Complicated diagnosis

State officials ordered California Northstate University to stop offering unapproved medical courses in the middle of school’s push to build a new teaching hospital

California Northstate University’s proposed hospital would be located in Elk Grove’s Stonelake neighborhood, near the site of its current school campus.

California Northstate University’s proposed hospital would be located in Elk Grove’s Stonelake neighborhood, near the site of its current school campus.

Photo by Scott Thomas Anderson

A private medical school that’s trying to build a controversial medical campus in Elk Grove has run into trouble with state regulators regarding its education programs.

Over the summer, state officials ordered California Northstate University to stop offering two programs that haven’t been approved by the Bureau of Private Postsecondary Education. Northstate is appealing the decision, even as it tries to convince skeptical Elk Grove residents that it can be a transparent developer.

Now the project’s critics are pointing to the school’s ongoing regulatory issues as a sign that it can’t.

For more than a year, the city has grappled with whether the public safety benefits of a hospital and emergency room outweigh displacing small businesses and imperiling a wildlife habitat.

According to a citation issued by the state Department of Consumer Affairs, the trouble for Northstate started in the spring of 2018, some eight months before the private medical and pharmaceutical school announced its plans to build a teaching hospital and level-two trauma center in Elk Grove’s Stonelake neighborhood. The center would be adjacent to its current campus on West Taron Drive.

On April 26, 2018, state officials launched “an unannounced compliance inspection” at Northestate’s Elk Grove headquarters. Regulators wrote that they found no administrative staff to provide access to the school’s student and institutional records for inspection. Furthermore, they determined that the school had failed to make corrections to a “school performance fact sheet” that the Bureau of Private Postsecondary Education had mandated.

Bureau regulators also took issue with two popular programs that Northstate offers.

“Prior to and during the inspection, Bureau staff found that the institution advertises on its website and in the institution’s catalog, a Bachelor of Science-to-Doctor of Medicine (BS-MD) program and a Bachelor of Science-to-Doctor of Pharmacy (BS-PharmD) program that is not approved by the Bureau,” officials later wrote in their citation.

These events were generally unknown to the public as Northstate spent the first half of 2019 conducting outreach to assuage concerns about its proposed hospital. The project has been championed by Elk Grove Mayor Steve Ly, who has stressed that the proposed trauma center would reduce ambulance rides from 20 minutes to five minutes for city residents.

But the proposed hospital has faced concerns that it would increase traffic, noise and crime in the Stonelake neighborhood. The hospital would displace at least seven local businesses and put a helipad near the federally protected Stonelake Wetlands Preserve, which some residents worry is a danger to birds using the flyway.

This isn’t the first time Elk Grove has debated an embattled development project, one of which, a mall along the Highway 99 corridor, eventually sat half-built and abandoned for years in the wake of the recession. The “ghost mall” has made some residents especially sensitive to projects that they believe aren’t fully fleshed out.

“My No. 1 concern is they’re going to start a project without having the know-how and expertise to complete it,” said Daisey Hughes, who has lived in Elk Grove for 10 years. “I’m concerned because we don’t want another failed project in Elk Grove like the ghost mall.”

California Northstate CEO Alvin Cheung has attempted to offer reassurances at Elk Grove City Council meetings, telling elected officials and the public that his company wants to build a first-class medical facility. But while Cheung made his public appeals, state regulators fined his private school for ignoring questions about the integrity of its educational programs.

On July 19, state consumer affairs officials determined that Northstate still had not addressed the issues they had flagged three months earlier and cited the school for nine state code violations, fined it $6,501 and issued it an abatement order, demanding Northstate cease offering its bachelor’s degrees in medicine and pharmacy.

Northstate is in the process of appealing the citations and orders. As of last week, Northstate was still advertising the two programs in question. According to Northstate’s official website, tuition, fees and related costs for its Bachelor of Science-to-Doctor of Pharmacy program runs around $79,000 a year and $190,000 to $210,000 for a four-year degree.

Northstate University spokesman and attorney Paul Wagstaffe could not be reached for comment.

For the grassroots group Neighbors Ensuring Stonelake Transparency, which first brought Northstate’s citations to light, the company’s regulatory issues offer a preview of what Elk Grove residents can expect from the hospital project.

“I think it’s basically a sign of failure,” Hughes said. “We might be trusting them to build something that’s not in their abilities. This issue with the state is still out there and unresolved.”

Staci Anderson, another Stonelake resident and member of NEST, agrees.

“It underscores the fact that everything [Northstate] attempts to accomplish becomes mired in controversy,” Anderson said. “They continue to show they don’t do things the right way. In this situation, it’s the students who are paying a lot to be there—and are the ones who stand to really suffer.”

UPDATE: University spokesman Brian Holloway issued a statement by email: “The BPPE has requested that CNU cease offering two programs – a singular BS-MD degree and a singular BS-PharmD degree – which we do not offer and have never offered. CNU offers a variety of programs, including – a Pre-Medicine, Post-Baccalaureate (PMPB) program, a BS of Health Sciences, a PharmD and an MD degree – all of which have been approved by the BPPE. CNU has always been and continues to be compliant in all of its programmatic offerings.”

“We have repeatedly explained in detail to BPPE that CNU does not offer a BS-MD program or a BS-MD degree, nor do we offer a BS-PharmD program or a BS-PharmD degree. CNU offers three separate degrees: a BS degree in Health Sciences, an MD degree and a PharmD degree. Some students choose a pathway that allows for a focused process to complete and receive each separate degree, based on a demanding, specific educational plan.”