Harris okays disputed hospital chain sale

State Attorney General Kamala Harris has approved the sale of six nonprofit Catholic health facilities to a controversial buyer under “strong conditions to ensure continued community access to essential healthcare services.”

“The sale of the Daughters of Charity facilities is the largest transaction ever reviewed by the California Attorney General’s Office,” the attorney general’s office noted Friday in a written statement.

Her decision, on deadline, came after months of bickering between two powerful California labor unions — one representing nurses who urged for the sale, and the other the health care workers who opposed it.

Prime Healthcare said it was “thankful” for Harris’ decision, but said the “conditions imposed on this sale by the Attorney General are extensive and many are unprecedented, including maintaining four hospitals as acute care hospitals and a fifth as a skilled nursing facility for a minimum of ten years.”

Earlier this week, more than a hundred members of the California Nurses Association rallied in front of Harris’ headquarters on I Street, calling on Harris to give the transaction her stamp of approval.

They urged her to not impose tough contract terms on the buyer, Prime Healthcare Network, because ultimately it could void the transaction.

A nationwide hospital network with a home base down in Ontario, Prime is currently under federal investigation for alleged improper inpatient billing practices, and has a history of service reductions.

Earlier, a San Bernardino Superior Court Judge found Prime Healthcare – one of the state’s largest hospital chains – in contempt for needlessly admitting emergency room patients into its Chino Valley Medical Center.

SEIU–United Healthcare Workers West opposed the Daughters sale and the powerful union also called on local and state lawmakers to urge Harris to thoroughly review the transaction – or oppose it all together.

The union feared the sale could lead to layoffs of health care workers.

The conditions imposed by Harris have doubled the length of time that earlier negotiations stipulated Prime must operate the Daughters’ five acute care hospitals and its one skilled nursing facility located at Seton Coastside.

The Daughters of Charity Health System operates a network of financially strained healthcare facilities that serve low-income communities, including four located in the Bay Area and two down in Los Angeles County.

Terms of the contract also require officials with Prime to maintain current services at the six facilities, in addition to investing $150 million over the next three years on capital improvements. They will also assume all pension obligations for the 17,000 current and retired employees of Daughters.

Nurses at the rally earlier this week said the greater scrutiny on contract terms could shun Prime away from going through with the purchase. The network currently operates 27 hospitals throughout California.

“If Prime doesn’t buy us, all of these [patients] – where would they go?” Debra Amour, a Daughters nurse who works at the Seton Hospital location in Daly City, said at the rally. “There is absolutely no place for them to go.”

Though other buyers are interested in purchasing the six hospitals in separate portions, the CNA says there isn’t time to wait for another transaction to be approved.

If the Daughters of Charity do not complete their sale by the end of the month, CNA contends the entity will go bankrupt and stop services.

“We need Kamala Harris to make the right decision,” Amour said as she stood at the podium before the crowd of nurses. “In fact, I personally think that this is how we’ll find out who Kamala Harris really is.”

Harris, whose office is statutorily responsible for reviewing any nonprofit hospital sale, tried last session to improve the reviewing process her office has in these transactions.

Gov. Jerry Brown ultimately vetoed that legislation, SB 1094, which would have given Harris more time to review nonprofit hospital sales, from 60 to 90 days, in addition to a one-time 45-day extension.

In lobbying for that bill, the attorney general’s office argued they are seeing more of these nonprofit sales than ever before.

Brown said in his veto message that the regulations related to nonprofit hospital sales are already being reviewed by Harris’ office, and those changes should be implemented before more adjustments are made.



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