Kaiser Permanente: No we don't back Prime's bid for Daughter's of Charity
After Prime's CEO told local paper the health giant backed its takeover plans for Daughter's, Kaiser steps in to set the record straight.
O'Connor Hospital, Daughter's of Charity Health Care, photo from Facebook
Despite what you might have heard, Kaiser Permanente is not backing Prime Healthcare’s bid to acquire California’s Daughters of Charity.
The confusion actually came out of a recent settlement over reimbursements between Prime Healthcare and Kaiser Health Plan that ended a seven-year dispute. After that agreement was announced, Prime founder and CEO Prem Reddy told the Gilroy Dispatch that Kaiser Permanente was supporting the acquisition of Daughters.
[Also: Battle rages over Daughters of Charity sale to Prime]
Reddy told the paper that Kaiser Permanente leaders were withdrawing their signature from a letter of opposition sent to California Attorney General Kamala Harris, who is in the midst of deciding whether to approve the acquisition of the distressed, six-hospital system.
It turns out Kaiser Permanente is not changing its stance on Prime’s proposed takeover of Daughters of Charity, which has hospitals from the Bay Area to Los Angeles.
“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,” the integrated health system said in a statement.
The Gilroy Dispatch later issued a correction.
Prime later acknowledged the mistake. "Prime wishes to now make clear that Kaiser Permanente agreed only to advise the Attorney General's Office it had entered into a hospital services agreement with Prime," the company said in a statement to the newspaper.
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The original dispute between Kaiser Permanente and Prime goes back to 2008, when Kaiser’s Foundation Health Plan and Prime sued each other, alleging contract breaches, unfair competition and other claims.
The two organizations last week came to a confidential agreement on Kaiser Health Plan reimbursement for Kaiser members treated at Prime Healthcare hospitals — but Kaiser Permanente is still among those opposing Prime’s takeover of the Daughters of Charity system.
Prime unveiled its plans to acquire Daughter of Charity last October, but the deal has to be approved by Harris, the attorney general, who previously blocked a Prime takeover and is under considerable pressure from the Service Employees International Union.
“Daughters’ historic mission of providing care to the needy and vulnerable doesn’t fit with Prime’s business model of revenue maximization and service elimination,” said Dave Regan, president of SEIU-United Healthcare Workers West.
Daughters of Charity CEO Robert Issai still stands by the decision to accept Prime’s bid, one of three made for the financially troubled system. “Prime Healthcare is not just the best choice, it is the only choice to keep our hospitals functioning,” Issai said. Along with a pledge for $150 million in capital improvements, Prime has agreed to continue paying pensions for some 17,000 union and non-union workers and retirees, honor union contracts, and has preserved the service missions at the four Catholic hospitals it already owns.
Although the California Nurses Association and a local registered nurses branch of the SEIU have endorsed the sale, the SEIU believes that Prime will likely take the Daughters of Charity through bankruptcy and implement service reductions, employee wage cuts or layoffs.
Harris’s decision on approving, rejecting or adding stipulations to the acquisition is due Feb. 20.
Her track record suggests she could go either way. In 2011, she blocked Prime’s proposed acquisition of a community hospital in Victorville — the longtime home of Prime founder Reddy. The cardiologist-turned-entrepreneur opened the nearby Desert Valley Hospital in 1994, sold it and then repurchased it in 2001 to use as the launching pad for Prime. The company has since overseen the acquisition of more than 20 hospitals and has plans for an initial public offering.
Twitter: @AnthonyBrino
