California Attorney General Xavier Becerra has given his conditional approval to the sale of St. Francis Medical Center in Lynwood to Prime Healthcare.
The announcement comes about a week after a health care workers union filed a formal objection with Becerra — whose office must approve the sale — calling for him to reject the offer, saying the sale is “not in the public interest” and is likely to have a “negative impact on the availability and accessibility of health care in the community.”
Becerra said his approval seeks to “protect access to care for the Los Angeles communities served” by St. Francis.
Prime Healthcare “will continue to collaborate with the Attorney General’s Office while we examine the recommended conditions and work to finalize the sale,” said Dr. Sunny Bhatia, CEO, Region I and Chief Medical Officer of Prime Healthcare.
“St. Francis’ mission is especially critical during this pandemic and Prime has already started investments that will optimize patient care at St. Francis,” Bhatia said.
“Receiving conditional approval is an important step in ensuring Prime is able to preserve the St. Francis mission for the benefit of associates, members of the medical staff and most importantly the patients and Southeast Los Angeles community that has relied on St. Francis for 75 years,” Verity Health CEO Rich Adcock said Saturday.
Service Employees International Union-United Healthcare Workers West is calling on Verity Health System, the current owner of St. Francis, to find a new purchaser for the 384-bed general acute care hospital that Prime Healthcare agreed to acquire for about $350 million, including a $200 million base price and $15 million in payroll and benefits for staff.
SEIU-UHW representative Steve Trossman alleged that even with the conditions Becerra attached to the sale, including maintaining or improving care in all areas of the hospital, “we do not think a hospital chain with Prime Healthcare’s record … is the right buyer for this critical safety net hospital that serves 85,000 patients a year and has one of the busiest emergency trauma centers in Los Angeles County.”
Prime Healthcare said on July 7 that while it cannot comment on pending litigation or regulatory matters, the company is “committed to continuing every one of St. Francis’ services, preserving charity care, maintaining community benefit programs, investing millions in capital and ensuring St. Francis is able to continue and strengthen its 75-year legacy and serve the best interests of patients, the community, and the public.”
The company indicated that the union’s objection to the proposed sale stemmed from obstacles in reaching an employment contract with the hospital.
Trossman countered that Prime “is simply the wrong buyer for this hospital, and a sale to Prime could rip a hole in L.A. County’s health care system at a time when we need it to be at its best.”
Becerra, in his conditional approval letter, wrote that the California Department of Justice “has a responsibility to the families who live around and rely on St. Francis Medical Center. The COVID-19 public health crisis has brought home the importance of having access to lifesaving hospital care nearby in our communities.”
He said the conditions the DOJ attached to the proposed sale are focused “on maintaining or improving care and services at the hospital — from treatment for COVID-19 to cancer and emergency care.”
“No change in ownership, no bankruptcy filing can be allowed to diminish that priority,” according to Becerra. “St. Francis Medical Center is not just an asset, it is an indispensable neighbor, it is the workers who serve the patients, and the doctors who save lives. We conditionally approve this sale to keep it that way.”
SEIU-UHW contends that Prime has a history of allegations involving Medicare fraud, unnecessary hospitalizations, purposely misdiagnosing patients, and eliminating essential services like cancer and maternity.
“Prime’s shocking history of deceit, fraud and repeated elimination of health services that patients depend on is simply out of step with owning a hospital like St. Francis, which is a lifeline to the people of Lynwood and surrounding communities,” alleged Mauricio Medina, a certified nursing assistant at St. Francis and a member of SEIU-UHW.
Prime responded that the union’s allegations were “unfortunate and untrue.”
St. Francis — which bills itself as the largest health care facility serving southeast Los Angeles County — treats about 80,000 emergency room patients per year.
SEIU-UHW is one of the largest unions of hospital workers in the United States, with 97,000 members, including about 1,000 at St. Francis.