Kaiser Health News

After Uphill Battle, Company Is Poised for Takeover of Bankrupt California Hospital

Published

3 weeks ago

April 11, 2024

Melissa Montalvo, The Fresno Bee and Bernard J. Wolfson
Thu, 11 Apr 2024 09:00:00 +0000

MODESTO, Calif. — When American Advanced Management made a bid for the bankrupt Madera Community Hospital last year, many local officials and others involved in trying to reopen the facility didn't take the company seriously.

The 11-year-old firm, based in Modesto, was already running a handful of small, rural hospitals, but Madera had far larger and more prestigious suitors, including Trinity Health and then Adventist Health.

After those two entities had backed out, the bankruptcy judge tentatively greenlighted the AAM proposal. But a nonprofit community group later objected in a court filing, citing concerns about AAM's commitment to fully reopen the hospital and airing allegations of “dishonesty, fraud, perjury, and maladministration.”

The Madera Coalition for Community Justice and other critics of the AAM deal hoped that Adventist and the University of California-San Francisco, which made a last-minute joint proposal in February to take over the hospital, might get another look.

But Gov. Gavin Newsom all but ended the drama on April 8 by announcing the state had approved the AAM plan and would provide a $57 million loan from a fund for distressed hospitals to help reopen and operate the Madera facility.

The same day, AAM, along with the Madera hospital and its creditors, asked the court to strike MCCJ's objection from the record and requested an April 11 hearing for the judge to consider the motion. MCCJ pushed back with its own filing objecting to the request.

The closure of the hospital in January 2023 left Madera County, home to 160,000 people, largely Hispanic agricultural workers, without a general acute care facility. Like many rural hospitals in California and around the country, the Madera hospital had suffered financial and demographic challenges, including a large proportion of patients on low-paying government insurance programs, low patient volumes, and difficulty attracting talent, in addition to pandemic-related pressures.

AAM has committed to pay up to $30 million to creditors and reopen the hospital as soon as late summer. The company has a portfolio of nine hospitals, many of them in underserved regions of California.

“American Advanced Management has a proven track record of reopening closed hospitals in California and saving others from the brink of closure,” said Matthew Beehler, the company's chief strategy officer.

It remains uncertain whether AAM can make the Madera hospital financially viable. Reopening alone will cost millions, and many of the same constraints that led to the bankruptcy remain. In its final two years of operations, the Madera hospital lost $14 million.

Beehler said AAM would aim for “operational efficiency” through centralized administration and “elevate the quality of care” to attract more patients. “These strategic investments and improvements are designed to stabilize the hospital's financial footing and ensure its sustainability in the long term,” he said.

According to a recent study by the Pittsburgh-based Center for Healthcare Quality and Payment Reform, 30% of California's 56 rural hospitals and the same percentage of rural hospitals nationwide are at risk of closing.

“The economics of small hospitals is such that it is unlikely they are going to be highly profitable,” said Harold Miller, the center's CEO.

The group objecting to AAM, along with many members of the community, are particularly worried that the company won't reopen the Madera hospital's labor and delivery department, where over 700 babies were born in 2022.

Labor and delivery at many rural hospitals are among the first services new owners cut because they tend to lose money, said Ge Bai, professor of health policy and management at Johns Hopkins University's Bloomberg School of Public Health.

Beehler said a reopened Madera would provide “many of the ancillary services” related to pregnancy and that AAM would “regularly evaluate” whether it makes financial and clinical sense to have a labor and delivery unit at the hospital.

‘Someone Has to Take a Stand'

AAM is the brainchild of Gurpreet Singh Randhawa, who says he is its sole owner.

Singh, a gastroenterologist-turned-entrepreneur, has amassed hospitals and other health care-related companies, as well as numerous real estate holdings. Public records show dozens of businesses that are or have been associated with Singh.

After graduating from medical school in India in 2000, Singh completed further training in New York and New Jersey before moving to California in 2008. In an interview, Singh said he was inspired to open his first hospital after seeing a friend drive three hours round trip to the Sacramento area every day to visit his father in a long-term acute care hospital because Modesto didn't have one of its own.

