Mayor Dyer ‘disappointed’ with hospital funding decision; councilman wants investigation

Fresno Mayor Jerry Dyer says he is disappointed to learn that Community Medical Centers used state and federal funding generated by its downtown Fresno hospital to expand its campus in affluent Clovis.

“As the Mayor of Fresno it is disappointing to learn that monies generated from services provided at Fresno Community Hospital have been and continue to be used to expand Clovis Community Hospital, especially when there is such a tremendous need in downtown Fresno. It’s not enough to have urban sprawl in our housing market. We now have sprawl with medical services.”

Dyer is not the only person with concerns that stem from the findings in a Fresno Bee investigation.

The Bee on Thursday published online a four-part investigation, Care & Conflict. The stories detail that Community Medical Centers, which recently changed its name to Community Health System but it’s still largely known by its former name, has taken state and federal money intended to offset the cost of providing care for indigent patients, primarily in downtown Fresno, and used it to help fund a $1 billion hospital expansion in Clovis over the past decade.

Today, 90% of the acute care beds at Community Regional Medical Center in downtown Fresno face the threat of closure if CMC fails to bring its key facilities at that campus up to compliance with earthquake standards by 2030.

“Community Health System is confident that all funding has been properly used to support the healthcare needs of the region, with a particular focus on vulnerable communities in Fresno,” Michelle Von Tersch, spokeswoman for the nonprofit hospital, said in a written response to The Bee on Monday.

She added CMC lost $175 million in 2021 caring for Medi-Cal patients.

The Bee’s investigation also lays out what many consider conflicts of interest among hospital board members. Most notably, CMC board chairman Farid Assemi and a longtime former board member, Flo Dunn, own a for-profit medical school less than a mile away from the Clovis hospital. The private school has already seen many benefits from the hospital, including contracts, sponsorships and student clinical rotations. Three board members for the nonprofit hospital board also sit on the board for California Health Sciences University. Dunn, who serves as president for CHSU, continues to attend CMC board meetings as a guest.

CMC also purchased land in Clovis from its board member Jerry Cook. The property is where the nonprofit hospital began to build a skilled nursing facility, but paused construction during the coronavirus pandemic.

CMC is the area’s largest health care provider. The nonprofit operates four medical facilities: Fresno Heart and Surgical Hospital, Community Behavioral Health Center, Clovis Community Medical Center and Community Regional Medical Center in downtown Fresno, which is by far its largest provider. It employs more than 9,000 workers with an annual budget of nearly $2 billion.

Councilmember Arias promises ‘significant announcement’

Also in the wake of The Bee investigation, Fresno City Councilmember Miguel Arias, whose district includes the downtown hospital, said he is evaluating the options available to the city to pursue. Those options, he said, include seeking an audit by the IRS, an audit by the California State Auditor and a review by the California Attorney General’s Office. He said his office will make a “significant announcement” this week.

“Those are three very specific options that our public, our community, has to try and get transparency and clarity on what actions have been taken,” he told The Bee on Friday. He called the funding move the “largest theft of public resources from the most vulnerable community in the Central Valley.”

On Friday morning, Arias said he also directed the Fresno city attorney to secure outside special counsel to carry out a review of all city agreements with the nonprofit hospital. That review, he said, would be to determine if the agreements have been met, and if they haven’t been met, what options the city has “to pursue litigation to rectify the noncompliance.”

Arias said he had a conversation with a hospital representative on Friday who offered a meeting with CMC’s leadership.

“My response to them was, ‘I am so angry right now, and overwhelmed with the amount of phone calls and messages I’m getting from the public about their experience — their substandard experience at Fresno’s emergency room and the hospital — that there would be no value in me sitting down with the leadership who is responsible for the situation,’” he said. “Folks who...lied to us when they assured us two years ago that the Clovis facilities were built solely on, you know, philanthropical contributions when clearly that was not the case.”

Arias said going forward, he will not trust a word from CMC officials and will ask for evidence. He said the hospital has also “violated the community’s trust.”

“They eliminated all the trust they had with this community,” he said. “Don’t tell me that your expansion and reallocation of money has resulted in better services for people. Show me the evidence.”