Prime Pulls out of Purchase of Daughters of Charity Health System after Attorney General Conditionally Approves the DealPosted by Ine Collins, Healthcare Systems Policy Analyst on March 18th, 2015
On February 20th, the Attorney General, Kamala Harris, announced her decision to conditionally approve the sale of Daughters of Charity Health System (DCHS)—a non-profit chain of six struggling California hospitals—to Prime Healthcare Services, a controversial for-profit company that owns hospitals in California, Nevada, Kansas, Pennsylvania, and Rhode Island, for a total of $843 million. Her approval came with several conditions aimed at addressing many of the concerns opponents have voiced about Prime purchasing the health system. Some health access protective measures include:
However, these and other conditions proved too onerous for Prime who announced on March 10th that they would no longer be pursuing the purchase of the health system. Originally, Prime pledged to keep all hospitals open for at least five years. But in December the state tentatively announced their recommendation of ten years instead for some facilities which is further than conditions have gone in the past. These conditions were imperative to preserving services in the safety-net areas that
Now it is up to DCHS to find a new buyer for the entire system as they had hoped or for individual hospitals. For example, Santa Clara County is still willing to buy two hospitals in Gilroy and San Jose that it unsuccessfully bid for last year. With every passing day, without a buyer, DCHS continues to bleed money at the rate of $10 million a month. If they cannot find another buyer, DCHS will have to execute the contingency bankruptcy plan it developed which could set off a cascade of health care access issues.
Posted in 2015