It was squeeze-in-only room at Gilroy City Hall as an overflow crowd of more than 100 people squared off over the proposed sale of Saint Louise Regional Hospital and DePaul Medical Center in Morgan Hill. Dozens waited hours for a two-minute chance to give their two-cents on an issue that has divided communities and a union.
With a representative of Attorney General Kamala Harris listening and a court reporter taking down every word, speaker after speaker at the Jan. 8 session laid out visions of the magic or misery that sale of South County’s two non-profit medical facilities and four others to a for-profit company would mean.
Harris, who this week announced plans to seek the U.S. Senate seat being vacated by Sen. Barbara Boxer, can reject the sale, allow it to go forward or approve it with conditions designed to assure uninterrupted access to medical care for years, including to the poor, which was emphasized by a consultant to the attorney general on the matter.
Harris must decide by Feb. 6 if the Daughters of Charity Health System can sell their six facilities—which include Saint Louise, De Paul, O’Connor Hospital in San Jose and three others—to Prime Healthcare.
“If the hospital does not maintain its current level of healthcare services, severe accessibility and availability issues would be created for the residents of the communities served by the hospital,” said Phil Dalton, CEO of MDS Consulting, at the public session hosted by Harris’ office.
“As a result of our findings, we’ve made recommendations that if the attorney general approves this transaction, it could mitigate negative impacts on healthcare availability and accessibility.”
Dalton recommended that SLRH continue operating as an acute-care hospital and provide round-the-clock emergency services for at least 10 years after the sale. He also recommended that Prime operate DePaul as an urgent care facility for at least five years.
Sale supporters who addressed Harris’ representative, Deputy Attorney General Wendi Horwitz—many of them Saint Louise and DePaul medical and support staff—argued the facilities will close if the deal falls though. They cited Prime as the only bidder equipped to keep them open.
“Prime is the only company that has offered to keep our jobs, keep our hospital open, keep our pensions and take care of the community,” said Laquita Centeno, a Saint Louise nurse for 25 years. “We have to have a hospital. We’re a family and Prime is the only one that wants the whole family.”
Opponents, led by the Service Employees International Union for United Healthcare Workers, argued in support of a different buyer and suggested jobs would be cut and medical care to the poor would suffer under for-profit management.
“What is being said is that we have a choice between Prime and closure. That’s a flat-out falsehood. There is a better choice. That choice is Blue Wolf,” said Marc Quarles, a Saint Louise ultrasound technician in arguing for sale to the New York-based private equity firm, Blue Wolf.
The California Nurses Association, which as an organization stands in Prime’s corner, is at odds with the SEIU-UHW. But within that service employee union, factions are splintering.
Centeno, a union steward for the SEIU-UHW, held back tears as she presented representatives from the attorney general’s office with a petition covered in 100 signatures from her colleagues who, like her, are bucking the union’s leadership and backing the for-profit buyer.
German Leyva, an SEIU-UHW union member and SLRH employee for 10 years, agreed with her sentiments.
“The union doesn’t speak for me or my co-workers. We’re not a part of it by choice; we have a ransom we have to pay,” said SEIU-UHW union member and SLRH employee German Leyva, referring to his union dues.
This week, an attorney working for the SEIU filed charges with the National Labor Relations Board against the Daughters of Charity alleging the nonprofit Catholic organization intimidated, harassed and coerced employees into supporting Prime.
The Daughters of Charity on Oct. 10, 2014 named Ontario, Calif.-based Prime Healthcare as their preferred bidder. SLRH and O’Connor President and CEO James Dover has said the other main bidders, Santa Clara County and Blue Wolf, didn’t come close to Prime’s offer.
Santa Clara County submitted a bid to purchase two of the six facilities—O’Connor Hospital and SLRH—but would have required DCHS go bankrupt as a condition of the offer. A majority of the county’s supervisors are against the sale to Prime.
Blue Wolf has never operated a hospital and declined to put money down towards the transaction, according to Dover.
“Their (the county’s) opposition is completely misguided…they’re not looking out for the constituents,” Dover said. “For them to say ‘you have to go through bankruptcy’ was completely inappropriate.”
The county offered no guarantees about hiring existing employees, Dover said, and county employees would get first shot Saint Louise jobs over current employees.
“Their bid was so inept they didn’t make the final round,” he added.
Being sale is being forced by what the Daughters of Charity say are their dire financial straits. Other DCHS hospitals have chipped in $35 million over the past three years to keep Saint Louise open, they say.
The California Nurses Association supports the sale to Prime, but the Service Employees International Union for United Healthcare Workers—as an organization—is fighting the for-profit takeover.
“It’s really going to change the way our community runs if Prime gets it. It’s about what they could do,” said Gregory Gaboni, a surgical assistant at SLRH.
“They (Prime) can paint a rosy picture but when the rubber hits the road, the way they can make money right off the bat is by reducing staff…maybe Prime saw the light after taking over other Catholic divisions and they’ll be good to everybody, but I can’t trust that,” Gaboni said.
Dr. Musa Bakri, a physician in Gilroy for more than 35 years, argued that Prime is the most experienced hospital operator among bidders. Given the Daughters of Charity’s finances, he said, going with anyone but Prime could lead to medical decisions being made by financial analysts, not physicians.
“When you have a critically bleeding patient, you need a seasoned surgeon to take over—not a novice operator and certainly not a dabbler,” he said. “You should not underestimate the differences in philosophies and attitudes of practicing physicians with spreadsheet scanners.”
Gilroy Mayor Don Gage urged the attorney general’s office to set politics aside and to what’s right for the wellbeing of the 100,000 residents of south Santa Clara County who rely on Saint Louise and DePaul.
“This decision should not be made by a third-party and should not be a political decision. This decision should be made on what is best for the people.”
“They (Prime officials) can paint a rosy picture but when the rubber hits the road, the way they can make money right off the bat is by reducing staff…maybe Prime saw the light after taking over other Catholic divisions and they’ll be good to everybody, but I can’t trust that.”
-Gregory Gaboni, a surgical assistant at Saint Louise Regional Hospital
“Prime is the only company that has offered to keep our jobs, keep our hospital open, keep our pensions and take care of the community. We have to have a hospital. We’re a family and Prime is the only one that wants the whole family.”
-Laquita Centeno, a nurse at Saint Louise Regional Hospital