Singh said he thought “‘someone has to take a stand,' so I took that stand.” He said he spent $36 million to open Central Valley Specialty Hospital at the site of a shuttered facility in Modesto. It opened in mid-2013, marking the beginning of AAM.

Since then, AAM has acquired numerous hospitals and clinics in Northern California and the Central Valley, including Colusa Medical Center and Glenn Medical Center in 2017, Sonoma Specialty Hospital in 2019, and Coalinga Regional Medical Center in 2020.

In 2023, the firm took over management of the troubled Orchard Hospital in Gridley, California. Last September, AAM announced it had taken over operations of Kentfield Specialty Hospital, with locations in San Francisco and Marin County. It also owns a rehabilitation hospital in Amarillo, Texas.

AAM lost a combined $22.3 million in 2021 and 2022, state data shows. But Beehler said the company returned to profitability in 2023 and expects profit margins in the high single digits this year. He estimated that AAM's total operating revenue will jump to approximately $400 million in 2024 from $290 million in 2023, mainly due to the addition of three hospitals.

The source of the funds to finance the company's growth is not entirely clear. Singh cited family wealth and real estate, but he declined to discuss his family's money. The firm's agreement with the Madera hospital says AAM will have “immediately available funds in cash” to meet its obligations. The $57 million approved by the state this week will be a key source of funding.

Beehler said another source of cash to finance growth is AAM's earnings on longer-term care. Central Valley Specialty Hospital has been profitable since its first full year of operations in 2014, posting cumulative earnings of over $66 million through 2022, according to data from the state's Department of Health Care Access and Information. Coalinga Regional Medical Center has a 99-bed skilled nursing facility in addition to its acute care beds, and Sonoma Specialty Hospital recently added 21 beds, according to Beehler.

Acute vs. Long-Term Care

Critics fear AAM might take the Madera hospital in the direction of long-term care, depriving the community of a viable acute care facility. Cece Gallegos, who recently lost her bid for a seat on the Madera County Board of Supervisors, said in a campaign mailer that the firm would turn Madera into “a glorified nursing home.”

Beehler rebuffed that notion, saying the company couldn't do that even if it wanted to. He said the conditions imposed by the state attorney general “require an acute care hospital with fully functional ER and ancillary services.” The attorney general's conditions, however, require AAM only to make “commercially reasonable efforts” to provide those services.

Singh and his health care businesses have hit plenty of bumps as they've grown.

In 2018, AAM took over management of Sonoma West Medical Center, a publicly owned hospital in the city of Sebastopol that had declared bankruptcy. In 2019, AAM acquired it outright and changed its name to Sonoma Specialty Hospital. Later that year, a bankruptcy trustee sued Singh, AAM, and the hospital for allegedly taking money that belonged to its predecessor, and the parties settled for $1.15 million. Beehler said AAM did not retain any of the money but used it for hospital operations and became “an unintended victim.” The company chose to settle, he said, “to bring finality to this complex issue.”

In 2021, the state fined AAM's Pacific Gardens Medical Center $276,000 for four situations that put patients in “immediate jeopardy,” including one in which inadequate training caused an intravenous dose of fentanyl to drip into a patient nearly seven times as rapidly as the doctor had ordered.

AAM had reopened the hospital in January 2021, about three years after buying it out of bankruptcy. Its license was suspended less than five months later, according to the California Department of Public Health. Beehler said the hospital had reopened as a pandemic surge hospital with support, including the provision of nurses and physicians, from the state's Emergency Medical Services Authority. “By its nature, a surge facility opening is temporary,” he said.

The accelerated timeline for getting it open contributed to the patient-jeopardy situations, he said.

In 2022, the California Department of Health Care Services sued Sonoma Specialty Hospital, Singh, and AAM, accusing them of illegitimately seeking, and accepting, $270,000 from a program that provides federal financing for certain public hospitals.

DHCS said it had told AAM that it wasn't eligible for the money, because it was now a for-profit facility, but that the company refused to pay it back. In February, a Sonoma County judge sided with DHCS. DHCS spokesperson Leah Myers said in an emailed statement that the state does not typically have to sue to recover money. Beehler said AAM “disputes that there is any liability” and is appealing the decision.

