SEIU-UHW Says Petaluma Valley Board Violated Law, Must Drop Prime Healthcare as Possible Hospital Buyer

[Feb. 10, 2016] OAKLAND, Calif.Hospital workers called on the Petaluma Health Care District to drop one of the hospital’s potential buyers after the board violated state law by selecting a finalist that was never subjected to public hearings. They also raised the prospect of a lawsuit if the board fails to address the situation.

“Petaluma Valley Hospital is vital to our entire community and people have the right to know and weigh in on who might buy it,” said Abigail Barajas, a healthcare worker at Santa Rosa Community Health Centers. “The board blatantly violated state law by swapping one buyer for another without even notifying the public, let alone holding a hearing so we can know our tax dollars are being invested wisely.”

When the healthcare district announced in November 2015 that it was holding four public hearings on potential buyers, it listed one of the interested companies as Prime Healthcare Services, a for-profit entity based in Delaware that owns 38 hospitals across the country. The board selected Prime despite its controversial history and the fact that Moody’s rates the company’s credit at junk bond levels. However, after the hearings concluded, the board announced in January that one of the two finalists was Prime Healthcare Foundation, an entirely different not-for-profit entity headquartered in California whose name and operations had not been discussed during public hearings.

If the Petaluma board refuses to drop Prime Healthcare Foundation from consideration, hospital workers could file a lawsuit under the state’s Ralph M. Brown Act, which guarantees the public’s right to attend and participate in meetings of local legislative bodies and requires transparency in district board decisions. The board has 30 days to act on the workers’ request.

Even though they are separate entities, both Prime Healthcare Services and Prime Healthcare Foundation are run by Prem Reddy, whose history is tainted by dismal business practices that in 2011 resulted in the California Attorney General rejecting Prime’s attempt to buy a hospital in Victorville, Calif. Last year, Prime walked away at the last minute from the attempted purchase of the Daughters of Charity Health System rather than meet strict conditions the Attorney General placed on the sale to protect the hospitals and surrounding communities from Prime’s history of cutting staff and services to drive up profits.

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