House members urge AG to nix hospital sale

Rep. Mike Honda and Rep. Zoe Lofgren led 16 other California House members Thursday in urging California Attorney General Kamala Harris to reject the sale of six Daughters of Charity Health System hospitals to a for-profit company they say has a history of unfair business practices.

Honda and Lofgren, both D-San Jose, cited concerns that under Prime Healthcare Services, “patient care and healthcare worker rights will suffer at these hospitals.”

Los Altos Hills-based Daughters of Charity, a Catholic system, wants to sell Daly City’s Seton Medical Center and Seton Coastside satellite campus, O’Conner Hospital in San Jose, Gilroy’s Saint Louise Regional Hospital and two Los Angeles-area medical centers to Ontario, Calif.-based Prime Healthcare, a $2.5 billion system with 29 hospitals and 4,700 beds in nine states.

Harris may reject the sale based on any factors found relevant, including: whether the sale is in the public interest; whether it would create significant effects on the availability of health care services in the community; or whether the proposed use of the proceeds from the transaction is consistent with the charitable trust under which the hospitals have operated.

“Our biggest concern is Prime’s history of unfair business practices that have resulted in civil and criminal investigations by government agencies for allegedly overbilling Medicare as well as violations of patient confidentiality,” the lawmakers wrote in their letter to Harris. “The National Labor Relations Board has issued charges against Prime for such illegal practices as unilaterally cutting employee health insurance plans, interrogating and intimidating employees who are supportive of their union, bad faith bargaining and bribing employees to vote to decertify the union. Class action and wage and hour violation lawsuits have been filed against Prime at 11 of their 15 California hospitals.”

That, combined with the mission of these hospitals to serve the most-needy residents raises substantial doubts as to the sensibility of this sale, they say.

Others House members signing the letter included Sam Farr, D-Carmel; Anna Eshoo, D-Palo Alto; Jackie Speier, D-San Mateo; Barbara Lee, D-Oakland; Mike Thompson, D-Napa; and George Miller, D-Martinez.

UPDATE @ 10:07 FRIDAY: It seems these House members have taken a side in a battle between two unions. SEIU-United Healthcare Workers opposes letting Daughters of Charity sell to Prime Healthcare, while the California Nurses Association/National Nurses United supports the deal.

CNA/NNU in October reached an agreement with Prime Healthcare including a pledge to keep open for at least five years O’Connor in San Jose, Saint Louise Regional Hospital in Gilroy, Seton Medical Center in Daly City, and St. Vincent Medical Center in Los Angeles. Prime also promised it has no intention of reducing patient services or taking actions that would put the services at risk, as well as respecting collective bargaining rights, jobs, pension rights and existing labor standards at the hospitals covered by the pact.

Another potential buyer, private equity firm Blue Wolf Capital, refused to commit to keeping the hospitals open, protecting patient services, or honoring employee contracts or existing labor standards, CNA/NNU says.

And so CNA/NNU nurses, joined by nuns associated with Daughters of Charity, will hold a vigil Friday afternoon outside O’Connor Hospital “to urge state officials to take the steps needed to preserve the hospitals for public safety. CNA co-president Zenei Cortez said those opposing the sale “without offering an alternative that would protect our patients and our communities are putting everyone at risk. Nurses will not be silent in the face of this emergency.”

Josh Richman

Josh Richman covers state and national politics for the Bay Area News Group. A New York City native, he earned a bachelor’s degree in journalism from the University of Missouri and reported for the Express-Times of Easton, Pa. for five years before coming to the Oakland Tribune and ANG Newspapers in 1997. He is a frequent guest on KQED Channel 9’s “This Week in Northern California;” a proud father; an Eagle Scout; a somewhat skilled player of low-stakes poker; a rather good cook; a firm believer in the use of semicolons; and an unabashed political junkie who will never, EVER seek elected office.