Union Cites Maternity Cuts in Prime Bid

As the Feb. 15 deadline for Attorney General Kamala Harris to make a decision allowing Prime Healthcare Services to purchase six hospitals from the Daughters of Charity Health System draws near, charges about the chain's business practices have intensified.

The most recent missive from a major labor union opposed to the pending deal includes accusations that Prime has slashed women's healthcare services at properties it has acquired in the past.

According to data released on Wednesday by the Service Employees International Union-United Healthcare Workers West, Prime reduced or eliminated such services at seven Southern California hospitals, cutting the number of deliveries an average of 60%. At one facility, Chino Valley Hospital in San Bernardino County, the number of births dropped from 927 in the year before Prime acquired it to 518 during Prime's first full year of ownership in 2007. Births were eliminated entirely at Chino Valley by 2014.

The union used data provided by the Office of Statewide Health Planning and Development, which accumulates statistics on hospital operations throughout California.

"Low-income women already struggle enough to get access to healthcare, and that would only get worse if Daughters of Charity is sold to Prime," said Natalie Garza, an emergency room technician at O'Connor Hospital in San Jose – one of the six hospitals Prime is attempting to acquire – in a statement. "This sale needs to be stopped before women are harmed even more by a company that's looking out for its bottom line, not looking out for our medical needs."

Prime issued a statement Wednesday noting that it does not close down service lines at hospitals. In the case of Chino Valley, it was merged with nearby Montclair Medical Center, and that it is revamping the obstetrics department at Centinela Hospital Medical Center in Inglewood.

Daughters of Charity, which owns hospitals in both the Los Angeles and San Jose regions, is losing up to $10 million a month and is in danger of insolvency, according to its management. The organization has said a deal is imperative in order to keep the facilities operating.

The for-profit Prime has had mixed success acquiring not-for-profit hospitals in California, with Harris and one of her predecessors vetoing deals, saying they were not in the public's interest. Its business model – which includes canceling contracts with insurers and driving more admissions through the emergency department – has drawn ire from consumer groups and labor unions who claim they drive up the cost of providing healthcare. 

Public hearings on the potential Daughters of Charity sale have been held in recent weeks in both Northern and Southern California. 

Prime has had past baggage regarding the closure of units at properties it has acquired.

The company agreed several years ago to contribute $250,000 toward charitable works to settle a lawsuit brought by the attorney general stemming from its purchase of Sherman Oaks Hospital in 2006. Prime closed a psychiatric unit for geriatric patients not long after the transaction closed, apparently violating a condition of the sale that Prime keep the unit open for at least six months in order to evaluate its cost and benefits to the community and other alternatives. Prime later reopened the unit.

In addition to the unit closure charges from the SEIU-UHW, the union also resurrected a charge that Daughters of Charity passed on a better offer from New York based venture capital firm Blue Wolf Capital Partners. 

According to the union, Blue Wolf's bid included a pledge of $300 million to improve the infrastructure of the hospitals, double that of the $150 million Prime has committed.

But Daughters of Charity Chief Executive Officer Robert Issai has claimed that Prime's offer is better than Blue Wolf Capital’s because it included guaranteeing pension benefits for the system's 7,600 employees.

“Our proposal was fully financed, honored all obligations to third party lenders and protected all worker and retiree pension benefits,” Adam Blumenthal, a Blue Wolf managing partner said in a letter to the San Jose Mercury News last October.

Harris announced earlier this week she would seek the U.S. Senate seat that will be vacated after Sen. Barbara Boxer’s term expires in 2016. It is unknown how that decision might impact how she will rule.