How one lawsuit is taking on a California non-profit hospital system for conduct that is rampant throughout the industry:
Late one night, Kara Johnson went into labor weeks earlier than expected, but when she arrived at the familiar doors of her community hospital, she found them locked. The labor and delivery unit had been quietly shuttered, forcing her to drive an extra 30 minutes in excruciating pain, praying she’d make it to the next nearest hospital in time. This may be a fictional account, but there are more Karas out there than you could imagine.
Across the country, urban and safety-net hospitals, long considered the backbone of healthcare for millions of Americans, are being quietly gutted. Profitable health systems are diverting resources to more lucrative suburban hospitals, leaving behind a trail of shuttered wards and neglected communities. What’s happening in cities like Philadelphia, New York, and Los Angeles is part of a broader, troubling trend: the systematic pilfering of essential urban healthcare services to cater to the more lucrative commercially insured patients of the suburbs. This article is going to highlight one example involving Community Hospitals of Central California, part of the Community Health System (CHS). I hope this example forces us to answer urgent questions about the priorities of healthcare systems and the future of equitable access to care in America.
Background:
Community Hospitals of Central California, now known as Community Health System (CHS), had a long history of serving the Central Valley, with a mission focused on providing healthcare to all, regardless of income or insurance status. Over the years, CHS has expanded into a major healthcare network, with hospitals and clinics spread across the region. Its promise has always been to prioritize community care, particularly for those who are most in need.
Fresno Community Regional Medical Center (Fresno CRMC) part of CHS, was a crucial safety-net hospital serving low-income, Black, and Latino communities in Fresno. As the area’s only Level I trauma center, it handled the most severe emergencies, providing critical care to those who often have nowhere else to turn. Fresno CRMC was also more than just an emergency hospital; it was a vital provider of everyday healthcare for many residents who might otherwise go without medical attention.
Meanwhile, Clovis Community Medical Center (Clovis CMC) is located in the affluent suburb of Clovis. The newly developed hospital caters to a predominantly commercially insured, middle- to upper-income population. Unlike Fresno CRMC, which serves a diverse and economically disadvantaged community, Clovis CMC meets the needs of a wealthier, largely white demographic. The shift in CHS’s focus from serving vulnerable populations in Fresno to prioritizing the suburban, insured residents of Clovis raised serious concerns among a number of groups, including the plaintiffs in a recently filed lawsuit by Cultiva La Salud, a nonprofit community benefit organization, and Fresno Building Healthy Communities, a nonprofit community benefit organization.
The Complaint:
The plaintiffs accuse CHS of systematically misappropriating federal and state funds intended for the care of low-income and medically underserved populations, particularly through the Medi-Cal program. They claim that instead of directing these funds to Fresno CRMC—CHS diverted these resources to Clovis CMC in a more affluent, predominantly white, and commercially insured area. This alleged misallocation of funds allegedly severely compromised Fresno CRMC's ability to provide essential healthcare services to its community, as the hospital struggles with underfunding, staff shortages, and reduced capacity.
The plaintiffs argue that CHS's actions violate the terms of Medi-Cal funding, which is specifically earmarked for vulnerable populations, and have resulted in a significant weakening of the healthcare safety net in Fresno. This mismanagement, they assert, has not only jeopardized patient care at CRMC but also represents a broader misuse of public healthcare dollars meant to support equitable access to medical services.
In addition to the financial allegations, the plaintiffs also accuse CHS of engaging in discriminatory practices that disproportionately harm Fresno's Black, Latino, and low-income residents. By prioritizing the development and expansion of Clovis CMC at the expense of Fresno CRMC, CHS is alleged to have created a two-tiered healthcare system, where access to high-quality care is increasingly reserved for those in more affluent, predominantly white communities. The plaintiffs argue that this strategy exacerbates existing healthcare disparities, effectively denying equal access to care based on race, ethnicity, and socioeconomic status. This, they contend, constitutes a violation of California’s civil rights laws, including the Civil Rights Act, which prohibits discrimination based on race, ethnicity, and other protected characteristics, as well as Government Code Section 11135, which extends these protections to entities receiving state funding. The complaint asserts that by undermining CRMC’s capacity to serve its diverse patient base, CHS is not only perpetuating systemic inequities but also contravening the legal requirements to provide non-discriminatory access to healthcare services.
Conditions in Fresno CRMC
The complaint alleges a shocking neglect of Fresno CRMC, where the lack of investment has led to conditions that are far below acceptable standards for a hospital of its size and importance. The complaint states, “Fresno CRMC’s emergency department is routinely overwhelmed, with patients often waiting more than 12 hours to be seen by a doctor.” The hospital’s facilities are described as “outdated and in disrepair,” with critical equipment such as MRI machines frequently out of service. The complaint also notes that “Fresno CRMC lacks the basic resources to provide adequate care, including essential medical supplies and staffing, forcing the hospital to operate in a constant state of crisis.”