Another Singh venture was Advanced College, a private vocational school for health care professionals with three locations in central and Southern California. After receiving numerous complaints, state regulators ordered the school to cease operations in December 2022, alleging it had falsified records and test results, and “failed to provide documentation of sufficient financial resources.”

Joshua Maruca, the school's custodian of records, said Advanced College disagreed with the state's allegations but had already been planning to shut down for other reasons, so it did not contest them.

Bank of the West also sued Singh and several of his businesses for repeated defaults on over $4.7 million in loans, mostly related to the college. The lawsuit was settled, but one of the bank's lawyers, Wayne Terry, said he could not discuss the settlement. Beehler said the loans were not part of AAM's financials. The bank was “paid fully,” he said.

The company's critics say the state didn't sufficiently scrutinize AAM before approving the loan and the operating plan this week.

“The state agencies and the Attorney General, all tasked here with protecting the public interest, have utterly failed to do the basic due diligence that would ensure Madera Community Hospital is resurrected as a viable going concern, under the stewardship of a reliable, trustworthy, and capable operator,” the MCCJ said in the court filing opposing the challenge to its objection.

AAM said in a statement that it was “grateful” to Newsom and the state for approving the deal, and “honored to serve the Madera community.” The bankruptcy court is likely to give its final blessing next week.

——————————
By: Melissa Montalvo, The Fresno Bee and Bernard J. Wolfson
Title: After Uphill Battle, Company Is Poised for Takeover of Bankrupt California Hospital
Sourced From: kffhealthnews.org/news/article/modesto-company-madera-hospital-takeover-newsom-hearing/
Published Date: Thu, 11 Apr 2024 09:00:00 +0000

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Bird Flu Is Bad for Poultry and Dairy Cows. It’s Not a Dire Threat for Most of Us — Yet.

Published

1 hour ago

May 3, 2024

Staff Editor

Amy Maxmen
Fri, 03 May 2024 09:00:00 +0000

Headlines are flying after the Department of Agriculture confirmed that the H5N1 bird flu virus has infected dairy cows around the country. Tests have detected the virus among cattle in nine states, mainly in Texas and New Mexico, and most recently in Colorado, said Nirav Shah, principal deputy director at the Centers for Disease Control and Prevention, at a May 1 event held by the Council on Foreign Relations.

A menagerie of other animals have been infected by H5N1, and at least one person in Texas. But what scientists fear most is if the virus were to spread efficiently from person to person. That hasn't happened and might not. Shah said the CDC considers the H5N1 outbreak “a low risk to the general public at this time.”

Viruses evolve and outbreaks can shift quickly. “As with any major outbreak, this is moving at the speed of a bullet train,” Shah said. “What we'll be talking about is a snapshot of that fast-moving train.” What he means is that what's known about the H5N1 bird flu today will undoubtedly change.

With that in mind, KFF Health News explains what you need to know now.

Q: Who gets the bird flu?

Mainly birds. Over the past few years, however, the H5N1 bird flu virus has increasingly jumped from birds into mammals around the world. The growing list of more than 50 species includes seals, goats, skunks, cats, and wild bush dogs at a zoo in the United Kingdom. At least 24,000 sea lions died in outbreaks of H5N1 bird flu in South America last year.

What makes the current outbreak in cattle unusual is that it's spreading rapidly from cow to cow, whereas the other cases — except for the sea lion infections — appear limited. Researchers know this because genetic sequences of the H5N1 viruses drawn from cattle this year were nearly identical to one another.

The cattle outbreak is also concerning because the country has been caught off guard. Researchers examining the virus's genomes suggest it originally spilled over from birds into cows late last year in Texas, and has since spread among many more cows than have been tested. “Our analyses show this has been circulating in cows for four months or so, under our noses,” said Michael Worobey, an evolutionary biologist at the University of Arizona in Tucson.

Q: Is this the start of the next pandemic?

Not yet. But it's a thought worth considering because a bird flu pandemic would be a nightmare. More than half of people infected by older strains of H5N1 bird flu viruses from 2003 to 2016 died. Even if death rates turn out to be less severe for the H5N1 strain currently circulating in cattle, repercussions could involve loads of sick people and hospitals too overwhelmed to handle other medical emergencies.

