California Hospital Ends Contract With Physician Firm After Finding Conflict of Interest

Palm Drive Hospital in Sebastopol, Calif., is set to terminate a contract with a firm that provides the hospital with physicians due to a potential conflict of interest created by a board member's loan to the company, according to a Press Democrat report.

OffSiteCare, also based in Sebastopol, supplies physicians for the hospital, its intensive care unit and its respiratory therapy program. Board member Dan Smith, who serves as an unpaid business consultant for the firm, loaned OffSiteCare $175,000 and hopes to turn the loan into a financial interest in the company, creating a conflict of interest under state law.

The hospital board has voted 2-to-1 to discontinue contracts with OffSiteCare, but administrators have said they are trying to find a way around the conflict to maintain a business relationship with the firm's personnel.

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