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In 2009, something unusual was going on at National City’s Paradise Valley Hospital.

The number of cases of malnutrition among seniors was sky high. At Paradise Valley, the rate: one-third of all seniors. That’s compared to just 5 percent among 13 other hospitals in the county. The same pattern held up at its sister hospitals across the state, all owned by a company called Prime Healthcare Services, according to a California Watch investigation.

The chain, which recently bought another hospital here, is already under investigation into whether it billed Medicare for medical problems that didn’t exist. Now the malnutrition statistics, among others uncovered by reporters, raise new questions about its practices.

Prime Healthcare Services denies wrongdoing and says the reports of malnutrition in seniors — which can allow it to seek financial bonuses from Medicare — are a sign of its commitment to health.

Here’s a closer look at what California Watch, a statewide nonprofit investigative news outlet, found in statistics from 2009, when the company only owned Paradise Valley locally. (It bought San Diego’s Alvarado Hospital late last year.)

— Malnutrition cases among seniors are very high at Prime facilities. “Of the 10 California hospitals that reported the highest malnutrition rates among Medicare patients, eight — including the top four — are owned by Prime.”

At Paradise Valley the rate was 36.2 percent. In contrast, the rate was in the single digits among non-Prime-owned hospitals in San Diego, Los Angeles, Orange and San Bernardino counties.

— There are “alarming” rates of a nutritional disorder called kwashiorkor at Prime hospitals in the Northern California city of Redding and in Victorville, a desert city north of San Bernardino.

The condition is extremely rare in the United States and is considered a Third World disorder. It strikes children, especially during famines. “I’ve not really seen that diagnosis here,” a dietitian told California Watch. “Kwashiorkor is more of a protein malnutrition that you find in other countries — you know the pictures you see of African children with big bellies.”

But in 2009, the kwashiorkor rate was 16 percent among Medicare patients aged 65 and older at the hospital in Redding, 70 times the state average. The rate was 9 percent, 39 times the average, at the Victorville hospital.

The rate wasn’t unusually high at National City’s Paradise Valley Hospital: It occurred in 0.2 percent of patients compared to 0.1 percent in the rest of the county. The statewide rate is 0.2 percent.

Prime Healthcare Services is already under investigation by the federal and state governments over rates of an infection called septicemia in seniors. California Watch says its rate was triple the national average in 2008, and lawmakers called for an investigation, saying an analysis showed signs of overbilling.

Prime’s director of reimbursement told California Watch that it doesn’t engage in billing fraud, and he added that the malnutrition disparity “means there are patients going undiagnosed and untreated” at other hospitals. The director also lashed out at an employee union that he says prompted investigations with a “faulty and misleading analysis.”

Prime Healthcare Services, based in the Inland Empire city of Ontario, relies on a business model that “challenges convention,” as the U-T put it last year when the company bought the troubled Alvarado Hospital:

The company often cancels contracts with HMOs when it takes over a hospital and renegotiates the deals so fees for patient services are higher. Insurers who refuse the more costly contracts may pay even higher rates if a policyholder goes to a Prime Healthcare emergency room anyway.

Meanwhile, Prime bulks up the emergency room in order to boost patient volumes. That’s particularly important with patients covered by insurers that refuse to sign contracts with Prime… Not surprising, Prime’s practices have drawn sharp rebukes from some of the state’s largest HMOs which have criticized the strategy for helping to drive up health care costs.

Please contact Randy Dotinga directly at randydotinga@gmail.com and follow him on Twitter: twitter.com/rdotinga.

Randy Dotinga

Randy Dotinga is a freelance contributor to Voice of San Diego. Please contact him directly at randydotinga@gmail.com...

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