While county officials have made it clear that they disagree with the attorney general’s decision to approve the sale of Daughters of Charity Health System to Prime Healthcare, Morgan Hill mayor Steve Tate is in wait-and-see mode as the for-profit company decides whether to accept the stringent conditions tied to the $843 million acquisition.
“I’m going to wait to see how it unfolds, wait to see if Prime accepts the conditions, that’s question No. 1, and if they do, how they are going to be enforced,” Tate said. “And if they don’t, what’s the next step?”
Attorney General Kamala Harris’ approval of the sale with conditions came Feb. 20 after months of deliberations, research and community input meetings. The DCHS includes Saint Louise Regional Hospital in Gilroy, De Paul Medical Center in Morgan Hill, O’Connor Hospital in San Jose and four other medical facilities in California.
“I wasn’t really surprised,” said Tate of Harris’ decision. “It seemed to be like she needed to approve it because there weren’t that many other options, but she needed to put conditions on it. So, it wasn’t that big of a surprise.”
Supervisor Mike Wasserman has been unavailable for comment, although the county sent out a prepared statement shortly after Harris’ Feb. 20 announcement. The county submitted a bid to acquire SLRH and O’Connor Hospital, but was rejected from consideration by DCHS.
“The County of Santa Clara is disappointed with the Attorney General’s decision,” the county response reads. “Regardless of the conditions placed upon Prime Healthcare, the county believes that the decision jeopardizes the health of the county’s neediest and most vulnerable residents by reducing their access to critical medical services, and by placing undue hardship on the county’s existing healthcare facilities and services to the poor and disadvantaged.”
Prime officials, as well as those from DCHS, said they must carefully review all of the attached conditions, which include operating four of the DCHS facilities (SLRH among them) as acute care hospitals with emergency services and charity care for the next 10 years as well as continuing the Medi-Cal and Medicare programs for a decade.
“I agree with all of them,” Tate said. “I think (Harris’ decision) brought about many more questions than it did answers.”
Tate spoke with members of the community who have stake in the hospital sale and they were “universally convinced that (DCHS) had to be sold to Prime because it was the only option that would keep them employed.”
Among the 12 conditions, one solely focused on the hospital workers states that Prime must assume and guarantee all pension obligations covering approximately 17,000 current and retired employees. Prime agreed to such parameters with DCHS officials prior to the Harris decision, as well as to invest $150 million in capital improvement expenditures at the facilities over the next three years.
“(All the conditions) are fairly important because they all have to do with the health of our community,” Tate concluded.
See this related story for all the details on Harris’ Feb. 20 announcement, including the full list of conditions for Prime’s acquisition.
