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Support for Daughters of Charity Sale to Prime Healthcare Grows In California Media

February 6, 2015

A number of recent stories in California’s media have made a powerful case for the approval of the sale of the Daughters of Charity Health System to Prime Healthcare.  The LA Times recently published two stories on the controversy, including a clear and compelling editorial, titled “Let Prime Healthcare Buy Daughters of Charity Hospitals.”  The opinion piece that was addressed to Attorney General Kamala Harris and sought to praise the sale as well as answer some of its critics.

Prime believes it can turn the Daughters’ hospitals around not just by collecting more from insurers, but also by cutting overhead and providing better, more efficient care. It should have the chance to do so.

Another LA Times article, Hospital Chain Prime Healthcare Faces a Fight to Grow, featured the story of Prime Healthcare founder, Dr. Prem Reddy, his passion for saving community hospitals, and his efforts to build a successful healthcare business in today’s challenging economy.

“Saving these six hospitals is very dear to me,” Reddy told The Times. “I hope and pray the attorney general looks into what went into this decision-making process and, more importantly, what will be the consequences if she denies this: Six hospitals will go into bankruptcy.”

The Sacramento Bee weighed in with a powerful opinion piece penned by Daughters of Charity Board Member Daniel Higgins, who defended Prime Healthcare’s record of saving struggling hospitals in California.

Ontario-based Prime Healthcare has made a business of acquiring and saving struggling hospitals – 29 of them in the U.S., including 15 in California. None of the hospitals they have acquired have been sold or closed, and the company cites quality care metrics that have earned accolades from several reviewing agencies.

Consumer Watchdog was one of a number of organizations to come out in favor of the sale and spoke out at a public hearing at St. Francis Medical Center in southern California. Their article describing the event features the written testimony of  consumer advocate Michael Kapp.

“Given St. Francis’ critical role in providing quality healthcare for this service area, without this sale, this community will be at risk of losing key services that are essential for the low-income, uninsured, and under-insured patient population,” said Michael Kapp, a consumer advocate with Consumer Watchdog. “Prime Healthcare’s bid should be approved to ensure that this community doesn’t lose a desperately needed healthcare facility.”

An article in the Gilroy Dispatch covered the resolution passed by the local city council in support of the Daughters of Charity sale.

The resolution, passed unanimously Monday night by the seven-member council, reads, in part, “The Daughters of Charity Health System is…in danger of closing its doors if the sale … to Prime Healthcare Services is not approved … the health and wellbeing of Gilroy residents and all persons … in the south Santa Clara County region depend on access to and care of a locally operated hospital … the paramount concern of every elected official must be the health, safety and wellbeing of the public …”

The resolution will be sent to California Attorney General Kamala Harris, who has final say and will decide by Feb. 20.

The city joins, among others, the Gilroy Chamber of Commerce, the Gilroy Economic Development Corporation, the Morgan Hill Chamber of Commerce and the California Nurses Association in support of the sale. Morgan Hill’s city council had not taken an official position as of press time.

Finally, an article last month in the Silicon Valley Business Journal made the case that Prime Healthcare’s track record includes a deep concern for the poor and under-insured of California. Along with some clarifying facts and figures about the sale, the piece quoted Daughters of Charity CEO Robert Issai describing his gradual journey toward realizing that the non-profit hospitals had to be sold and that Prime Healthcare was the right fit. He also addressed the inadequacy of other bidders, like Blue Wolf Capital.

“[Prime Healthcare] do not walk away from the poor. They have done for 15 other hospitals in California, five of which were non-profit, what they say they will do for us,” Issai said. “We have checked them out, and there is no reason not to sell as far as quality goes.”

He said he had concerns over the sale as well and tried to keep the hospitals under Catholic ownership through companies such as Ascension Health, but the nine months of research he did after realizing that wasn’t possible assured him Prime was the right fit.

Blue Wolf, on the other hand, did not even have the funds already secured to buy, and Issai said they would not have been considered if not for SEIU-UHW’s support.

Prime is the only company that met the 11 standards set forth by nurses at the hospital. Blue Wolf Capital did not, because the company did not have experience running hospitals.