Addiction Medicine Services Closes Rehab Center

Lompoc Valley Medical Center Left Holding $28 Million in Loans and Losses

Even in the midst of the nation’s worst opioid crisis, Addiction Medicine Services managed to lose so much money so fast that it was forced to pull the plug on its Lompoc detox and rehab center last year after less than two years in operation. The Santa Barbara County Grand Jury found this failure left the Lompoc Valley Medical Center ​— ​the state’s oldest public hospital district ​— ​holding the bag on $10 million in operating losses and an $18 million loan that costs about $1 million a year to service. The Medical Center owned Lompoc’s old hospital, which it leased out to Addiction Medicine Services in 2014. The Grand Jury concluded the hospital district failed to pursue basic due diligence before entering into the deal. It also failed to establish the licensing necessary to secure contracts with major insurers. These failures, coupled with the absence of any marketing plan, led to occupancy rates of less than 40 percent.

This horror story of eyes-wide-shut financial planning is of keen public interest because county supervisors have been in negotiations with the hospital district to acquire the recently renovated hospital property to transform it into an 80-bed acute-care psychiatric facility for those with long-term needs. Currently, no such facility exists in Santa Barbara County, forcing the Department of Behavioral Wellness to export such patients at the cost of millions of dollars annually. Behavioral Wellness Director Alice Gleghorn, who has long argued for the county to invest in the creation of long-term acute care, said she could not discuss real estate negotiations, which the county supervisors authorized April 3 in a closed-door session, and would not comment on rumors that the asking price for the hospital was $10 million.

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