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The San Benito Health Care District monthly meeting is scheduled for Dec. 19 at 5 p.m.
A damning investigation by The American Prospect magazine into Insight Health claims that the company engages in questionable business practices and is buying troubled hospitals with false promises that it will save them.
The article, titled “The Ambulance Chasers of Totaled Hospitals,” reviewed court documents and other public records and spoke to unnamed former Insight employees. A number of former employees at Insight’s Chicago hospital, which it purchased in 2021, said Insight “lacks the resources—both financially and managerially—to functionally operate that single facility, much less any others.”
They claimed that Insight physicians filled their operating rooms with surgeries viewed as unnecessary, using various schemes such as trolling nearby nursing homes, recruiting and paying people who were in vehicle accidents for “fraudulent treatment,” and using the emergency room for surgeries to bypass insurance company approval requirements. Former employees also said Insight Health double-billed those companies.
Michigan-based Insight Health is negotiating with the San Benito Health Care District on a potential lease/purchase agreement for Hazel Hawkins Memorial Hospital. In November, voters passed Measure X, which allowed the district to pursue negotiations with Insight or other qualified buyers. However, the board can still reject Insight’s offer.
As of Dec. 19, negotiations are ongoing between the health care district and Insight. Both parties, however, have agreed to initial terms (see below).
San Benito Health Care District Director Devon Pack said he takes the allegations in the published report seriously, but that they needed further investigation and confirmation.
Marcus Young, a consultant for Hazel Hawkins, said the hospital cannot comment on the allegations made in the article but that it is “thoroughly examining all relevant claims” and their impact on Hazel Hawkins.
“As part of the ongoing negotiations with Insight, a comprehensive set of operating covenants is being established to ensure that the hospital and its operations are maintained to a high standard of care and fiscal responsibility,” he said. “These covenants are specifically designed to hold any potential buyer accountable to agreed-upon requirements, guaranteeing that the hospital is operated in a responsible, ethical, and sustainable manner.
Pack pointed out that the article states Hazel Hawkins was sold to Insight for $60 million, which is inaccurate.
“It made two very significant misstatements about the position of Hazel Hawkins and Insight and that in turn leads me to question the accuracy of some of the other allegations made in that article,” he said.
He acknowledged the $60 million figure is within the realm of the reported market value of the hospital.
Pack said the health care district board will demand Insight to prove its financial capabilities to deliver on the initial terms before moving forward.
“It will be necessary for Insight to demonstrate that it has both the capital to be able to undertake this proposal and that it also has the human capital and talent level to be a trustworthy partner that can be trusted to execute their proposal,” he said.
BenitoLink found that Insight Chicago, a nonprofit hospital that is touted as the blueprint of what Insight plans to do in Hollister, lost $7 million in 2022, according to the latest available income tax forms. That year, the hospital paid Insight Health $12.7 million in management fees.
This contradicts what Insight Health Chief Medical Officer Rany Aburashed told BenitoLink. He said that they do not charge a management fee to hospitals if they aren’t profitable.
Amid the potential fallout and criticism following the American Prospect article, Chicago Insight recently was awarded $22.5 million by the state of Illinois for its Urgent/Primary Care buildout.
Insight didn’t immediately respond to specific questions but directed BenitoLink to the statement provided to American Prospect, which states, “We’ve developed a distinct approach to assuming management of troubled hospitals experiencing unique challenges that often result from years of mismanagement. Our goal with every engagement is to make a positive difference and ensure patients have access to care that is second to none.”
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