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Daughters of Charity Health System to sell 6 hospitals to Prime Healthcare Services

The board of directors of Daughters of Charity Health System — a six-hospital network based in Los Altos Hills, Calif. — has agreed to sell its hospitals to Ontario, Calif.-based Prime Healthcare Services.

DCHS has been struggling financially, which led the system to solicit acquisition proposals from all types of healthcare organizations earlier this year. In fiscal year 2013, it reported approximately $1 billion in total assets and posted a $90.7 million operating loss.

Under the pending agreement, DCHS will sell the following California hospitals to Prime: Seton Medical Center in Daly City; Seton Coastside in Moss Beach; O'Conner Hospital in San Jose; Saint Louise Regional Hospital in Gilroy; St. Vincent Medical Center in Los Angeles; and St. Francis Medical Center in Lynwood.

"In selecting candidates to take over the hospitals, our priority was to seek the best buyer who could guide our hospitals into a successful future while honoring the obligations of our associates, retirees and other constituents," said Robert Issai, president and CEO of DCHS.

The deal still requires approval from California Attorney General Kamala Harris, and the Vatican, as DCHS is a Catholic system. Additionally, the financial terms of the transaction have not been disclosed.

Immediately after DCHS announced the sale of the six hospitals, SEIU-United Healthcare Workers West announced thousands of employees of the hospitals will fight to stop the sale, as the employees believe Prime puts profits before patients. They also believe Prime does not share the same mission as DCHS.

"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-UHW.

The SEIU-UHW is currently involved in a legal dispute with Prime.

More articles on transactions in the healthcare industry:

St. John's Episcopal Hospital forms partnership with Beacon Health Partners
Saint Francis Healthcare System joins Health Network of Missouri
8 recent hospital transactions and partnerships

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