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Prime Healthcare to acquire St. Vincent, St. Francis medical centers

Prime Healthcare to acquire St. Vincent, St. Francis medical centers
Union leaders are protesting the sale of six hospitals to Prime Healthcare Services Inc. Above, workers speak out at St. Vincent Medical Center in August. (Brian van der Brug / Los Angeles Times))

Prime Healthcare Services Inc. has reached a deal to acquire six California hospitals, including St. Vincent and St. Francis medical centers in Los Angeles County, despite strong opposition from organized labor and many politicians statewide.

Under the deal announced Friday with the Daughters of Charity Health System, Prime said it will keep all six hospitals open and maintain their existing services, including emergency rooms and trauma centers, for at least five years.

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However, the sale is subject to approval from the California attorney general's office and opponents are gearing up to defeat Prime's bid.

The Service Employees International Union immediately denounced the deal, saying Prime puts profits ahead of patient care.

The union said it will air TV ads in Sacramento and San Francisco urging California Atty. Gen. Kamala Harris to reject the sale.

"It's disappointing and hard to understand how Daughters of Charity's current owners could turn their back on 100 years of serving the poor by selling to a company with Prime's history," said Dave Regan, president of SEIU-United Healthcare Workers West.

"We are not going to roll over and risk watching Prime Healthcare cut services, raise prices and lay off caregivers like they've done in so many other communities in California and other states," Regan added.

Looking to appease critics of the deal, Prime vowed Friday to provide quality medical care while protecting jobs and employee pensions.

Prime said it will spend $150 million on capital improvements over a three-year period and ";work to substantially protect 7,600 jobs" at the hospitals.

Ontario-based Prime said it would maintain all collective bargaining agreements in place and assume nearly $300 million in pension liabilities for current and retired workers. Other terms of the deal weren't immediately disclosed.

"We are committed to preserving these hospitals and continuing to deliver the highest quality patient care to the communities they serve," said Prem Reddy, chief executive of Prime Healthcare.

The sale includes St. Vincent Medical Center near downtown L.A. and St. Francis Medical Center in Lynwood.

Daughters of Charity, a nonprofit Catholic chain, is also selling four facilities in the Bay Area: O'Connor Hospital in San Jose, Saint Louise Regional Hospital in Gilroy, Seton Medical Center in Daly City and Seton Coastside in Moss Beach.

Robert Issai, chief executive of Daughters of Charity, said in a statement "we have confidence in Prime Healthcare and their dedication to furthering a mission that preserves and enhances healthcare delivery."

Daughters of Charity began seeking offers in January as the chain struggled financially with tens of millions of dollars in operating losses.

Prime operates 29 hospitals in California and eight other states. It has faced criticism over its billing practices and handling of patient privacy.

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The company has acknowledged that federal investigators have been looking into allegations of improper billing by its hospitals.

Prime said "a thorough review, like the multiple reviews in the past have shown, will demonstrate our hospitals follow all state and federal regulations and laws."

Twitter: @chadterhune

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