When a company is near bankruptcy, it’s all too easy to view the entity that swoops in to buy it as a “savior.” In the case of Prime Healthcare Services, which recently announced its plans to take over six charity hospitals across California, nothing could be further from the truth.
The Comment column by Charles Crumpley (“Union’s Bad Medicine,” Oct. 20) mischaracterized Prime Healthcare as the last and best hope to rescue the financially troubled Daughters of Charity Health System, a non-profit organization that is losing almost $10 million a month and owns two hospitals in Los Angeles County and four in the Bay Area. The column also falsely implies that health care workers would be OK if these hospitals closed. That’s the last thing they want; their jobs are on the line and they understand how critical these hospitals are to the larger community.
Depicting Prime as a “savior” is wrong because there were other competitive bids to buy the hospital chain, and it ignores the broad opposition to Prime’s purchase and the company’s history of reneging on its promises. That’s why it’s hard to believe Prime’s rosy claims that it will keep the Daughters hospitals open, protect jobs and assume $300 million in employee pension obligations.
Here are a few examples of Prime misleading the public:
• When Prime offered in 2013 to buy St. Mary’s Hospital in Passaic, N.J., it said there would be no layoffs and the facility would remain in network for many insured residents. Just days before the sale was completed, lo and behold, 30 employees were laid off and the hospital canceled insurance contracts from two major companies. It was widely understood that Prime had worked out a deal with the hospital to make these moves. Moreover, the company forced taxpayers of New Jersey to pick up $30 million of the hospital’s debt.
• In 2013, when Prime announced plans to buy St. Michael’s Medical Center in Newark, N.J., it offered $65 million. However, Prime 15 months later dropped its offer to $43 million. Despite saying it was committed to the health care needs of Newark, Prime refused to assume the hospital’s $233 million in state-backed loans.
• After Prime bought Knapp Medical Center in Weslaco, Texas, in 2013, the city indicated the company purchased the hospital by grossly undervaluing it. The city manager said, “We were left holding the bag on all the debt. We got bamboozled, and that’s putting it mildly.” The city is now suing Prime.
• In 2007, Prime bought Centinela Hospital in Inglewood, announcing in a press release that it would “maintain all currently-offered services.” Within seven months, it had eliminated the hospital’s maternity and psychiatric care units.
Daughters of Charity didn’t have to risk going down this path, too. It could have chosen a serious bid offered by a company called Blue Wolf Capital. Health care workers supported Blue Wolf’s bid because of the company’s commitment to:
• Embrace and continue the safety-net mission of Daughters of Charity.
• Expand health care services in the affected communities.
• Create a specific solution to preserve and better protect employee pensions.
• Complete a collective bargaining framework with at least two of the three affected unions.
• Recruit key executive leadership with a proven record in health care turnarounds.
• Develop a capital improvement plan.
• Devise a serious and believable plan to avoid the system’s bankruptcy.
By selecting Prime as the lead buyer, Daughters of Charity has ignored the fierce statewide opposition, including that of two U.S. representatives, 30 state legislators, Los Angeles County and Santa Clara County supervisors, the San Jose Mercury News, the Lynwood City Council and many community organizations.
Their concern lies with Prime’s history of dismal care and ethics. The company is under criminal investigation for allegedly fraudulently billing the federal government approximately $50 million. It paid a $275,000 fine after deliberately violating a patient’s privacy by sharing her records with journalists and 800 employees. A group of doctors in San Bernardino County sued Prime last year when the company denied them access to their own patients. In addition, the company’s Desert Valley Hospital was sanctioned by the California Department of Public Health for improper care resulting in a patient’s death and its Garden Grove hospital was cited by the state after a patient was administered a lethal dose of a powerful sedative.
A record like that should have been reason alone for Daughters of Charity to reject Prime as a possible buyer. Daughters’ decision should have been easier knowing there was a serious alternative bid submitted by Blue Wolf. Now, the only way to protect access to health care in these communities is for Attorney General Kamala Harris to block the sale to Prime.
Dave Regan is president of SEIU-United Healthcare Workers West, a union of 150,000 health care workers in California.
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