California AG approves Prime deal, but with many conditions

California Attorney General Kamala Harris has approved Prime Healthcare Services' plan to acquire the Daughters of Charity healthcare system, but it's unclear whether the organization will finalize the $843 million deal.

The conditions Harris has attached to the deal has given officials with the for-profit Prime enough pause that they are reviewing them in depth prior to finalizing any offer, according to the Los Angeles Times. 

Among the conditions Harris has imposed:

  • Prime must keep the six Daughters of Charity facilities open for at least the next 10 years, and maintain the levels of specialty servies and charity care that had been provided under the current regime, with the latter adjusted for inflation.
  • It must keep governmental healthcare services contracts in place.
  • Prime must also keep outpatient clinics operated by St. Francis Medical Center in Lynwood open for at least five years. 
  • As for employee obligations, Prime must also guarantee pensions and benefits moving forward.

"We will do a careful analysis and hope to reach a decision within a week," Kavitha Reddy Bhatia, M.D., Prime's vice president of clinical transformation, told the Los Angeles Times. "We very much remain committed to the future success of these hospitals."

Prime has come under fire for some of its business practices, and the deal drew more attention than other transactions. It has also split the state's labor unions.

But the Service Employees International Union-United Healthcare Workers West, which had objected to Prime acquiring the hospitals, appears to support the conditions.

"What we now have is an unprecedented, sweeping list of 70-plus pages of conditions that, if accepted and implemented, will go an awful long way in protecting patients and protecting communities," SEIU-UHW President Dave Regan told the San Francisco Chronicle.

Daughters of Charity, which operates hospitals in both the Los Angeles and San Jose areas, said it has been losing $10 million a month and would likely file for bankruptcy and cut services if it can't reach a deal.

To learn more:
- read the Los Angeles Times article 
- check out the San Francisco Chronicle article
- here's the attorney general's report (.pdf)