Hospital Sale Takes Bizarre Turn as Prime Healthcare Erroneously Claims Kaiser Supports Its Purchase of Daughters of Charity

[Feb. 10, 2015] OAKLAND, Calif. – In a bizarre announcement, Prime Healthcare said Monday that Kaiser Permanente was now supporting its purchase of Daughters of Charity Health System, a claim that Kaiser has unequivocally denied.

Prime and Kaiser reached an agreement Monday to settle various lawsuits between them through arbitration. But Prem Reddy, Prime’s founder, president and CEO, then spoke to the Gilroy Dispatch and convinced it to run a story saying that Kaiser had also agreed to support Prime’s acquisition of Daughters of Charity Health System and was sending a letter to that effect to Attorney General Kamala Harris, claims that are false.

In a statement posted on its website, Kaiser said, “Contrary to erroneous media reports and erroneous statements by Prime, Kaiser Permanente has not agreed to support Prime’s acquisition of the Daughters of Charity hospitals and has not sent a letter of support to the Attorney General.”

Prime Healthcare is trying to acquire Daughters of Charity Health System and its six, safety-net hospitals in California. The sale requires a review by Harris, who must approve or reject the deal by Feb. 20. Healthcare workers have urged her to block the sale because Prime is a bad fit to continue the hospitals’ mission.

Dave Regan, president of SEIU-United Healthcare Workers West, said Reddy’s false announcement is one more reason the company can’t be relied on to live up to its promises to the community.

“This is yet another example of Prime trying to mislead the public,” he said. “Prime simply cannot tell the truth, and Mr. Reddy could not have done anything more to demonstrate why he can’t be trusted, on this issue or his pledge to continue the community mission of Daughters of Charity hospitals.”

On Monday, the Dispatch reported erroneously that “Healthcare giant Kaiser Permanente has agreed to retract its official opposition to the sale of the Daughters of Charity Health System to for-profit Prime Healthcare, according to Dr. Prem Reddy, founder and president of Prime.”

The newspaper, which has strongly supported the sale and harshly criticized those who are in opposition, further wrote, “Kaiser will now send a letter of support for the sale to California Attorney General Harris,” a statement that is also incorrect. The newspaper printed Reddy’s assertions without getting confirmation from Kaiser, writing, “A representative for Kaiser could not be reached for comment on the announcement.”

Opponents of the sale include State Controller John Chiang, 18 members of the California Congressional delegation, 62 current or former state legislators, San Francisco Mayor Ed Lee, a majority of the boards of supervisors in both Los Angeles and Santa Clara Counties, and city elected officials, doctors, nurses, community organizations, and labor unions representing two million workers.

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