Antelope Valley Hospital has filed a lawsuit against Los Angeles County and its board of supervisors, alleging the misallocation of millions of dollars tagged for health care. The Lancaster hospital’s dispute centers on funding from Measure B, which was approved by voters the year after the 9/11 attacks. It levies a special land tax to raise money for a countywide system of trauma centers and medical services to respond efficiently to medical emergencies and acts of terrorism. Antelope Valley Hospital alleges that the county failed to use Measure B funding to address trauma needs. Currently, the hospital handles about 12.4 percent of trauma and ER visits in the county, yet receives 2.9 percent of Measure B funding among noncounty-operated hospitals, according to the lawsuit. Among all hospitals in the county, Antelope Valley serves 5 percent of the county’s population but is allotted less than 0.5 percent of all Measure B funds, less than any other trauma and nontrauma facility in the county, according to the hospital’s calculations. The hospital, which is owned by a public district similar to a school district, estimates that it should receive at least $12 million a year, yet it only gets a little more than $1 million, the suit alleges. The lawsuit follows a California state audit last year that criticized how the county allocates Measure B funds. The report concluded that 76 percent of the $255 million generated by Measure B goes to three county-run public hospitals, while slightly less than 16 percent goes to 12 noncounty-operated trauma centers, including Antelope Valley Hospital. Fred Leaf, senior health policy adviser for county Supervisor Michael Antonovich, commented in an interview on this issue: “The Department of Health Services is currently working with the noncounty trauma hospitals to reassess Measure B allocations. The Department wants to make sure they understand how the Affordable Care Act has impacted the costs of providing trauma services and that the allocation methodology results in a fair and equitable distribution of funds.” The lawsuit seeks economic damages and relief, but did not state a dollar figure. Merger Money Health Net Inc. will hold a special shareholder meeting later this month at its Woodland Hills headquarters to approve its merger with Centene Corp. of St. Louis as well as approve executive compensation tied to the deal. The health insurance provider will convene the gathering Oct. 23 to vote on a joint proxy statement issued by the two companies. Centene will hold a shareholder meeting on the same day in St. Louis. In addition to the merger, Health Net shareholders will give an advisory vote on merger-related executive compensation. The company provides two payment options for its executives – payments without a qualifying termination, meaning the executive continues with the merged company in a new position, or payments with a qualifying termination, meaning the executive is out of a job. If Health Net Chief Executive Jay Gellert continues working for the combined company, he will receive $29.7 million, according to the prospectus. If he doesn’t have a job after the deal closes, he is set to receive nearly $54 million. Through the merger, Centene will acquire all Health Net shares in a transaction approximately valued at $6.8 billion, which includes an assumption of debt around $500 million. After the transaction, Centene shareholders will own roughly 71 percent of the merged companies with Health Net shareholders owning the remainder. The companies expect the transaction to close by early next year. Clinton Effect Two weeks ago, Hillary Clinton sent the tweet heard round the biotech world, lowering the stock price of many companies, including Thousand-Oaks biopharmaceutical giant Amgen Inc. On Sept. 21, the former secretary of state and current Democratic presidential candidate wrote: “Price gouging like this in the specialty drug market is outrageous. Tomorrow I’ll lay out a plan to take it on. – H” Clinton was responding to a New York Times’ article reporting that the drug Daraprim, a 62-year-old anti-parasitic medication that treats people with weakened immune systems, increased in price from $13.50 a tablet to $750 overnight. Clinton’s tweet sent biotech stocks into decline. Just one day after the post, the iShares Nasdaq Biotechnology ETF index dropped more than 4 percent, while Amgen’s stock fell 3 percent, closing at $145.93. That same day, Turing Pharmaceuticals, the company that acquired Daraprim and increased its price over 5,000 percent, announced that it would reduce the price of the drug but did not provide a specific dollar amount. Despite Amgen’s recent acquisition of Dezima Pharma B.V. and the FDA approval of two of its drugs Corlanor and Repatha, Amgen stock continued to fall after Clinton’s tweet. Shares closed Sept. 30 at $138.32. Staff reporter Stephanie Henkel can be reached at (818) 316-3130 or [email protected].
