Prime to buy 6 California hospitals in escalating battle with organized labor

Prime Healthcare Services Inc. agreed to buy six nonprofit Catholic hospitals in California in an escalating battle with organized labor.

Prime said it would keep all six hospitals open and maintain existing services for at least five years, the Los Angeles Times reported (http://lat.ms/1vWMxr9 ). The for-profit company also said it would spend $150 million on capital improvements over three years and preserve most of the hospitals' 7,600 jobs.

Prime said it would take on nearly $300 million in pension liabilities for current and retired employees at the six hospitals, which have been struggling financially.

Other terms of the sale by the Daughters of Charity Health System were not disclosed.

Opponents are vowing to fight the sale, which is subject to approval by California Attorney General Kamala Harris.

The Service Employees International Union has been attacking the rumored deal for weeks, saying Prime puts profits ahead of patient care. The union has recruited state lawmakers and community groups to oppose the takeover and it plans to air television ads urging Harris to reject the sale.

"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," said Dave Regan, president of SEIU-United Healthcare Workers West.

A spokesman for the California attorney general's office declined to comment to the Times, pending its review. The attorney general's office has approved two past purchases by Prime and rejected two others.

Prime, based in Ontario, operates 29 hospitals in California and eight other states. For years, it has faced criticism and government investigations surrounding its billing practices and handling of patient privacy.

Prime's chief executive, Prem Reddy, defended the quality of care and faulted the union for its attacks.

"Their interest is not in the health care of these communities. Their interest is in increasing membership," he told the Times.

Daughters of Charity began seeking offers in January. Robert Issai, its chief executive, said the chain has been losing about $10 million a month.

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Information from: Los Angeles Times, http://www.latimes.com

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Information from: Los Angeles Times, http://www.latimes.com