Press Release December 22, 1998	Contact: Julio Mateo, Jr., (415) 431-6747 Consumers Union's West Coast Regional Office

SAN FRANCISCO - Consumers Union is urging California Attorney General Dan Lungren to refrain from issuing a lame duck decision in the proposed San Jose hospital "swap" between nonprofit Alexian Brothers and for-profit Columbia/HCA until the Illinois Attorney General completes a review of some financial documents that have recently raised questions. Alexian Brothers is paying Columbia/HCA $285 million for one Illinois facility that Columbia purchased in 1992 for approximately $20 million. This translates into a $265 million - or 1280% -- profit for Columbia/HCA in six years.

In a letter late last week, Consumers Union urged the California Attorney General to investigate theses figures and determine whether Alexian Brothers board members may have violated their fiduciary duties by spending nonprofit dollars in this way. The California Attorney General's office referred that request to the Illinois Attorney General, where the facility in question, Hoffman Estates, is incorporated. Alexian Brothers Health System, Inc., which is formally purchasing the Hoffman Estates facility, is also incorporated in Illinois.

Consumers Union today asked the California Attorney General to withhold any decision on this hospital "swap" until the Illinois Attorney General resolves these issues.

"If these numbers are accurate, Alexian Brothers appears to be paying an astronomical amount," said Julio Mateo, Jr., staff attorney with Consumers Union. "Since the Illinois and San Jose components of this 'swap' are simultaneous, one deal cannot happen without the other. The California Attorney General has a duty to withhold a decision until Illinois resolves this matter."

"If this sale involved two for-profit companies, shareholders would be lining up to question the price and file suit," Mateo said.

Consumers Union urged the California Attorney General to seek an independent valuation of all the assets to be transferred in California and in Illinois as part of this "swap."

"Without an independent valuation," Mateo said, "there is no yard stick by which to measure whether the proposed deal is fair to the residents of California and Illinois, and is in the public interest. The California Attorney General must act to get an independent valuation before this deal is approved. While the Attorney General has taken some steps to review this deal, he needs to go further."