Feb. 20--California Atty. Gen. Kamala D. Harris on Friday approved the heavily debated sale of a chain of six struggling Catholic hospitals -- including two in Los Angeles County -- to a rapidly growing Ontario company.
But she included a number of "strong conditions" on the sale, and it was uncertain whether Prime Healthcare Services Inc. would proceed with the purchase of the Daughters of Charity Health System.
The Catholic hospital chain had warned that it would file for bankruptcy protection, reduce services and potentially close hospitals if the sale was not approved.
"I'm hopeful on the first glance," said Daughters of Charity Chief Executive Robert Issai. He said he Prime executives will likely need time to review the conditions.
Harris outlined 11 conditions for the sale, most which are designed to maintain the same standard of care currently offered. Prime must continue to participate in Medi-Cal and Medicare programs for 10 years. The company must also continue to operate four hospitals -- St. Francis Medical Center, O'Connor Hospital, Saint Louise Regional Hospital and Seton Medical Center -- as acute care facilities with emergency services for 10 years.
Another condition requires that Prime continue to provide "charity care and community benefits at historical levels."
Prime Healthcare agreed in October to pay about $843 million in cash and assumed debt to acquire the six hospitals, which include St. Francis Medical Center in Lynwood and St. Vincent Medical Center near downtown Los Angeles.
Some unions and elected officials had lobbied Harris to block the sale, saying Prime Healthcare was more concerned with profits than treating the sick and poor, a long tradition of the Daughters of Charity hospitals.
Issai had urged Harris to approve the sale. He said the six hospitals had been losing more than $10 million a month and could not survive without a sale to Prime Healthcare.
In an interview Wednesday, Harris said her decision would be "based on protecting access to healthcare services and maintaining the continuity of care -- that's a big concern and a big issue -- and then protecting workers."
The closely watched sale has divided organized labor, with the Service Employees International Union-United Healthcare Workers West opposing the sale and the California Nurses Assn. supporting it. Both sides have held public demonstrations to voice their opinions.
The SEIU-UHW, which represents about 2,600 of the chain's 7,600 employees, says Prime Healthcare is a bad fit because it has a history of cutting services to improve profits. The United Nurses Assn. of California/Union of Health Care Professionals also opposes the sale.
The California Nurses Assn., which represents about 1,800 Daughters of Charity nurses, says Prime is the best option to keep the hospitals open and preserve jobs and employee pensions.
In addition to the two Los Angeles County hospitals, Daughters of Charity also manages: O'Connor Hospital in San Jose; St. Louise Regional Hospital in Gilroy; Seton Medical Center in Daly City; and Seton Coastside in Moss Beach near Half Moon Bay.
UPDATE
4:15 p.m. Updated with conditions of the sale and comments from Daughters of Charity Chief Executive Dr. Robert Issai.
