USC filed suit Tuesday in an effort to force Tenet Healthcare Corp. to sell its ownership and control of USC University Hospital, contending that the troubled hospital operator had not adequately invested to improve the facility.
The 269-bed hospital near downtown Los Angeles is staffed by USC medical personnel and is also used as a teaching facility. The university owns the land and Dallas-based Tenet manages the hospital and owns the buildings and equipment.
For The Record
Los Angeles Times Thursday August 24, 2006 Home Edition Main News Part A Page 2 National Desk 1 inches; 57 words Type of Material: Correction
USC University Hospital: An article in Wednesday's Business section about a USC lawsuit to force Tenet Healthcare Corp. to sell its ownership and control of USC University Hospital said The Times reported that the hospital's liver transplant program had the nation's highest death rate. The Times reported that the program had one of the highest death rates.
Some of the hospital's programs, including gynecology, neurology and neurosurgery, ophthalmology and orthopedics, rank among the top 50 in the nation, according to U.S. News & World Report magazine's annual hospital survey. But The Times recently reported that the hospital's liver transplant program had the nation's highest death rate.
Marshall B. Grossman, the attorney representing USC, said Tenet's investment in the hospital since 2003 was about $100 million short of what was agreed upon.
The lawsuit, filed in Los Angeles Superior Court, does not take issue with Tenet's management of the Boyle Heights hospital but with the company's ability to continue investing to improve the facility.
"Tenet simply cannot or will not offer the necessary support at a level appropriate and befitting a top-tier, teaching hospital of USC's quality," Grossman said.
Tenet spokesman Steven Campanini disputed that, saying the company had made "substantial investments," including a new $150-million patient building scheduled to open in coming months.
Tenet officials called the lawsuit a negotiation tactic.
"There has been ample opportunity for USC leadership to indicate their concerns to Tenet leadership, and they chose not to do so," Campanini said. "They chose to do it this way, and it's unfortunate."
The lawsuit is the latest in a string of financial and legal troubles for Tenet, the nation's second-largest hospital operator with 68 facilities, including 19 in California. The company has lost more than $3 billion in the last three years and has been embroiled in disputes over illegal kickbacks and overcharges.
In May, Tenet agreed to pay $21 million to the federal government to settle charges that its administrators at Alvarado Hospital Medical Center in San Diego paid illegal kickbacks to doctors to boost hospital admissions. Tenet admitted no wrongdoing but agreed to sell or close the hospital. It is currently looking for buyers.
