Two advocacy organizations dedicated to protecting the health and well-being of underserved populations in Fresno are suing the Community Health System (CHS), the nonprofit that operates the two major hospitals in the region. The suit alleges that funds intended for improving the aging Fresno-based Community Regional Medical Center (CRMC) were funneled instead to build a state-of-the-art medical campus in Clovis.
The Oxford Dictionary defines embezzlement as “theft or misappropriation of funds placed in one’s trust or belonging to one’s employer.” That might not be exactly the crime CHS is being accused of but according to the plaintiffs, Cultiva La Salud and Fresno Building Healthy Communities, it comes close.
CHS’s board of directors, the lawsuit charges, misappropriated $1 billion for the benefit of its Clovis facility in an affluent sector of the metro area. In a press statement, the groups expressed their rationale, “We bring this action because CHS neglected the needs of Fresno’s most vulnerable residents; we are asking the court to order the CHS board to provide full and equal access to quality healthcare for all their patients, regardless of their race, ethnicity, national origin or zip code.”
This was all exposed publicly in a deep investigative report two years ago by Fresno Bee reporter Yesenia Amaro. Cultiva La Salud’s executive director Genoveva Islas underscores the harm done by this mismanagement of funds.
“Community Regional Medical Center spent money that was really supposed to be dedicated to benefit low-income underserved populations in Fresno for the development of this sort of expansive luxurious facility in Clovis. And we want that to stop. Communities here in Central Fresno deserve to have high-quality healthcare. That means that the hospital system should be investing here.”
Islas explained that the hospital board’s favoritism has meant real-world pain at the Fresno hospital. “This is supposed to be the Central Valley’s Acute Care Trauma Center. So, it means that, unlike Clovis, the severe cases of injuries, car accidents, shotgun wounds, and very traumatic health conditions are supposed to be treated here, and yet the hospital has not been investing here.
“And what we believe is that the lack of investment is jeopardizing the health and well-being for all of us, not just people in Fresno, but really for the region that depends on this hospital to be performing at its best ability.”
Even more outrageous to observers is the fact that the torrent of money pouring into the Clovis campus was generated by the Fresno facility.
Islas described how that worked, “I believe that there was a misuse of public funds because the way that hospitals are reimbursed is for their service to Medi-Cal members. Those monies should be rededicated in ways that benefit the community. In fact, part of their obligation is to create community benefits.
“So, we believe that only a quarter of the $1 billion in funds were allocated for Fresno CRMC, while most of it was used to develop the Clovis community hospital.”
As an example, Islas cited a statistic to highlight the difference and the disparity, “Fresno CRMC has 685 licensed beds, but they have served over 116,000 emergency room visits just in 2023. Fresno Community Regional Medical Center serves a higher volume of patients, and the vast majority of those patients are low income or immigrant, or people of color.”
Sandra Celedon, president of Fresno Building Healthy Communities, reiterated the theme of disrespect: “Community Health System is a not-for-profit organization that pays no taxes. In exchange, CHS is supposed to reinvest its profits to improve the health of everyone, starting with those with the greatest need and CHS is falling short of this responsibility.
“While our downtown [Fresno] hospital deteriorates, the Clovis hospital continues to expand its hard-to-reach, luxurious facilities. There is no oversight or accountability for this neglect.”
But do these community groups have the legal standing to bring a successful lawsuit? Islas says they do and that it is a matter of equity.
“Basically, why we feel we are adequate to represent this case is because the population that we serve are in fact, low-income community members.
“Cultiva La Salud serves largely Latinos, we are immigrant families. These are families that often are without health insurance. They are the families that are showing up at emergency rooms when they can no longer bear their illness or when they have had an injury that they can’t take care of at home.
“I worry that it will mean that one day my children or my family will go with inadequate care because the people who are holding the purse strings and making decisions at the hospital level are not doing it.”
Islas confirms they began asking questions in the wake of the Fresno Bee article. “Our legal counsel did begin to ask for disclosure of how those dollars were being invested. And even though the hospital system is a nonprofit, they have been reticent to release information. And so that’s really the backbone of what we want.
“Obviously, we want justice, we want the right investments, but we also want transparency. We want to make sure that our hospitals that are benefiting from state or federal dollars that are meant to be serving us are doing it in a sound way.”
Patience Milrod, lawyer for the plaintiffs, commented in a press release, “Filing a legal action was the last thing we wanted to do. But we have been asking nicely now for well over a year, trying to bring to light the decisions resulting in this egregious neglect of our essential downtown hospital. We are still not clear why we have to sue people to find out how they’re spending taxpayer money.”
Islas insists the lawsuit is aimed at forcing the administration to recuperate the old Fresno campus that has substandard earthquake protection, and not aimed at the overworked and overstressed staff.
“When we are overworking our staff in the hospital it means that we’re stretching them, that they’re having to work longer hours. We want justice for them as well. This is not to blame anybody that is currently working to help and provide healthcare to our communities.
“The target of this is to take corrective action, where people aren’t having to lay in hallways on gurneys waiting and praying that a bed gets assigned to them. Where they are able to get diagnostic tests by state-of-the-art equipment that is available to them onsite. I think that this is something that everyone should care about.”
Over the five-year period from 2017 to 2023, the CHS board allocated $1 billion to benefit Clovis Community Medical Center while spending $400 million on the Fresno hospital, despite that campus being a larger facility with a higher and more challenging patient load. It is especially harmful as the Fresno campus is responsible for generating 85% of the provider fees collected by the hospital administration.
This lawsuit details a healthcare system applying a cruel form of triage to its own patients. The complaint states in part, “As they (CHS) poured resources into their Clovis campus, respondents were aware their safety-net hospital, Fresno CRMC, required critical upgrades due to antiquated facilities, outdated and malfunctioning equipment, insufficient operating rooms, an overwhelmed emergency department and chronic understaffing.
“Respondents were also well-aware of the high levels of Medi-Cal eligible, migrant farmworker, low-income, uninsured and homeless patients for whom Fresno CRMC was their only healthcare option, the vast majority of whom are Latino and Black.”
Islas encourages people who have had negative experiences at Fresno CRMC to contact Cultiva La Salud: “We do have a website called Care for Fresno (care4fresno.org.) There is a page on that website where people can share their stories. And there is contact information. If people want to talk to us, they are free to do that.”
