Tulare Regional Medical Center has been closed since the end of October 2017 due to financial problems. File Photo

published on October 9, 2018 - 3:11 PM
Written by The Business Journal Staff

A report released Tuesday by California State Auditor Elaine M. Howle lays responsibility for the closure of Tulare Regional Medical Center (TRMC) on poor management and the previous board of directors.

The Tulare Local Healthcare District (TLHCD) filed for bankruptcy in September 2017, and voted to suspend the hospital’s license the next month. This decision came after four years of management by Healthcare Conglomerate Associates (HCCA), which was also named in the auditor’s report. The letter outlined that the selection of HCCA went against the advice of the consulting firm engaged to assist the board.

“Our opinion was confirmed that the prior board did not act in the best interests of the district or community,” said Kevin Northcraft, president of the current TLCHD board. “We want to thank the State Auditor and our state representatives, who assisted the board in the current board’s request for audit.”

Howle’s report noted the contract terms that the previous board made with HCCA, which were found to be unfavorable. This includes the $225,000 a month management fee, and provisions to act as the sole employer of personnel at the hospital, which required the lease of employees at a cost of 130 percent of their salaries and wages. Under HCCA, the district’s finances further declined as the management company failed to pay vendors. The medical executive committee was also fired.

“Operating revenue fell under HCCA management, caused in part by the previous board’s removal of the medical executive committee – the body that governs the medical staff,” Howle wrote. “And the subsequent reduction in the number of physicians choosing not to renew their privileges or resigning from the medical center, and an accompanying reduction in patient service revenue.”

The current TLHCD board hopes to have the hospital (now under management by Adventist Health) open by Oct. 15. 

Related stories:

CEO’s brother crucial to hospital takeover, critics say

Under HCCA, Tulare District silenced, shut out of hospital

Critics say under HCCA, Tulare hospital care suffered

HCCA’s alleged plan: Crash Tulare hospital, buy it up

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