New Research Shows Prime Healthcare Repeatedly Misled Communities with Struggling Hospitals

[Nov. 10, 2014] OAKLAND, Calif. – Healthcare workers shared new information today showing Prime Healthcare has repeatedly misled communities with struggling hospitals by passing off $263 million in debt to taxpayers, canceling health insurance plans on patients, and eliminating hospital services it vowed to keep open. The company’s record casts doubt on recent promises it made to purchase six community hospitals in California owned by Daughters of Charity Health System.

“I think everyone involved in this sale would like to take Prime Healthcare at its word, but that’s impossible when you look at the company’s record of breaking its promises and leaving communities in the lurch,” said Dave Regan, president of SEIU-United Healthcare Workers West (SEIU-UHW). “We don’t want to see that pattern repeated with the Daughters of Charity because there’s too much at stake with its 800,000 annual patient visits and the essential role these hospitals play in their communities.”

SEIU-UHW found the following examples of Prime misleading communities across the country:

  • In 2013, when Prime announced plans to buy St. Michael’s Medical Center in Newark, N.J., it offered $65 million. However, 15 months later Prime dropped its offer to $43 million. Despite saying it was “committed to the healthcare needs of Newark,” Prime refused to assume the hospital’s $233 million in state-backed loans.
  • After Prime Healthcare bought Knapp Medical Center in Weslaco, Texas in 2013, the City of Weslaco indicated the company purchased the hospital by grossly undervaluing it. The city manager said: “…we were left holding the bag on all the debt. We got bamboozled, and that’s putting it mildly.” The city is now suing Prime Healthcare.

The research undermines Prime’s Oct. 10 announcement that it would purchase the Daughters of Charity Health System and maintain existing services for five years, “substantially” protect 7,600 jobs and assume nearly $300 million in pension obligations.

On Oct. 29, Prime Healthcare submitted its application to buy the six hospitals to California Attorney General Kamala Harris, who must approve the sale within 105 days. More than 50 elected officials, community organizations, and labor unions have urged the attorney general to block the sale because of Prime’s dismal business practices:

  • Prime admitted that it is under federal investigation for allegedly overbilling the federal government.
  • Prime paid a $275,000 fine after deliberately violating a patient’s privacy by sharing her records with journalists and 800 employees.
  • A group of doctors in San Bernardino County sued Prime Healthcare last year when the company denied them access to their own patients.
  • In addition, the company’s Desert Valley Hospital was sanctioned by the California Department of Public Health for improper care resulting in a patient’s death.
  • And Prime’s Garden Grove hospital was cited by the State of California after a patient was administered a lethal dose of a powerful sedative.

Daughters of Charity owns Seton Medical Center, Daly City; Seton Coastside, Moss Beach; O’Connor Hospital, San Jose; Saint Louise Regional Hospital, Gilroy; St. Vincent Medical Center, Los Angeles; and St. Francis Medical Center, Lynwood.

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