Citing “unfair business practices” as their biggest concern, 18 U.S. Congress members from California urged the state’s Attorney General Kamala Harris to reject the sale of six hospitals in the Daughters of Charity Health System to Prime Healthcare Services. That includes Gilroy’s Saint Louise Regional Hospital.
The U.S. representatives joined a growing chorus of local officials opposing the sale to the for-profit health system, while a key union representing a portion of DCHS’ nearly 8,000 employees turned on its leadership by supporting the sale in recent days.
U.S. representatives Mike Honda (D-San Jose) and Zoe Lofgren (D-San Jose) spearheaded the effort, in which a Dec. 11 letter addressing their concerns over the sale to the controversial for-profit healthcare system was sent out to the attorney general’s office. The group asks Harris to reject the transaction.
“It is our belief that under Prime, patient care and healthcare worker rights will suffer at these hospitals,” the letter states.
The letter goes on to note that Prime’s history of “unfair business practices resulted in civil and criminal investigations by government agencies for allegedly overbilling Medicare as well as violations of patient confidentiality.” Furthermore, California’s need for additional safety net hospitals as a result of the expanded Medi-Cal services provided under the Affordable Care Act “is incompatible with Prime’s business model of minimizing the amount of care it delivers to low-income patients.”
The highly scrutinized DCHS sale to Prime has supporters in the California Nurses Association. Prime ensured the CNA it would maintain their full pension benefits in a one-year agreement, and promised to keep all six hospitals open for five years.
While the SEIU-United Healthcare Workers West has campaigned against the sale to Prime even before it was announced in early October, that union’s membership earlier this week bucked their leadership by supporting the transaction.
In a surprising twist, a growing number of SEIU-UHW members at the six DCHS hospitals have voluntarily signed petitions in support of the sale to Prime, according to a Dec. 15 press release from DCHS. One petition on change.org urging the Attorney General’s Office to approve the sale has received more than 19,000 signatures.
In petitions and letters sent directly to Harris’ office, SEIU members have urged her to support the sale to Prime in order to keep the hospitals open and preserve the jobs of union workers, the press release said.
“We disagree with union leadership in this matter and want to keep our jobs and pensions, which Prime promises to preserve,” one petition signed by SEIU members at Saint Louise Regional Hospital stated.
SEIU-UHW has 3,700 members employed at DCHS facilities and three Prime-owned hospitals in California. The Dec. 15 press release from DCHS did not say how many of these members have contradicted union leadership by supporting the sale to Prime.
Prime Healthcare founder, President and Chief Executive Officer Prem Reddy has stood firm that the hospital chain he founded will make $150 million in capital improvements at the DCHS facilities, protect 7,600 jobs and assume more than $300 million in pension guarantees for more than 17,000 union and non-union active and retired workers.
DCHS officials have also said the hospitals, including SLRH, are in danger of closing if the attorney general does not approve the sale to Prime, which they have said was the only viable bidder for the system since it went up for sale in January. The Dec. 15 release from DCHS notes that the six-hospital system is losing about $10 million per month.
“I don’t understand how a union leader could be against preserving jobs and pensions of his own members, the very people he is paid to represent,” said Robert Issai, president and CEO of DCHS. “(SEIU-UHW President) Dave Regan knows that the Daughters hospitals are in very real danger of closing or filing for bankruptcy should the sale to Prime be rejected by the attorney general, yet he continues to spout tired rhetoric and promote phantom buyers that don’t exist.”
The Dec. 11 letter from Honda, Lofgren and other lawmakers joins Santa Clara County officials in the chorus of concerns over the pending sale, which requires approval from the Attorney General’s Office and the Vatican before it becomes final. Under state law, the Attorney General’s Office has the authority to review the sale of a hospital if it’s a transfer from a non-profit institution to a for-profit organization.
In their letter, lawmakers opposed to the sale said Prime Healthcare Services has a history of cutting services, raising prices and laying off workers. They say that Prime’s “questionable history,” combined with the mission of Daughters hospitals to serve patients regardless of their financial ability to pay, raises doubts as to the sensibility of the sale.
Harris may reject the sale based on any factors found relevant, including whether the sale is in the public interest; whether it would create significant effects on the availability of health care services in the community; or whether the proposed use of the proceeds from the transaction is consistent with the charitable trust under which the hospitals have operated.
Harris’ office has blocked two of four potential sales of hospitals involving Prime Healthcare, including its attempt to purchase Victor Valley Community Hospital in Victorville in 2011.
The attorney general is given an initial 60-day review window on transactions and, in cases of multi-facility sales, Harris can opt for an additional 45-day extension. The Charitable Trusts Division, which focuses on nonprofits and charities, conducts the review process. In the last four years, the division has conducted 20 to 30 such reviews.
Harris’ office is expected to release reports on each of the six hospitals at the end of December.
The attorney general will then host two public meetings to gather community input, including one in Gilroy to discuss SLRH. That meeting is scheduled for 10 a.m. Jan. 8 in council chambers of City Hall, located at 7351 Rosanna St.
The California Attorney General will host a public meeting at 10 a.m. Jan. 8 in council chambers of City Hall, located at 7351 Rosanna Street, to gather community input on Saint Louise Regional Hospital as it relates to the pending sale.
