Prime Healthcare Services

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Prime Healthcare Services
Industry Health care
Founded 2001; 16 years ago (2001)
Ontario, California, U.S.
Headquarters Ontario, California, U.S.
Area served
Northern and Southern California, Kansas, Nevada, Pennsylvania, Rhode Island and Texas
Key people
Prem Reddy, MD, FACC, FCCP
Founder and Chairman
Products Health care services
Subsidiaries (see list)

Prime Healthcare Services is an American private company. It was established in 2001 by Chairman of the Board Prem Reddy. It operates 43 acute care hospitals serving communities in San Bernardino, San Diego, Los Angeles, Inglewood, Orange County and Shasta County in California, Alabama, Florida, Georgia, Indiana, Kansas, Michigan, Missouri, Nevada, New Jersey, Ohio, Pennsylvania, Kansas, Rhode Island and Texas. The hospital network has over 42,000 employees and physicians and more than 7,700 patient beds.[1]


Reddy founded Prime Healthcare Services in 2001 with the purchase of Desert Valley Hospital.[2]

In 2014, Garden City Hospital was sold to Prime Healthcare Services in a deal valued at $76 million. As of that point, Prime Healthcare operated 27 hospitals.[3] The full listing of hospitals and their acquisition year is listed below.

The company's specialty is overhauling distressed hospitals, and it had an “aggressive” expansion plan for 2013. At a new facility, Prime installs medical directors to focus on quality of care, implements staff training programs and then holds facilities to task to raise standards on par with its other hospitals. As a result, once-struggling facilities have now earned a number of quality awards from organizations including the Joint Commission, the American Heart Association and the Leapfrog Group.[4] In 2016, Becker's Hospital Review listed four Prime Healthcare hospitals in a list of 49 hospitals with the lowest rate of serious complications.[5]

“Prime is one of the companies that's very, very good at turning around distressed hospitals,” said Joshua Nemzoff, president of M&A consulting firm Nemzoff & Co. Nemzoff, who was tasked in January 2011 with helping to find a buyer for Landmark, acknowledged that Prime has been the target of what he described as “a bit of a smear campaign by the SEIU,” but said there's no weight to the allegations. “It's a public relations issue, but when you look behind the accusations that have been made, they're completely baseless.”[4] Two additional stories on hospitals acquired and turned around by Prime Healthcare are featured in this article by Modern Healthcare.


Hospital City State Founded Acquired Acquired from
Alvarado Hospital Medical Center San Diego California 2010[6] Plymouth Health
Centinela Hospital Medical Center Inglewood California 1924 2007[7] Centinela Freeman HealthSystem
Chino Valley Medical Center Chino California 1972 2004[8] Veritas Health Services
Dallas Medical Center Farmers Branch Texas 2012[9] Physician Synergy Group
Dallas Regional Medical Center Mesquite Texas 1926 2015[10] Community Health Systems
Desert Valley Hospital Victorville California 1994 2001[11] PhyCor
East Liverpool City Hospital East Liverpool Ohio 1905 2015[12]
Encino Hospital Medical Center Los Angeles California 2008[13] Tenet Healthcare
Garden City Hospital Garden City Michigan 1960 2014[14]
Garden Grove Hospital and Medical Center Garden Grove California 2008[13] Tenet Healthcare
Glendora Community Hospital - formerly East Valley Community Hospital Glendora California 1958 2015
Harlingen Medical Center Harlingen Texas 2002 2011[15] MedCath
Huntington Beach Hospital Huntington Beach California 2006[16] Vanguard Health Systems
Knapp Medical Center Weslaco Texas 2013[17] UniHealth
Landmark Medical Center Woonsocket Rhode Island 2013[18] Landmark Medical Center
Lake Huron Medical Center Port Huron Michigan 1954[19] 2015[19] Trinity Health
La Palma Intercommunity Hospital La Palma California 2006[16] Vanguard Health Systems
Lehigh Regional Medical Center Lehigh Acres Florida 1965[20] 2015[21]
Lower Bucks Hospital Bristol Pennsylvania 2012[22]
Monroe Hospital Bloomington Indiana 2014
Montclair Hospital Medical Center Montclair California 2006[23][24] AHMC Healthcare
North Vista Hospital North Las Vegas Nevada 1959[25] 2015[26] Iasis Healthcare
Pampa Regional Medical Center Pampa Texas 2012[27] Signature Hospital
Paradise Valley Hospital National City California 1904 2006[28] Adventist HealthCare
Providence Medical Center Kansas City Kansas 2013[29] SCL Health System
Rehabilitation Hospital of Rhode Island North Smithfield Rhode Island 2013[18] Landmark Medical Center
Riverview Regional Medical Center Gadsden Alabama 2015 Community Health Systems
Roxborough Memorial Hospital Philadelphia Pennsylvania 2012[30] Solis Healthcare
Saint Clare's Health System New Jersey 2015 Catholic Health Initiatives
Saint John Hospital Leavenworth Kansas 2013[29] SCL Health System
Saint Mary's Regional Medical Center Reno Nevada 1908 2012[31] Dignity Health
Saint Michael's Medical Center New Jersey Newark New Jersey 2015[32] Trinity Health
San Dimas Community Hospital San Dimas California 2008[13] Tenet Healthcare
Shasta Regional Medical Center Redding California 2008[33] Hospital Partners of America
Sherman Oaks Hospital Los Angeles California 1969 2006
Southern Regional Medical Center Riverdale Georgia 1971[34] 2015
St. Joseph Medical Center Kansas City Missouri 1874[35] 2015[35] Ascension Health
St. Mary's General Hospital Passaic New Jersey 2014[36]
St. Mary's Medical Center Blue Springs Missouri 2015[37] Ascension Health
St. Michael's Medical Center Newark New Jersey 1867[38] 2016[39] Trinity Health
Suburban Community Hospital East Norriton Pennsylvania 1944[40] 2016[40] Trinity Health
West Anaheim Medical Center Anaheim California 2006[16] Vanguard Health Systems

