Chains Under Microscope” by Times Staff Writer, Don Lee.

A Superior Court judge not only thwarted giant Tenet Healthcare Corporation’s plan to shutter the Daniel Freeman Marina del Rey Hospital this month (August, 2002) but also ordered the company to resume admitting elective patients. Despite this action, very likely, the Santa Barbara-based company still will be able to shut down the hospital fairly soon.

On May 29, 2002, more than a month before consultants completed a report assessing the hospital's market value, hospital officials passed out a memo to the medical staff: The hospital would stop taking new elective admissions the next day, the memo said, and begin the process of closing immediately, with only the emergency room remaining open through August.

By mid-June, the Marina Hospital’s rehabilitation ward had been closed and its buildings and land put up for sale.

The proposed closure of the Marina Hospital was met by extensive protests from Marina del Rey residents, labor unions, consumer groups and politicians in Sacramento and Washington. The California attorney general accused the new owner of breaking promises it made in December when buying the two Daniel Freeman Hospitals. According to its purchase agreement, Tenet promised to develop a "comprehensive planning process", consult with the hospital's governing board, consult community leaders and to get input from the public before deciding to close the Marina Hospital. Tenet agreed to maintain charitable work and to keep the Daniel Freeman Memorial Hospital open for at least five years, but made no such commitment regarding Marina.

The previous owners of the two Daniel Freeman hospitals, the Sisters of St. Joseph of Carondelet, sold the hospitals to Tenet in December 2001, because of mounting losses, increasing from $5 million in 1998 to more than $38 million in fiscal 2001. Tenet paid $55 million for both hospitals, the 166 bed Marina and the 365 bed Memorial. The site of the Marina Hospital was appraised last year (2001) at $22 million.

Tenet's arrival had an immediate effect on Marina's bottom line. The hospital's first-quarter filing with the State showed a narrowing of operating losses, to $387,000 in the January-to-March period.

Tenet’s consultants reported that the Marina Hospital was not financially tenable, given its limited services, population projections and the surrounding competition. Tenet also was looking at major seismic retrofitting expenses for the 33-year-old wood-frame building, estimated by a state seismic engineer at $2 million to $6 million.

The Los Angeles County Emergency Medical Services Agency has not yet issued a report on the effect of the proposed Marina hospital closure.

Tenet already owns two larger hospitals not far away—Brotman Medical Center in Culver City and Centinela Hospital Medical Center in Inglewood. Critics complained that Tenet did not want a competitor to buy the Marina Hospital. The company denies that.

Since 1995, the company's holdings have grown from about 50 hospitals to 115, including 40 in California, the most of any hospital operator in the state. Tenet's revenue, profit and stock have surged.