Although at least one person has been infected with H5N1 this year, the virus can't lead to a pandemic in its current state. To achieve that horrible status, a pathogen needs to sicken many people on multiple continents. And to do that, the H5N1 virus would need to infect a ton of people. That won't happen through occasional spillovers of the virus from farm animals into people. Rather, the virus must acquire mutations for it to spread from person to person, like the seasonal flu, as a respiratory infection transmitted largely through the air as people cough, sneeze, and breathe. As we learned in the depths of covid-19, airborne viruses are hard to stop.

That hasn't happened yet. However, H5N1 viruses now have plenty of chances to evolve as they replicate within thousands of cows. Like all viruses, they mutate as they replicate, and mutations that improve the virus's survival are passed to the next generation. And because cows are mammals, the viruses could be getting better at thriving within cells that are closer to ours than birds'.

The evolution of a pandemic-ready bird flu virus could be aided by a sort of superpower possessed by many viruses. Namely, they sometimes swap their genes with other strains in a process called reassortment. In a study published in 2009, Worobey and other researchers traced the origin of the H1N1 “swine flu” pandemic to events in which different viruses causing the swine flu, bird flu, and human flu mixed and matched their genes within pigs that they were simultaneously infecting. Pigs need not be involved this time around, Worobey warned.

Q: Will a pandemic start if a person drinks virus-contaminated milk?

Not yet. Cow's milk, as well as powdered milk and infant formula, sold in stores is considered safe because the law requires all milk sold commercially to be pasteurized. That process of heating milk at high temperatures kills bacteria, viruses, and other teeny organisms. Tests have identified fragments of H5N1 viruses in milk from grocery stores but confirm that the virus bits are dead and, therefore, harmless.

Unpasteurized “raw” milk, however, has been shown to contain living H5N1 viruses, which is why the FDA and other health authorities strongly advise people not to drink it. Doing so could cause a person to become seriously ill or worse. But even then, a pandemic is unlikely to be sparked because the virus — in its current form — does not spread efficiently from person to person, as the seasonal flu does.

Q: What should be done?

A lot! Because of a lack of surveillance, the U.S. Department of Agriculture and other agencies have allowed the H5N1 bird flu to spread under the radar in cattle. To get a handle on the situation, the USDA recently ordered all lactating dairy cattle to be tested before farmers move them to other states, and the outcomes of the tests to be reported.

But just as restricting covid tests to international travelers in early 2020 allowed the coronavirus to spread undetected, testing only cows that move across state lines would miss plenty of cases.

Such limited testing won't reveal how the virus is spreading among cattle — information desperately needed so farmers can stop it. A leading hypothesis is that viruses are being transferred from one cow to the next through the machines used to milk them.

To boost testing, Fred Gingrich, executive director of a nonprofit organization for farm veterinarians, the American Association of Bovine Practitioners, said the government should offer funds to cattle farmers who report cases so that they have an incentive to test. Barring that, he said, reporting just adds reputational damage atop financial loss.

“These outbreaks have a significant economic impact,” Gingrich said. “Farmers lose about 20% of their milk production in an outbreak because animals quit eating, produce less milk, and some of that milk is abnormal and then can't be sold.”

The government has made the H5N1 tests free for farmers, Gingrich added, but they haven't budgeted money for veterinarians who must sample the cows, transport samples, and file paperwork. “Tests are the least expensive part,” he said.

If testing on farms remains elusive, evolutionary virologists can still learn a lot by analyzing genomic sequences from H5N1 viruses sampled from cattle. The differences between sequences tell a story about where and when the current outbreak began, the path it travels, and whether the viruses are acquiring mutations that pose a threat to people. Yet this vital research has been hampered by the USDA's slow and incomplete posting of genetic data, Worobey said.

The government should also help poultry farmers prevent H5N1 outbreaks since those kill many birds and pose a constant threat of spillover, said Maurice Pitesky, an avian disease specialist at the University of California-Davis.