Awards and recognition[edit]

Prime Healthcare has achieved national recognition by having more 2016 Healthgrades Patient Safety Excellence Award recipients than any other health system in the country. Twenty Prime Healthcare hospitals achieved this honor, including all 15 California hospitals.[41] The distinction places the Prime Healthcare hospitals among the top 10% of hospitals in the nation for excellent performance as evaluated by Healthgrades, the leading online resource for comprehensive information about physicians and hospitals. Hospitals were evaluated based on the occurrence of observed incidents and expected performance for 14 Patient Safety Indicators as defined by the Agency for Healthcare Research and Quality. This Healthgrades designation recognizes superior performance in hospitals that have prevented the occurrence of serious, potentially avoidable complications for patients during hospital stays.

In 2013, Prime Healthcare Services was named as one of the "Top 15 Health Systems" in the country by Truven Health Analytics, formerly Thomson Reuters. Prime Healthcare Services was also named top 15 in 2012. In total, the system has been named as a top system three times in five years. PHS was also recognized as a Top 10 Health System in 2009 by Thomson Reuters in its first-ever landmark study of health systems, the only West Coast health system to receive this recognition.[42]

A number of its hospitals have been consistently named in Thomson Reuters’ Top 100 Hospital rankings as well as U.S. News & World Report’s Best Regional Hospitals in Los Angeles. Its hospitals were also recognized in the top 18% as Top Performers in the Nation on Key Quality Measures by the Joint Commission.

More recently,[when?] eight of Prime Healthcare Services' hospitals were named among the "100 Top Hospitals" in the nation by Thomson Reuters.[43] Five of the nine California community hospitals that earned this distinction were Prime Healthcare hospitals.


Department of Justice Investigation[edit]

United States Department of Justice has started a criminal civil investigation for Medicare Fraud by Prime Health Care and its chief executive.Criminal Investigation

Profits and cost-cutting[edit]

In 2007, the Los Angeles Times ran a news story that alleged that the policies of Prime HealthCare Services, Inc. resulted in higher than average profits at the possible cost of patient care. According to the Times story, "When Reddy's company, Prime Healthcare Services Inc., takes over a hospital, it typically cancels insurance contracts, allowing the hospital to collect steeply higher reimbursements. It has suspended services — such as chemotherapy treatments, mental health care and birthing centers — that patients need but aren't lucrative.... On four occasions since 2002, inspectors have found that Prime Healthcare facilities failed to meet minimum federal safety standards, placing their Medicare funding at risk.”[44]

