Prime Healthcare deal to buy six Roman Catholic hospitals collapses


Prime Healthcare Services Inc.’s proposed deal to buy six financially struggling Roman Catholic hospitals has collapsed, raising questions about how the nonprofit chain will keep its doors open.

The Ontario-based chain of 30 hospitals nationwide decided against the $843-million purchase of the hospitals, which include St. Vincent Medical Center and St. Francis Medical Center in L.A. County, according to a memo to employees from the hospitals’ chief executive.

Robert Issai, chief executive of Daughters of Charity Health System, wrote that Prime had found the conditions imposed by state Atty. Gen. Kamala Harris on operating the hospitals too onerous.


“Time is of the essence as we navigate the challenging operational and financial obstacles,” he wrote.

Issai said he was consulting with financial advisors and the hospital system’s board of directors about other options that would allow the six hospitals to continue operations.

On Feb. 20, Harris approved the proposed sale to Prime but said she would require the company to keep all of the hospitals open for 10 years. She also said the hospitals would have to provide the same level of charity care to poor patients as Daughters of Charity had.

Issai has previously said that the hospital chain, which specializes in providing care to the poor, was losing $10 million a month. In 2013, its board decided that selling the hospitals was the best way to avoid bankruptcy.

The other hospitals include four in Northern California: O’Connor Hospital in San Jose, Saint Louise Regional Hospital in Gilroy, Seton Medical Center in Daly City, and Seton Coastside in Moss Beach, near Half Moon Bay.

Prime Healthcare and Issai did not immediately respond to requests for comment.


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