San Francisco to Pay $2.2 Million Settlement to Victims in Laguna Honda Patient Abuse Scandal

San Francisco is poised to pay $2.2 million to settle a lawsuit over a patient abuse scandal at Laguna Honda Hospital and Rehabilitation Center, where a group of nurses were found to have taken nude photos of some patients and drugged and abused others between 2016 and 2019.

The lawsuit involved 11 older residents at the city-run hospital who were under conservatorship, in which a court-appointed family member or other individual was charged with overseeing their finances and medical care. Each of the victims will be compensated based on the extent of abuses they suffered.

The settlement amount was agreed to Thursday by the Board of Supervisors’ Government Audit and Oversight Committee and now heads to the full board and mayor for final approval.

“We believe this is an appropriate resolution given all of the circumstances,” said Jen Kwart, spokesperson for the City Attorney’s Office. “Laguna Honda Hospital is committed to providing excellent care and treating all residents with dignity.”

The lawsuit stems from a 2019 California Department of Public Health investigation (PDF) that confirmed multiple claims of patient abuse by six former nurses at the hospital.

“This first settlement is really a step in the direction to try to get justice for those people who have been experiencing neglect and, in my own opinion, still experiencing neglect up at Laguna Honda,” said Kathryn Stebner, an attorney who represented the plaintiffs and is pursuing two other pending cases against the city related to abuses at the hospital.

“One of the women had a gag over her mouth and part of her breasts were showing,” she added. “Other people were given medications without their consent.”

The 2021 lawsuit was filed just months before the hospital — one of the country’s oldest and largest skilled nursing and rehabilitation centers — reported two nonfatal patient overdoses involving smuggled methamphetamine and fentanyl. That disclosure triggered a series of on-site inspections from state and federal officials, which eventually resulted in regulators decertifying the 157-year-old hospital.

Last year, Laguna Honda was found to still be out of compliance on a number of safety issues, prompting federal regulators to cut Medicare and Medi-Cal funding, which covers the majority of its mostly lower-income patients. The hospital was also required to draft a closure plan and begin discharging or relocating patients by September 2022.

But of the 57 patients who were initially transferred or discharged, 12 died shortly after being relocated. San Francisco subsequently sued the federal government, temporarily halting the transfer process.

Last month, regulators again postponed the transfer deadline, to Sept. 19, 2023, and have allowed subsidized Medicare and Medi-Cal payments for remaining patients at the hospital to continue through March 2024.

Stebner’s firm is also representing families of patients — as part of a class-action suit against the city — who died after being discharged in 2022.

“This is a good start,” Stebner said of the most recent settlement. But, she added, “we still have a lot of work to do.”