Harris Ruling On Prime Deal This Week
California Attorney General Kamala Harris is expected to make a decision by Friday as to whether Ontario-based Prime Healthcare Services should be allowed to acquire the six hospitals operated by the Daughters of Charity Health system.
The deal has attracted the endorsements of two of the state's major newspapers. The Los Angeles Times concluded earlier this month that Daughters of Charity's mounting financial losses and the nearing expiration of emergency financing has put the hospital into an untenable financial position. “Going into bankruptcy wouldn't necessarily close the hospitals, but the process would almost certainly lead to cuts in workers' dangerously underfunded pensions and in the hospitals' services,” the newspaper's editorial page said. “Harris' goal should be to prevent those things from happening, which means keeping the system out of bankruptcy. And considering the perilous state of the Daughters' finances, there's no time to search for new buyers willing to take over the entire system, which appears to be the only financially viable approach.”
The San Francisco Chronicle also supported the deal. "The compelling public interest here is to keep the hospitals open, and to preserve the jobs and pensions of the dedicated workers at Daughters of Charity,” the paper said on Feb. 13. Two other community newspapers in Northern California have also endorsed the deal.
Prime has had mixed success with Harris and her predecessor, now Gov. Jerry Brown. Both have approved and rejected deals in the past for Prime. The chain has garnered controversy over the years for its business practices, which include odd billing patterns for rare medical conditions, canceling contracts with health plans in order to pursue higher charges and protracted legal battles with insurers and labor unions. It said it would keep the Daughters of Charity hospitals open for at least the next five years and preserve most of the jobs at the facilities. An independent analysis of the deal conducted for Harris' office recommended that Prime pledge to keep the facilities open for at least the next decade.
Organized labor is split over whether the deal should go through. The deal is opposed by the Service Employees International Union-United Healthcare Workers West and supported by the California Nurses Association. Both unions have been trading barbs over the deal.
"The truth is, the biggest threat to these hospitals closing is if Prime is approved as the buyer," said SEIU-UHW President Dave Regan. "Prime's bid is the only one that contemplates putting the hospitals into bankruptcy, and Prime won't commit to keeping the hospitals open for 10 years. We urge the Attorney General to reject this sale because Prime cannot be trusted to live up to any conditions she places on the transaction."