Septicemia and malnutrition[edit]

Prime Healthcare is under investigation by the United States Department of Health and Human Services and the California Department of Justice about concerns over a reported spike in septicemia. The investigation centers around whether the spike in septicemia represents a large public health issue or multimillion-dollar Medicare fraud. Six Prime hospitals ranked in the 99th percentile of U.S. hospitals for septicemia and five were in the 95th percentile.[45]

There are also claims that Prime Healthcare Service engages in upcoding elderly patients to malnutrition. In Mount Shasta, Victorville and the Mojave Desert, Prime has had high rates of kwashiorkor among its elderly patients. At Shasta Regional Medical Center, Prime reported 16.1% of their Medicare patients suffered from kwashiorkor, while California’s average for Medicare patients is 0.2%.[46]

Medicare allowances[edit]

Prime also has come under scrutiny by investigators over expenses on luxury items disallowed by Medicare. Authorities have flagged $491,000 in operating costs in relation to a Eurocopter for the former Chief Executive Officer, Lex Reddy, brother-in-law of Prem Reddy. The Department of Health Care Services also identified and disallowed $820,000 for the lease and taxes on a home in Beverly Hills and $303,000 in depreciation on the helicopter and a Bentley. The funds flagged by auditors do not represent tax dollars that have been sent to Prime. Rather, they signify sums that the state will not recognize when compensating the chain for its corporate office expenses.[46]

Prime is currently[when?] being sued by Kaiser Permanente for "trapping patients" and then sending their insurance companies highly inflated bills.[47]

Emergency rooms[edit]

In a similar manner,[clarification needed] Prime Healthcare has been accused of transferring high numbers of patients from its emergency room to its hospital beds, specifically with patients on Medicare. Some families describe being trapped by doctors at Prime facilities and were unable to see their own doctor at another facility. Former Prime employees have described an orchestrated campaign of admitting Medicare and Kaiser patients – moving them from the emergency room to a hospital bed – in the interest of changing the fortune of a money-losing hospital.[48]

In September 2011, California Attorney General Kamala Harris rejected the approval for the sale of the Victor Valley Global Medical Center in Victorville, California, stating that the sale would not be in the public interest.[49]

Privacy disclosures[edit]

In 2012, two executives at Prime Healthcare Services disclosed a patient's chart to multiple media outlets without the patient's express written consent. The release was in response to a California Watch article on Prime Healthcare Services billing practices at Shasta Regional Medical Center, which included claims by a Darlene Courtois about her treatment by Shasta. In this incident, Randall Hempling, the hospital CEO, and Dr. Marcia McCampbell, its chief medical officer, showed up at the offices of the Redding Record Searchlight and successfully convinced the paper's editor not to publish an article echoing the California Watch claims by reference to Courtois' actual medical records.[50]

Response by company[edit]

Prime maintains that their billing practices are legal and proper and claim that the high rate of kwashiorkor is a result of proper diagnosis of malnutrition. They also claim that they are the victim of a campaign by Service Employees International Union (SEIU), but the California Medi-Cal fraud director claims that his bureau had initiated an investigation before SEIU released their findings.[46]

Prime Healthcare hospitals assert that they do not use a diagnosis of malnutrition to increase reimbursement. The relevant (i.e., where the diagnosis affected reimbursement) malnutrition rate at all Prime Healthcare hospitals was 3.6%, which is much less than the rates referenced in the article. For example, the relevant malnutrition rate at Huntington Beach Hospital was 5.3% rather than the 39% reported by California Watch.

Prime asserts that the higher-than-average malnutrition rates at Prime Healthcare hospitals are the result of Prime Healthcare's commitment to providing high quality health care for all of its patients, for which Prime Healthcare insists they should be applauded rather than criticized.[neutrality is disputed] Published studies estimate that up to 15% of ambulatory elderly patients, up to 44% of homebound elderly patients, up to 65% of hospitalized elderly patients, and up to 85% of nursing home patients are malnourished.[51][52] Given these statistics and the morbidity and mortality rates associated with undetected and untreated malnutrition, Prime Healthcare hospitals have implemented a nutritional screening program in order to improve patient care outcomes and decrease mortality and morbidity. This program includes policies and procedures designed to ensure that each elderly patient admitted to the hospital receives a nutritional screening.


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External links[edit]