San Diego Grand Jury OKs Controversial Hospital Agreement

ESCONDIDO, Calif. -- A county grand jury report finds it was okay for Kaiser Permanente to keep parts of a controversial bed "guarantee" agreement with Palomar Medical Center a secret because the health care industry is so competitive, it was reported Friday.

The report vindicates the longtime stance by officials from both health care providers that their agreement was properly disclosed and not a misuse of money from a 2004 taxpayer-funded facilities bond, according to The North County Times.

"It clearly indicates what we've said all along," PPH Chief executive Michael Covert told the newspaper. "And it negates what the naysayers have said about misuse of public funds."

The controversial agreement guarantees Kaiser roughly 100 beds at the new 300-bed Palomar Medical Center under construction in western Escondido.

Critics argued PPH should not guarantee publicly financed hospital beds to a private managed-care provider, such as Kaiser. They also said voters should have known about the deal before they approved the $496 million bond measure that is paying for the new hospital.

But according to the grand jury, state law allows public health districts to protect their trade secrets and the deal with Kaiser falls under that category, the Times reported.

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