Waterfowl like ducks and geese are the usual sources of outbreaks on poultry farms, and researchers can detect their proximity using remote sensing and other technologies. By zeroing in on zones of potential spillover, farmers can target their attention. That can mean routine surveillance to detect early signs of infections in poultry, using water cannons to shoo away migrating flocks, relocating farm animals, or temporarily ushering them into barns. “We should be spending on prevention,” Pitesky said.

Q: OK it's not a pandemic, but what could happen to people who get this year's H5N1 bird flu?

No one really knows. Only one person in Texas has been diagnosed with the disease this year, in April. This person worked closely with dairy cows, and had a mild case with an eye infection. The CDC found out about them because of its surveillance process. Clinics are supposed to alert state health departments when they diagnose farmworkers with the flu, using tests that detect influenza viruses, broadly. State health departments then confirm the test, and if it's positive, they send a person's sample to a CDC laboratory, where it is checked for the H5N1 virus, specifically. “Thus far we have received 23,” Shah said. “All but one of those was negative.”

State health department officials are also monitoring around 150 people, he said, who have spent time around cattle. They're checking in with these farmworkers via phone calls, text messages, or in-person visits to see if they develop symptoms. And if that happens, they'll be tested.

Another way to assess farmworkers would be to check their blood for antibodies against the H5N1 bird flu virus; a positive result would indicate they might have been unknowingly infected. But Shah said health officials are not yet doing this work.

“The fact that we're four months in and haven't done this isn't a good sign,” Worobey said. “I'm not super worried about a pandemic at the moment, but we should start acting like we don't want it to happen.”

——————————
By: Amy Maxmen
Title: Bird Flu Is Bad for Poultry and Dairy Cows. It's Not a Dire Threat for Most of Us — Yet.
Sourced From: kffhealthnews.org/news/article/bird-flu-h5n1-risks-questions-answered/
Published Date: Fri, 03 May 2024 09:00:00 +0000

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Kaiser Health News

KFF Health News’ ‘What the Health?’: Abortion Access Changing Again in Florida and Arizona

Published

16 hours ago

May 2, 2024

Staff Editor

Thu, 02 May 2024 19:30:00 +0000

The Host

Julie Rovner
KFF Health News

@jrovner

Read Julie's stories.

Julie Rovner is chief Washington correspondent and host of KFF Health News' weekly health policy news podcast, “What the Health?” A noted expert on health policy issues, Julie is the author of the critically praised reference book “Health Care Politics and Policy A to Z,” now in its third edition.

The national abortion landscape was shaken again this week as Florida's six-week abortion ban took effect. That leaves North Carolina and Virginia as the lone Southern states where abortion remains widely available. Clinics in those states already were overflowing with patients from across the region.

Meanwhile, in a wide-ranging interview with Time magazine, former President Donald Trump took credit for appointing the Supreme Court justices who overturned Roe v. Wade, but he steadfastly refused to say what he might do on the abortion issue if he is returned to office.

This week's panelists are Julie Rovner of KFF Health News, Sarah Karlin-Smith of the Pink Sheet, Alice Miranda Ollstein of Politico, and Rachana Pradhan of KFF Health News.

Panelists

Sarah Karlin-Smith
Pink Sheet

@SarahKarlin

Read Sarah's stories.

Alice Miranda Ollstein
Politico

@AliceOllstein

Read Alice's stories.

Rachana Pradhan
KFF Health News

@rachanadpradhan

Read Rachana's stories.

Among the takeaways from this week's episode:

Florida's new, six-week abortion ban is a big deal for the entire South, as the state had been an abortion haven for patients as other states cut access to the procedure. Some clinics in North Carolina and southern Virginia are considering expansions to their waiting and recovery rooms to accommodate patients who now must travel there for care. This also means, though, that those traveling patients could make waits even longer for local patients, including many who rely on the clinics for non-abortion services.
Passage of a bill to repeal Arizona's near-total abortion ban nonetheless leaves the state's patients and providers with plenty of uncertainty — including whether the ban will temporarily take effect anyway. Plus, voters in Arizona, as well as those in Florida, will have an opportunity in November to weigh in on whether the procedure should be available in their state.
The FDA's decision that laboratory-developed tests must be subject to the same regulatory scrutiny as medical devices comes as the tests have become more prevalent — and as concerns have grown amid high-profile examples of problems occurring because they evaded federal review. (See: Theranos.) There's a reasonable chance the FDA will be sued over whether it has the authority to make these changes without congressional action.
Also, the Biden administration has quietly decided to shelve a potential ban on menthol cigarettes. The issue raised tensions over its links between health and criminal justice, and it ultimately appears to have run into electoral-year headwinds that prompted the administration to put it aside rather than risk alienating Black voters.
In drug news, the Federal Trade Commission is challenging what it sees as “junk” patents that make it tougher for generics to come to market, and another court ruling delivers bad news for the pharmaceutical industry's fight against Medicare drug negotiations.

