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Billionaire offers $100-million guaranty to reopen King hospital

The funding from Patrick Soon-Shiong's family foundation would underwrite a University of California effort to resuscitate the medical center near Watts.

October 29, 2009|Molly Hennessy-Fiske

Los Angeles pharmaceutical billionaire Patrick Soon-Shiong announced plans Wednesday to provide University of California regents with a $100-million guaranty underwriting the county's latest proposal to reopen long-troubled Martin Luther King Jr.-Harbor Hospital by 2012.

County officials have expressed misgivings about Soon-Shiong's efforts to reopen the hospital in the past. But he said the funding from his family foundation comes "with no strings attached" and is intended to reassure university officials hesitant to reopen the hospital.

"This could be the county hospital of the future," said Soon-Shiong, 57, a former UCLA surgeon.

Soon-Shiong sent a letter to UC President Mark G. Yudof on Oct. 21 detailing his plan.

"When Martin Luther King Jr. Hospital closed, it left an already underserved community without access to healthcare," Soon-Shiong wrote. "This unjust situation has compelled me to get involved."

Yudof was out of town Wednesday, but staff said his office had received the letter. University officials welcomed the offer, according to a statement from Dr. John Stobo, UC's senior vice president for health sciences and services.

Soon-Shiong said he has been invited to address regents Nov. 19 during their three-day meeting at UCLA, when they are expected to vote on the King proposal. The hospital closed inpatient services two years ago after inadequate care led to medical errors and deaths.

County officials have promised to secure a $100-million letter of credit to guarantee the $63 million a year it will cost them to operate the planned nonprofit 120-bed hospital, according to the county's chief executive, William T Fujioka. Once the letter is obtained, Soon-Shiong's guaranty would underwrite the proposal.

"The county has made a commitment to this community," Soon-Shiong said. "The whole issue is how do we ensure the financial viability of an institution where the patients are largely uninsured."

Some county officials who had expressed reservations about Soon-Shiong's prior attempt to open the hospital declined to comment about his latest offer.

But Supervisors Don Knabe, who chairs the county board, and Mike Antonovich said through spokesmen that they were open to partnering with Soon-Shiong.

Last month, the regents postponed a decision on King, and some urged Supervisor Mark Ridley-Thomas, whose district includes the former hospital, to explore a public-private partnership.

Earlier this week, Ridley-Thomas met with Soon-Shiong to discuss his latest offer with Stobo.

Soon-Shiong ranks 87th among the country's richest, according to Forbes, with an estimated worth of $5.5 billion. He made his fortune investing in biotechnology and developing anti-cancer drugs. He is married to actress Michele Chan, and the couple live on the Westside with their two teenage children.

In the late 1990s, after co-inventing the anti-cancer drug Abraxane, Soon-Shiong founded two biotech companies that he later combined into Abraxis BioScience. Last year, he sold a drug company he had acquired for $75 million in 1998 for an estimated $3-billion profit.

Soon afterward, he and his wife created the Culver City-based Chan Soon-Shiong Family Foundation. Two years ago, the foundation donated $35 million to renovate St. John's Health Center in Santa Monica and connect researchers and doctors to speed the use of new treatments. Last month, they gave the hospital $100 million more to create and staff research centers. The King guaranty will come from the same pool, Soon-Shiong said.

"I'm choosing my projects very carefully, driven by where I came from," he said.

Soon-Shiong was raised in South Africa but said he owes a debt of gratitude to the U.S. "I may do something there too, but this is in my own backyard. This is home," Soon-Shiong said. "I'm an American now, and I have been really blessed with opportunities here."

Soon-Shiong has been involved in previous efforts to reopen King, but failed to broker an agreement with Pacific Hospital in Long Beach last year after supervisors questioned the soundness of the funding.

At the time, some supervisors expressed suspicion about Soon-Shiong. He has fought with investors and business partners, including his brother. Soon-Shiong said the disputes occurred years ago because he stood up for medical principles.

He has been developing a national network for electronic medical records and would like to include King, but it is not clear what access pharmaceutical and other businesses would have to the network.

Soon-Shiong said he does not plan to profit from the network or his investment in reopening King. "There's very little business in patients who are uninsured," he said.

Ridley-Thomas, who has become a champion of Soon-Shiong, called him "well-vetted" and said improvements at St. John's demonstrate his commitment.

Soon-Shiong said he plans to release more details about his offer during an appearance with Ridley-Thomas and state Assembly Speaker Karen Bass (D-Los Angeles) today.

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molly.hennessy-fiske@latimes.com

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