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Watsonville Community Hospital becomes part of giant, nationwide chain

Posted: Wednesday, Jan 8th, 2014

WATSONVILLE — Community Health Systems Inc., the corporation that owns Watsonville Community Hospital, announced Wednesday that it has acquired Naples, Fla.-based Health Management Associates, Inc.

The merger, which was approved by 98.7 percent of HMA shareholders, creates a network of 206 hospitals in 44 states and makes it the largest hospital chain in the U.S.

“We are pleased that HMA stockholders have seen the significant strategic value in combining with CHS,” CHS Chief Executive Officer Wayne Smith stated in a press release. “We are working now to finalize regulatory approvals, and we expect to complete this transaction quickly so that we can integrate our two companies and deliver on our plans for long-term growth and value creation.”

In a message to potential investors, CHS states, “In over 55 percent of the markets served, CHS-affiliated hospitals are the sole provider of healthcare services.”

Concerned about a monopoly, nurses from around the U.S. went to Naples, where the deal was made official Wednesday morning.

Surgical nurse Tim Thomas expressed concern that the corporation will be able to raise its rates with little concern for its patients, and with little fear of oversight.

“We’re here as a heads-up,” he said. “I don’t know where this is going, but everyone should be watching this.”

According to California Nurses Association spokesman Charles Idelson, most of the corporation’s hospitals are in rural communities where patients have few other options for hospital care. That, he says, makes those communities vulnerable to “price gouging.”

According to a report by the California Nurses Association, all CHS hospitals charge patients 10 times over cost. Watsonville Community Hospital charges its patients 737 percent more than it actually costs to treat them, according to the report.

“It gives them more clout nationally to engage in anti-competitive practices,” Idelson said. “CHS has six of the nine most expensive hospitals in the country. It gives them the ability to run roughshod over small communities like Watsonville.”

Idelson also pointed to a more than two-year U.S. government investigation of Community Health Systems’ Medicare admissions and billing policies. The corporation agreed in October to a $98 million charge to settle the case.

HMA, meanwhile, was the focus of a 2012 exposé on CBS’ 60 Minutes, which reported that it pressured its doctors to admit patients regardless of medical need to increase revenues.

Calls to both companies were not returned as of press time.

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