Hospitals in crisis mode
Tcrisis faced by the Daughters of Charity Health System appeared to be solved last year when Prime Healthcare Services of Ontario agreed to buy the chain and keep its six hospitals, including St. Francis Medical Center of Lynwood, open for at least five years. On Tuesday, however, Prime backed out of the deal, saying state Atty. Gen. Kamala D. Harris had gone too far in requiring a 10-year commitment to maintain most of the hospitals and their services. Now, everyone involved needs to focus on one thing: keeping the hospitals, and particularly the trauma centers that four of them operate, open for the long term.
That should have been the focus all along, but at least some of the players seemed more invested in the rivalry between two hospital worker unions or in the chance to cherrypick hospitals from the Daughters chain. Others took a withering view of Prime’s business practices and pressed Harris to impose rigid conditions on the deal, without regard to whether they would force the hospitals to be operated at a loss. And Prime itself may have been distracted by concerns that Harris’ 10-year mandate would set a bad precedent for its acquisitions in other states.
Daughters’ financial picture has improved in recent months, thanks in no small measure to insurers agreeing to pay the chain more for the care provided. Nevertheless, the chain still needs to find a buyer, because it has made a persuasive case that it’s losing too much money to continue as the hospitals’ operator. Would-be rescuers for some or all the hospitals emerged as soon as Prime exited, but the situation is complicated by pension contracts that impose a crushing penalty if the four Bay Area hospitals are sold to different buyers. Any buyers would also have to win Harris’ blessing. Although the conditions she proposed for Prime reflect the needs in the communities served, they’re meaningless if no one will accept them. She should remain open to buyers who would meet some of those needs through facilities and services not supplied by Daughters.
The willingness of Prime, a for-profit corporation, to take over all six Daughters hospitals and continue their mission of caring for low-income Californians is evidence enough that these facilities can be turned around. County health officials should work with Daughters and its suitors to explore creative approaches to delivering the services their communities need, including partnerships with other hospitals and clinics. Meanwhile, workers, managers, health insurers and elected officials should rally behind the common goal of keeping the hospitals open and delivering the services their communities can’t live without.