Dr.Prem Reddy has become one of the most Powerful Enterpreneur in Healthcare.

Hospital chain Prime Healthcare faces a fight to grow

Buried in debt, Centinela hospital of Inglewood was on the verge of bankruptcy in 2007. It had lost $50 million in four years, and local officials worried that it might close — following the path of several other South Los Angeles hospitals.

But where others saw risk, cardiologist Prem Reddy saw opportunity.

Reddy's company, Prime Healthcare Services Inc., bought Centinela and quickly turned it around, cutting expenses and increasing revenue. Centinela lost $63 million in 2007. Six years later, it made $39 million. Today it's rated among the better-performing hospitals in the state.

The Ontario company has followed the same model over and again, growing from a single hospital in 2001 to the 30 it now operates in nine states.

Reddy has become one of the most powerful — and polarizing — figures in healthcare.

Critics say he reduces important but unprofitable services. Supporters say he's rescued hospitals that otherwise would have failed, improved services and provided an impressive amount of care to indigent patients.

"Saving these six hospitals is very dear to me," Reddy told The Times. "I hope and pray the attorney general looks into what went into this decision-making process and, more importantly, what will be the consequences if she denies this: Six hospitals will go into bankruptcy."

While attending a medical conference in Anaheim, Reddy learned about an opening for a cardiologist at St. Mary's Medical Center in San Bernardino County. He liked the Apple Valley suburb's quiet pace.

"It was like coming back to the village where I came from," he said. "A lot of tumbleweeds."

He learned a quick lesson about living in the desert community, which he still calls home: When tumbleweeds drift onto the road, "You need to be careful not to swerve your car.

You need to hit them straight on."

It's how he approaches business too.

Through the years, Prime Healthcare has developed a model to help turn money-losing hospitals profitable, Reddy said. It slashes middle management, which reduces costs and speeds decision-making. And if insurance contracts pay too little, he negotiates new ones.

The turnaround of Centinela hospital was key to a region that had been hit by the closures of Daniel Freeman in Inglewood, Robert F. Kennedy Hospital in Hawthorne and Martin Luther King Jr./Drew Medical Center near Watts.

"Centinela was in danger of closing," Inglewood Mayor James T. Butts Jr. said. "It now flourishes."

Still, many people have asked Reddy whether acquiring the Daughters of Charity hospitals is worth the fight.

"I have more than enough money to satisfy me and my family, but that's not what's important to me," he said. "It's the mission: saving hospital companies, saving lives. That fire won't die, until I die."

Erica Mary