O.C. hospital exec quits after probe

IHHI's four Orange County hospitals account for more than 12% of the county's hospital beds and a quarter of its emergency-room visits. The largest is the 282-bed Western Medical Center-Santa Ana, one of the county's oldest hospitals and one of its only three trauma centers. Western Med is also the linchpin of medical care for many of the county's neediest residents -- "a critical part of its safety net," in the words of a longtime expert on healthcare in the region.

The other hospitals are Western Medical Center-Anaheim, Coastal Communities Hospital in Santa Ana and Chapman Medical Center in Orange.

IHHI acquired the hospitals in 2005 from Tenet Healthcare Corp., a money-losing Santa Barbara chain that had been accused of letting the hospitals run down. Since then the company has recorded more than $100 million in losses in part because it is saddled with $140.7 million in debt carrying interest rates as high as a stratospheric 24% a year. The hospitals are dependent on Medicare and Medicaid for two-thirds of their operating income, according to IHHI financial statements.

IHHI has also been racked with management dissension. The principal adversaries have been Mogel and Anil V. Shah, a Santa Ana cardiologist who heads the physician investor group.

In a lawsuit set to go to trial in late January, IHHI alleges that Shah blocked attempts led by Mogel to refinance its high-priced credit lines. Shah's goal, the company contended, was to exacerbate IHHI's financial problems to drive Mogel out so he could take over.

In response, Shah contended that Mogel colluded with the company's creditor to keep those high-interest lending facilities in place.

Shah on Friday hailed Mogel's departure. "If the company was to move forward, Bruce Mogel had to go," he said in an interview.

But by some accounts, the real shadow hanging over IHHI is that of Dr. Chaudhuri.

Chaudhuri blamed the clinic shutdowns in 2000 on HMOs that had withheld reimbursements to his medical chain. But lawyers for creditors also accused him of making preferential payments to companies affiliated with himself. Some health plans said they withheld payments because of questions over the quality of care by the clinics.

Chaudhuri was said to be out of the country Friday and unavailable for comment. His longtime attorney and co-investor, William E. Thomas, said he was still "considering" whether to exercise his options for a majority stake in IHHI, which expire in mid-January. In any event, Thomas said, Chaudhuri had no plans to play a management role at IHHI.

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michael.hiltzik@latimes.com