The complaint provides harrowing examples of how these conditions have directly harmed patients. One particularly egregious case involves a woman who came to Fresno CRMC in labor, only to be turned away due to the hospital’s inability to accommodate her. She was forced to give birth in the emergency room lobby, resulting in complications that could have been avoided if proper care had been available. The complaint includes testimony from another patient who described the experience as “dehumanizing,” saying, “I waited over 24 hours for a bed, all while in severe pain. By the time I was seen, my condition had worsened significantly.” These personal accounts highlight the dire consequences of the hospital’s neglect.
The complaint argues that these substandard conditions have led to markedly worse health outcomes for Fresno CRMC’s patient population, many of whom are already at a disadvantage due to poverty and systemic inequalities. According to the complaint, “The mortality rate for preventable conditions at Fresno CRMC is significantly higher than the national average, a direct result of the inadequate care provided.” The complaint further asserts that the lack of investment and resources has led to “an increase in adverse health outcomes, including higher rates of infection, complications, and preventable deaths.” This has disproportionately affected Fresno’s low-income, Black, and Latino communities, exacerbating existing health disparities.
As the case against CHS unfolds, the outcome remains uncertain, but its implications could (should, I hope) reverberate far beyond Fresno. It might even be the first of many that challenge how healthcare systems allocate resources, especially in vulnerable communities. There is no shortage of this type of behavior across the country:
Hahnemann University Hospital, Philadelphia, Pennsylvania: a safety-net hospital serving a large portion of low-income and uninsured patients in Philadelphia. The hospital was purchased by a private equity firm in 2018, which later declared bankruptcy and shut it down in 2019. Critics argue that the closure was motivated by the owners' desire to profit from the hospital’s valuable real estate, rather than invest in the hospital’s operations to serve the community. The closure of Hahnemann has been seen as a significant loss for urban healthcare, particularly for the underserved population it once served.
St. Vincent’s Hospital, Manhattan, New York: a historic hospital in Greenwich Village, Manhattan, that provided critical care, including to a large population of lower-income residents and those with chronic illnesses such as HIV/AIDS. After years of financial struggles, it closed in 2010. Developers converted the hospital into luxury condominiums, a move that highlighted the tension between the need for healthcare services and the profitability of real estate in urban areas. The closure of St. Vincent's left a significant gap in healthcare services for the surrounding community.
Martin Luther King Jr. Community Hospital, Los Angeles, California: served a predominantly low-income, African American, and Latino community. After years of financial and operational challenges, including instances of patient neglect, the county closed the hospital in 2007. The facility was reopened as Martin Luther King Jr. Community Hospital in 2015, but its capacity and services were greatly reduced. Meanwhile, there was notable investment in suburban hospital facilities that catered to more affluent, commercially insured patients, raising concerns about resource allocation.
Charleston Area Medical Center (CAMC), Charleston, West Virginia: faced criticism for its decision to close some urban hospitals and services while expanding into more affluent suburban areas. This has included reducing services in areas with higher proportions of uninsured or Medicaid patients while investing in facilities that cater to patients with private insurance. The shift in resources has been seen as prioritizing profit over providing care to the most vulnerable populations.
University of Pittsburgh Medical Center (UPMC), Pittsburgh, Pennsylvania: has been accused of redirecting resources from safety-net hospitals serving urban, low-income populations to build and expand in suburban areas where patients are more likely to have private insurance. Critics argue that this strategy undermines the mission of serving the broader community, especially those who rely on safety-net hospitals for essential care.
Montefiore Medical Center, Bronx, New York: has faced criticism for its expansion into wealthier suburban areas while closing or downsizing services in its Bronx hospitals, which serve a largely low-income, minority population. The decision to shift resources has raised concerns about access to care for vulnerable populations, particularly in an area already facing significant health disparities.
These examples illustrate a broader pattern where financially motivated decisions can lead to the erosion of healthcare services in urban areas, particularly those serving vulnerable populations.
Call to Action:
It's time for our policy leaders to step up and address the systemic failures that have allowed hospitals to operate with impunity in our communities. It should not require litigation to hold these institutions accountable for their responsibility to spend federal and state dollars wisely or to serve as the final bastion of community care. Hospitals are central to our healthcare system and consume nearly a third of our national healthcare spending, with a significant portion funded by taxpayers. Yet, they remain largely unaccountable to the public they claim to serve.
Our leaders in Washington, D.C., and state capitals across the country have been conspicuously absent in confronting this issue. The time has come to demand transparency, accountability, and a commitment to the communities that hospitals are supposed to protect and heal. As taxpayers and citizens, we should no longer accept hospitals merely posturing as good public citizens; they must be held to a standard that reflects their role as essential pillars of our healthcare system.
If we fail to act, hospitals will continue to prioritize their bottom lines over the health and well-being of the communities they serve. It is not just a matter of equity but a moral imperative. Our policymakers must ensure that hospitals fulfill their obligations, not just to accreditation bodies and payers, but to every individual who relies on them for care. We need bold leadership to take on these powerful institutions and reform a system that has too long allowed profit to overshadow public good.
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