Prime is a poor choice to take over Saint Louise
Published in the December 10-23, 2014 issue of Morgan Hill Life
By Dave Regan
Dave Regan
When the owner of Saint Louise Regional Hospital in Gilroy announced two months ago it selected Prime Healthcare to buy the facility, most people were shocked. Prime Healthcare is a national hospital chain that takes over struggling hospitals and then eliminates services, increases prices, and lays off workers — moves that undermine community healthcare services, especially for the poor. It is under federal investigation for allegedly fraudulent billing of Medicare for tens of millions of dollars.
By choosing Prime Healthcare, the Daughters of Charity Health System has put Saint Louise and five other hospitals in California that are part of the sale at risk of bankruptcy.
That’s because the six hospitals are losing $10 million a month, and many observers believe California Attorney General Kamala Harris will reject the sale based on the strong opposition by community organizations, the San Jose Mercury News, Santa Clara County Executive Jeff Smith and 46 current and former state legislators such as Sen. Bill Monning (D-Carmel) and Assemblymember Luis Alejo (D-Salinas). Never in California’s history has there been this much public opposition to the sale of a nonprofit hospital.
Prime’s business model runs counter to the Daughters of Charity’s 100-year mission of caring for the most vulnerable residents in our community. Most galling is that the sale provides at least an $11 million severance package for Daughters’ top executives – the same executives who have been driving the company into the ground — and millions more in fees to the investment bank handling the transaction.
In addition, just days before the announced sale to Prime, Daughters canceled the health insurance contract for 100,000 low-income children and adults in Santa Clara County beginning Jan. 1, 2015. The action is designed to boost profits and almost certainly came at the request of Prime, which did the same after agreeing to buy a hospital in New Jersey in 2013.
But it didn’t have to come to this. Other companies submitted bids to buy the Daughters of Charity, offers that committed more money to improving patient care and hospital facilities and protecting workers’ jobs and pensions. It’s anyone’s guess why Daughters didn’t select one of those bids, especially since those companies do not carry Prime’s political and legal baggage.
The Morgan Hill and South Valley community — and the five others with Daughters-owned hospitals — deserve better. They need hospitals that will continue caring for the poor, stay open for years to come, and put the needs of the community ahead of its own profits.
Dave Regan is president of the 150,000-member Service Employees International Union — United Healthcare Workers West, the largest union of hospital, nursing home and home care workers in the western United States. He wrote this column for Morgan Hill Life.
