Prime Healthcare backs out of deal with Daughter's of Charity in CA
Wednesday, March 18, 2015 at 01:55PM
MW Editor

Prime Healthcare, a for-profit health care network with hospitals across the country backed out of purchasing six financially struggling Roman Catholic Hospitals in California’s Central Valley. MergerWatch had been keeping an eye on this purchase in the hopes that it would lead to a return of reproductive and LGBTQ health services to the communities where those hospitals are located. The six hospitals being purchased are operated by the Daughters of Charity Health System and are required to follow the Ethical and Religious Directives for Catholic Health Care (ERDs) which limit the provision of reproductive health services like abortion, elective sterilization and contraception.

California law has a review mechanism that allows the state Attorney General to oversee hospital sales and mergers in order to ensure that the community’s needs are met and patients’ best interests are served. California’s Attorney General Kamala Harris had approved the deal but with stringent conditions on Prime to provide necessary health services for the next ten years. These included beginning to provide comprehensive reproductive health care without restrictions, preserving acute care and emergency services, providing charity care and not discriminating against lesbian, gay, or transgender patients.

As Michael Hiltzik explained in the LA Times, “Prime's business model has been based on cutting medical services except for those that turn a profit or are required by law. There's nothing wrong with that strategy, except when these practices leave residents in medically underserved communities with nowhere else to go for services they need. That's why public officials must make sure those communities aren't shortchanged.” But when faced with the requirement that the hospitals fulfill these conditions and provide necessary emergency and primary care to an economically disadvantaged and underserved region, Prime backed out of the deal.

While it remains to be seen what will happen to the struggling Daughters of Charity Health System and whether reproductive health services can be provided there,  it seems clear that California’s AG review process is doing its job to keep consumers protected from disadvantageous hospital mergers and acquisitions.

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