AVH ASSAILS LAND TRANSFER FOR HOSPITAL PENDING DECISION CALLED 'UNWARRANTED' GIFT OF FUNDS.

Byline: Karen Maeshiro Staff Writer

PALMDALE - The tit-for-tat over a Palmdale hospital continued Monday as Antelope Valley Hospital officials called the city's pending transfer of property to a Pennsylvania health care chain to build a competing hospital an ``unwarranted'' gift of public funds.

AVH officials also alleged that Universal Health Services' plan does not ensure that the facility will have an emergency room with a doctor on duty at all times, a charge Universal officials denied.

``We cannot let an East Coast-based, for-profit international conglomerate like UHS build and run another hospital that serves only our wealthier residents just to further their bottom-line profits,'' Antelope Valley Hospital CEO Les Wong said in a statement.

Universal, which also owns Lancaster Community Hospital, and Palmdale broke ground June 2 for an $82 million, full-service hospital.

Wong's statement and an accompanying letter to Palmdale's city attorney were a formal response to the city's rejection July 1 of Antelope Valley Hospital's offer to buy the land.

AVH officials have said they fear that a new private hospital will draw off patients with insurance, leaving Antelope Valley Hospital caring for a higher percentage of patients unable to pay for their treatment.

A day before the groundbreaking, AVH officials offered to buy the 30-acre site at 38400 Tierra Subida Avenue for $9.3 million. Palmdale officials rejected it, saying they had no confidence in the hospital district's ability to develop the site, citing ``past incompetence.''

The city characterized Antelope Valley Hospital's actions as an attempt to block competition in violation of anti-trust laws and has denounced the hospital's consideration of using eminent-domain powers to acquire the Palmdale land.

``As currently structured, we believe that the proposed transaction does not meet a public interest and represents an unwarranted gift of public funds,'' Wong wrote in a letter to City Attorney Matt Ditzhazy.

``There are insufficient guarantees to assure that the proposed Palmdale hospital will be operated in such a manner so as to assure the availability of a full range of needed health care services to all segments of the Palmdale community, not just the affluent.''

Mayor Jim Ledford said the city will receive full compensation for the land through property tax revenue.

``We do get a repayment through property tax increment,'' Ledford said. ``I think they are providing assumptions that are somewhat questionable. We are doing a war of words here. We need to get specifics before we make assumptions.''

Ditzhazy said the property transfer is not a gift of public funds.

``The city is getting a $5 million note deed of trust from Universal as part of this transaction. The way they pay for the note is through increases in property taxes that the facility will generate,'' Ditzhazy said.

Ditzhazy said he was surprised by what the letter didn't address: that Palmdale has 25 locations that would be appropriate for a hospital, including Antelope Valley Hospital's own 22 acres on Palmdale Boulevard at 40th Street East.

``What is the big deal about this parcel at this time? Ditzhazy said.

Antelope Valley Hospital said Universal is driven to make profits and thus is not willing to provide a full range of health care services.

Citing 2003 records, Lancaster Community Hospital treated 1 percent of Palmdale's Medi-Cal patients, who make up about 45 percent of the residents under 65 in Palmdale, AVH officials said.

In comparison, the health care district cared for 70 percent of Palmdale's Medi-Cal patients, AVH officials said.

AVH officials also said Lancaster Community has been sued by its emergency room physicians for violating a federal health care law that requires hospitals to treat all emergency room patients, regardless of their ability to pay, and for redirecting ambulances from its emergency room to Antelope Valley Hospital's or other emergency rooms.

Bob Trautman, Lancaster Community's chief executive officer, said that wasn't true, that his hospital treats all patients regardless of payment, and has no power to redirect ambulances from its emergency room.

As for treating Medi-Cal patients, Trautman said LCH does not have a Medi-Cal contract and hasn't had one over the years.

``If we get a patient requiring admission to the hospital, we are required by Medi-Cal to phone a contracted facility for bed availability, which we do. That's the law,'' Trautman said. ``The Medi-Cal requirement is we contact a contracted facility, someone who has a Medi-Cal contract, before we admit to our hospital.''

Trautman said his hospital does not have a contract to cover Medi-Cal patients because ``generally we run at capacity without one. We don't have bed availability for any more than we have.''

And if the Palmdale facility doesn't have a Medi-Cal contract, ``that doesn't mean we will not see Medi-Cal patients in the ER, we will,'' Trautman said.

Contrary to what AVH officials alleged, the Palmdale hospital will have the largest 24-hour emergency department in the Antelope Valley, Trautman said.

``As usual, I think they misrepresent the facts and are taking lots of issues out of context,'' Trautman said.

Antelope Valley Hospital is operated by a government agency, the Antelope Valley Healthcare District, with an elected board of directors.

AVH officials have said they have discussed the possibility of using eminent domain but stressed in the letter that no decision had been made.

``AVHD has made no formal decision to seek to condemn the site via eminent domain and the offer was not intended to serve solely as a pre-condemnation offer. While AVHD must preserve all legal options, its offer to purchase the property for its appraised fair market value was bona fide and clearly represents the district's preferred option,'' Wong said in the letter.

Wong also said in the letter that there appears to be insufficient controls to assure that the proposed property transfer to Universal will be for a ``public use.''

``In essence, the development agreement provides an enormous subsidy to a private for-profit corporation that is free to restrict the health care services that it provides to those health care services that are profitable, and to continue to limit access to even those services through business decisions that will adversely affect the neediest of our population,'' Wong wrote.

Karen Maeshiro, [phone]

karen.maeshiro(at)dailynews.com

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Construction is under way in Palmdale on a new $82 million, full-service hospital. Antelope Valley Hospital officials say the new facility will not serve the community adequately.

Alex Collins/Special to the Daily News