Plus, for “extra credit” the panelists suggest health policy stories they read this week that they think you should read, too:

Julie Rovner: ProPublica's “A Doctor at Cigna Said Her Bosses Pressured Her To Review Patients' Cases Too Quickly. Cigna Threatened To Fire Her,” by Patrick Rucker, The Capitol Forum, and David Armstrong, ProPublica.

Alice Miranda Ollstein: The Associated Press' “Dozens of Deaths Reveal Risks of Injecting Sedatives Into People Restrained by Police,” by Ryan J. Foley, Carla K. Johnson, and Shelby Lum.

Sarah Karlin-Smith: The Atlantic's “America's Infectious-Disease Barometer Is Off,” by Katherine J. Wu.

Rachana Pradhan: The Wall Street Journal's “Millions of American Kids Are Caregivers Now: ‘The Hardest Part Is That I'm Only 17,” by Clare Ansberry.

Also mentioned on this week's podcast:

Time's “How Far Trump Would Go,” by Eric Cortellessa.
NPR's “Why Is a 6-Week Abortion Ban Nearly a Total Ban? It's About How We Date a Pregnancy,” by Selena Simmons-Duffin.
NPR's “'Sicko's' Peeno Sees Few Gains in Health Insurance,” by Julie Rovner.
CNN's “Walmart Will Close All of Its Health Care Clinics,” by Nathaniel Meyersohn.

Credits

Francis Ying
Audio producer

Emmarie Huetteman
Editor

To hear all our podcasts, click here.

And subscribe to KFF Health News' “What the Health?” on Spotify, Apple Podcasts, Pocket Casts, or wherever you listen to podcasts.

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Title: KFF Health News' ‘What the Health?': Abortion Access Changing Again in Florida and Arizona
Sourced From: kffhealthnews.org/news/podcast/what-the-health-345-abortion-access-florida-arizona-may-2-2024/
Published Date: Thu, 02 May 2024 19:30:00 +0000

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Kaiser Health News

DIY Gel Manicures May Harm Your Health

Published

21 hours ago

May 2, 2024

Staff Editor

Tarena Lofton
Thu, 02 May 2024 09:00:00 +0000

A fresh set from the comfort of your own home? DIY gel nails have been all the rage on social media, but the practice could cause you to develop a life-changing allergy. In a TikTok video, creator @alina.gene describes developing an acrylate allergy from doing gel nails at home. Now, when exposed to acrylates, the creator feels severe pain.

The creator warns viewers not to self-apply nail polish that requires a UV light to cure. In later videos, @alina.gene explains that at-home use differs from in-salon use because salon professionals have access to higher-quality chemicals that are less likely to cause reactions and that they also have proper training on how to safely apply the products.

“I know I sound real dramatic because an allergy to gel nails or even an allergy to acrylates isn't going to kill you, but the thing is, in the wrong situation it could prevent you from getting lifesaving medical care,” said @alina.gene in another video. Common medical products contain acrylates, and developing this allergy can cause major issues in obtaining future medical care.

We asked an allergist to walk us through this viral video.

If you enjoyed this story from the KFF Health News social team, follow us on Instagram @KFFHealthNews.

✍️: KFF Health News Audience Engagement Team

——————————
By: Tarena Lofton
Title: DIY Gel Manicures May Harm Your Health
Sourced From: kffhealthnews.org/news/article/diy-gel-manicures-health-risks/
Published Date: Thu, 02 May 2024 09:00:00 +0000

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