State Controller John Chiang Says Daughters Sale to Prime Would Erode Patient Care, be Detrimental to Communities

[Dec. 15, 2014] OAKLAND, Calif. – California Controller John Chiang has joined the unprecedented opposition to the controversial sale of Daughters of Charity Health System to Prime Healthcare, after sharing his strong concerns in a letter to California Attorney General Kamala Harris, who must approve or reject the deal before Feb. 12, 2015.

Chiang joins more than 18 members of the California Congressional delegation, 50 current or former state legislators, San Francisco Mayor Ed Lee, county and city officials, workers, doctors, nurses, community organizations, union members and others who are publicly opposed to the sale.

“As Treasurer-elect, I am concerned that Prime’s very low credit rating and its exposure to potential liabilities associated with existing litigation introduces a level of worrisome risk…” said Chiang in the letter, which cites the Attorney General’s prior investigations of Prime Healthcare. “I am also concerned about the potential erosion of quality patient care, the potential diminution of services available to the many communities Daughters currently serves and the significant economic ramifications to the healthcare workers…”

Daughters of Charity announced Oct. 10 that it chose Prime Healthcare as the lead bidder for the six-hospital, safety-net system and would negotiate with Prime exclusively. Concern lies with Prime Healthcare’s dismal record and business practices:

  • Prime admitted that it is under federal investigation for allegedly overbilling the federal government;
  • Prime paid $370,000 in federal and state fines 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;
  • 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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