Proposed sale of Lynwood hospital to Prime Healthcare debated

St. Francis Medical Center is one of six Catholic nonprofit hospitals that Prime Healthcare has agreed to buy

Hundreds of health professionals engaged in a spirited debate Monday about the proposed sale of a nonprofit Lynwood hospital to a for-profit hospital company in Ontario.

St. Francis Medical Center is one of six struggling Roman Catholic nonprofit hospitals that Prime Healthcare Services has agreed to buy for about $843 million in cash and assumed liabilities.

Because Prime Healthcare intends to convert the Daughters of Charity hospitals to for-profit status, the sale requires the approval of California Atty. Gen. Kamala D. Harris.

Harris' staff hosted a public hearing Monday in Lynwood to hear public feedback about the proposed sale of St. Francis. The hearing is one of six scheduled for this week in Southern and Northern California. Harris is expected to make a decision about the sale by early February.

Opponents urged Harris to reject the sale, saying Prime Healthcare places too big of an emphasis on profit and the sale would diminish the services that the Catholic hospitals provided to their primarily lower-income clientele. They also noted that the Justice Department is investigating Prime for alleged billing fraud.

Supporters of the sale note Prime's history of rescuing struggling hospitals by reducing costs and increasing revenues, largely through tough negotiations with insurers. Prime owns 29 hospitals in California and eight other states.

Prime Healthcare Chief Executive Dr. Prem Reddy has vowed to keep the hospitals open for at least five years and retain all services, including emergency rooms. He also said he would continue to provide care to patients who are unable to pay for services.

Dr. Clayton Kazan, head of emergency care at St. Francis, was one of several of the hospital's doctors who advocated the sale to Prime at Monday's hearing. "Prime represents our lifeline," he said. "Having never closed a hospital and never closed an emergency department, Prime represents our best hope."

Scott Byington, president of the St. Francis Registered Nurses Assn., said he thinks that Prime will reduce services provided to those people unable to pay. "These patients will not be able to go to that hospital because it's a for-profit institution," he said.

Opponents of the sale wore blue T-shirts that said, "There is an alternative," a reference to a competing offer to buy the hospitals from private equity firm Blue Wolf Capital.

Kimberly Davis, who works in admissions at one of Prime's hospitals in Garden Grove, said she opposes the sale because "I have seen how Prime operates and it is not good." She said the company has canceled contracts with insurance companies and violated patient privacy by releasing a patient's medical records to the news media.

Robert Issai, chief executive of Daughters of Charity, said the six Catholic hospitals probably would be forced into bankruptcy if Harris rejects the sale. Blue Wolf's offer was not feasible because the firm offered to manage the hospitals without promising to buy them, he said. "It was crystal clear that Prime was the best choice."

An independent consultant who reviewed the proposed sale for Harris had recommended that Prime be required to keep the hospitals open for at least 10 years. Reddy said that he would agree.

In addition to St. Francis, the Daughters of Charity hospitals include: St. Vincent Medical Center near in downtown Los Angeles, O'Connor Hospital in San Jose, Saint Louise Regional Hospital in Gilroy, Seton Medical Center in Daly City and Seton Coastside Medical Center in Moss Beach, north of Half Moon Bay.

stuart.pfeifer@latimes.com

Twitter: @spfeifer22

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