You’d think hospital employees would have been pleased and relieved when the Daughters of Charity Health System, which is swooning financially, announced earlier this month that it had found a buyer that promised to keep all six of its hospitals open for at least five years, maintain the employees’ pensions and invest $150 million in the hospitals.
But if you thought that, you’d be wrong. At least, the health care workers chapter of the Service Employees International Union has vowed to fight the merger. It’s mounting a PR campaign including TV ads in Sacramento aimed at convincing Attorney General Kamala Harris to reject the proposed hospital buyout. And given Harris’ political allegiance to unions, you can imagine there’s a good chance she will kill this seemingly great deal. (For some reason, the attorney general gets to decide whether a charity can be sold in this state.)
And that would be bad, indeed. The chief executive of the Daughters of Charity has said the hospitals are losing $10 million a month and are in danger of shutting down. The non-profit Catholic organization operates St. Vincent Medical Center near downtown Los Angeles and St. Francis Medical Center in Lynwood along with four hospitals in the Bay Area. They generally serve the poor.
But the chain found a savior in Prime Healthcare Services of Ontario. Not only did Prime vow to keep the hospitals open and invest heavily in them, but it pledged to “work to substantially protect 7,600 jobs,” maintain collective-bargaining agreements in place, and assume about $300 million in pension liabilities for current and retired workers.
But rather than hail Prime as a savior, the union is demonizing it as something just short of an Ebola carrier.
Why? For the record, the SEIU points out that Prime is under investigation for allegedly overbilling Medicare. And, in a statement, it says “workers” at Prime and Daughters of Charity “believe” Prime has a “record of ignoring community needs.”
Several times on its website, the union complains that Prime is on a “quest to maximize profits.” It alleges that “to maximize profits, Prime Healthcare has a history of buying struggling hospitals and reducing patient services, raising prices, laying off large numbers of staff and engaging in unfair labor practices.”
But one suspects that the real reason for this contempt is that Prime is not particularly union friendly. As a result, the union apparently would rather see the Daughters of Charity hospital chain shrink or fold completely rather than have it stay open and be run efficiently – and profitably – by a not-so-union-friendly operator. In other words, the SEIU is on a quest to maximize union dues.
Interestingly, the California Nurses Association, which had been in SEIU’s camp in this battle, switched sides. It got an agreement from Prime in which Prime vowed to do the most important thing: keep the hospitals going.
“Prime Healthcare represents the best option to preserve vital health care services in our community,” Maria Canonizado, a nurse at one of the charity’s hospitals in the Bay Area, said in the association’s statement on the issue.
The association’s statement pointed out that Prime agreed to keep all the hospitals operating for at least five years, maintain pension promises made to current and future retirees, and it “committed that it has no intention of reducing services.” What’s more, Prime made assurances to respect collective-bargaining rights and “maintain labor standards.”
The nurses got it right. The important thing is not that the SEIU get more union dues but that the hospitals stay open, serve the needy and keep workers employed.
And, by the way, if the new owner is able to maximize profits, that means the hospitals can continue to operate and perhaps expand and deliver better services in the future.
Charles Crumpley is editor of the Business Journal. He can be reached at email@example.com.
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