Supporters, opponents clash over proposed sale of nonprofit hospitals

The proposed sale of six nonprofit California hospitals to a for-profit firm could lead to service and staff cuts and even closures, opponents of the deal said Monday at a public hearing in Lynwood. Meanwhile, backers of the deal said its failure could lead to shutdowns.

Hundreds attended the hearing over the proposed sale of St. Francis Medical Center and five other nonprofit California hospitals owned by Daughters of Charity to Ontario-based Prime Healthcare. It was the first in a series of hearings this week organized by the office of Attorney General Kamala Harris, who must approve the deal.

Both sides gathered early on Monday to chant, march and wave signs in support of or against the sale.  

Daughters of Charity says Prime Healthcare has offered the best options for keeping services going and staff on the job. Prime representatives said the company has agreed to keep the hospitals open for at least five years, to retain most staff and to continue existing services.

But critics are skeptical, making this one of the most contentious hospital acquisitions in recent years and pitting health care unions against one another.

The biggest critics are SEIU United Healthcare Workers West and United Nurses Associations of California/Union of Health Care Professionals. They are concerned about continued access for low-income residents and the security of jobs and pensions. 

St. Francis ICU Nurse Marilen Castanon, a United Nurses Associations of California member, is not convinced by the promises made by Prime’s owner to keep the hospital open. Her hospital admits 19,000 patients annually and the emergency department sees more than 70,00 each year.

"He is untrustworthy, he cuts services in the community and he doesn’t respect any contract with the labor," she said.

The California Nurses Association supports the sale.  

"I'm confident Prime is going to fulfill his promise and continue to serve the community like we always have," said CNA member Nella Mantayan, who has worked at St. Vincent Medical Center for 33 years.

Among the hundreds commenting at the hearing were executives at Daughters of Charity and Prime, elected officials, nurses and other hospital staff.

"We thought [the proposed sale] would go smoothly," said Mike Sarian, president of operations for Prime. "We’re maintaining all their hospitals, all their key services for five years, paying off their debt, assuming their pension obligation and assuming all CBA [collective bargaining agreements] contracts."

The deal is worth $843 million in cash and debt obligations, he said.

Other health providers in the area are watching closely. 

"The issue is making sure the safety net mission of St. Francis hospital remains," said Jim Mangia, president and CEO of St. John’s Well Child & Family Center. "I think that ultimately the best case scenario is if there is a buyer that would retain the non-profit hospital."

The Lynwood city council took an official stance against the sale, said Mayor Jose Luis Solache.

"We are concerned about the longer term relationship we are going to have with the hospital," he said. "There are no guarantees."

Critics pointed to Prime's purchase of Centinela Hospital several years ago, arguing that the company ended Medi-Cal contracts at the facility and closed critical wards. Prime's Sarian said those accusations are false.

Members of California's Democratic congressional delegation have also weighed in. A group of 18 sent a letter to Harris asking her to reject the deal, saying Prime is a "controversial for-profit system that has a history of unfair business practices," arguing that "patient care and healthcare worker rights will suffer at these hospitals" if the sale is approved.

The attorney general is expected to make a decision next month. Harris has rejected two other pending sales to Prime, including the sale of Victor Valley Community Hospital in 2011, which she said was not in the "public interest."

An outside review  stopped short of making a recommendation about the deal, although it recommended that Prime keep the hospitals open ten years, instead of five.

There will be public hearings the rest of the week regarding each of the Daughters of Charity hospitals, including one Tuesday at St. Vincent Medical Center in downtown L.A.

Correction: An earlier version of this story incorrectly identified Marilen Castanon’s union affiliation. KPCC regrets the error.