Attorney General OK’s Sale of Daughters of Charity Hospitals

California Attorney General Kamala Harris approved the sale of six nonprofit Daughters of Charity Health System hospitals to a for-profit chain with austere conditions.

The decree has somewhat calmed a battle that divided powerful unions, both of which have claimed victory. The California Nurses Association/National Nurses United said that the sale could save the hospitals from going under. SEIU United Healthcare Workers West argued that Prime’s aim to profit comes at the expense of workers, but also supported Harris’ stipulations.

The Attorney General’s decision also drew criticism from Santa Clara County, which claims that the sale threatens the region’s most vulnerable residents by limiting access to critical medical help and potentially overwhelming local public hospitals. County officials say they will look for ways to acquire one or more of the hospitals to prevent Prime from taking over.

Per Harris’ terms of the sale, Prime Healthcare will run O’Connor Hospital, Saint Louise Regional Hospital, Seton Medical Center, St. Francis Medical Center, St. Vincent Medical Center and Seton Coastside. The deal, which she called the largest overseen by her office, demands that the buyer provide charity care “at historic levels” and reproductive care with no “restriction of limitation.” Prime must also invest $150 million on facility improvements, cover pensions of 17,000 active and retired workers and continue to treat Medi-Cal and Medicare patients for the next 10 years.

Prime Healthcare balked at the conditions, calling them “extensive … [and] unprecedented.”

According to opponents of the sale, including the county, Prime has a record of slashing services. And a day before Harris announced her conditional approval of the sale, a San Bernardino County Superior Court judge found Prime in contempt of 14 of 15 counts for needlessly admitting emergency room patients without notifying their personal doctors. By admitting patients instead of holding them for observation, Prime collected much higher reimbursement rates from insurers.

“This is just one more example to put on the massive pile of evidence that Prime Healthcare is unfit to purchase a hospital system like Daughters of Charity whose mission is to serve the community, especially low-income people,” SEIU-United Healthcare Workers West President Dave Regan said. “This is a company that simply is incapable of playing by any set of rules.”

Sen. Richard Pan (D-Sacramento), who was bankrolled by that same union in a close intraparty race last year, blasted Prime Healthcare for calling police on intoxicated patients. Pan has introduced a bill that would impose fines on hospitals that have severely drunk patients arrested rather than treated.

“I know it sounds incredible, but some hospitals in California—especially those in one particular hospital system—routinely call 9-1-1 and have patients with potentially lethal levels of alcohol in their systems taken to jail,” said Pan, who implored Harris to reject the Daughters of Charity deal.

Jennifer Wadsworth is the former news editor for San Jose Inside and Metro Silicon Valley. Follow her on Twitter at @jennwadsworth.


  1. > ” Prime must also invest $150 million on facility improvements, cover pensions of 17,000 active and retired workers and continue to treat Medi-Cal and Medicare patients for the next 10 years.

    > Prime Healthcare balked at the conditions, calling them “extensive … [and] unprecedented.”

    Well, yeah!

    This is really disgusting.

    Politicians screwing over the selfless and altruistic Daughters of Charity so that they can coerce a non-profit non government entity to provide below market healthcare AND ABORTIONS (reproductive care with no “restriction of limitation”) to their underclass political base.

    Stinks to high heaven.

    Maybe the Daughters of Charity should remind themselves of their vows of poverty, say screw the money, and walk away from the train wreck.

    Let Kamala Harris, Senator Pan, and Jerry Brown change bed pans for diseased drunks.

  2. Terrible decision…I am angry she did not listen to county concerns….and take Prime’s history of mis-management, or, should I say, dis-management.

    Prime spent millions in its campaign….ads everywhere…buying off DOA board and nurses union…..check their bank accounts.

  3. Poor defenseless Daughters of Charity…my A##! The nuns ran off with over 200 million dollars of pension money over seven years ago. I cannot wait for the daughters and Issai to have to answer for that later this week…I wonder…did they report that income to the IRS? The DOCHS failed because they cannot count…how many more times are we going to hear, “We only have 14 days of cash left?” We heard this January 05, 06, 07, 08, and 09…and now again…give me a break. Perhaps if Issai did not give himself a 200% increase in pay there would be a little spending money to go around. As far as this sale to Prime goes…OPEN YOUR EYES PEOPLE…Prime had no intention of honoring any condition in the first place…he only wanted St. Francis because St. Francis makes money…the other hospitals were bleeding the system for over 10 years. Don’t you think he would have jumped on the deal the minute the AG offered it to him if he was so sincere? But now that everything is in writing and with extreme and necessary stipulations…he has to think about it. I thought Dr. Reddy was going to keep all the hospitals open anyway? So what is the problem? Could it be he doesn’t want to have to prove to the AG that he is compliant for 11 years? He has never been compliant before…Could it be he had no intention of keeping anything up and running like he promised? He would have gutted the hospitals, replaced the good managers with his cronies…and pushed out patients who normally are seen in these hospitals. I opposed this sale from the beginning because I saw through all the lies from the DOCHS, Issai, and Prime. Prime is no savior and never was…I look forward to the very minute Prime walks away, is told to forget it, and watches another rival company take over and make the system flourish

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