California

Unions Thwarting Attempted Rescue of California Hospital Serving the Poor

Costly contract provisions from the state attorney general are making it more difficult for a hospital to be sold, and saved.

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We all know the meaning of being given an offer we can't refuse — a reference to Don Corleone's words in the movie, "The Godfather." Saying no in such a situation is not a "survivable" option. But California political observers are trying to figure out the meaning of an offer recently made by California Attorney General Kamala Harris.

Critics say she gave the potential buyer of a hospital chain an offer it might not be able to accept. Her actions threaten the survivability of the Daughters of Charity Health System, a Catholic nonprofit group that runs four hospitals in the Bay Area and two around Los Angeles. The hospitals mainly serve poor and elderly patients.

It has been losing $10 million a month. Two suitors emerged. The Daughters of Charity rejected an offer by a cost-cutting private-equity firm that wanted merely to manage the system and instead chose a sale to Prime Healthcare Services of Ontario.

This would seem like a good resolution given the situation. A financially troubled health system that serves the poor finds a buyer that will save it from insolvency, and which promises to keep all of the hospitals open for five years. But a nearly two-decade-old state law gives the attorney general godfather-like powers to approve, deny or impose conditions on any sale or transfer of a nonprofit health facility to a for-profit one.

Harris in February granted "conditional approval" of the ownership change from the Daughters to Prime — provided Prime agrees to a 78-page agreement filled with costly conditions. For the next 10 years, Prime would agree to keep all the hospitals open. It must spend $150 million on capital improvements in three years, assure the full pension benefits of retirees and current employees, and invest $350 million in seismic retrofitting.

Some observers see this as a means to scuttle the deal. Even some supporters say the conditions imposed on Prime are unprecedented. Prime is deciding whether to go through with the sale. The Daughters of Charity says it will file for bankruptcy if it doesn't. If Prime moves forward, these costly provisions could threaten its long-term health.

This convoluted deal is easier to understand in the context of union politics. The powerful Service Employees International Union/United Healthcare Workers West has been harshly critical of the sale to Prime, which it accuses of profiteering. By contrast, one of its rival unions,the California Nurses Association, has backed the sale as a way to save the hospital system.

"To protect some union perks, you're going to (possibly) force the shutdown of two to six hospitals?" asked Adrian Moore, vice president of the Reason Foundation [which publishes Reason magazine]. "It's crazy. How many indigents will not be treated so you can favor (the union)?" Hospitals are a business – and they change ownership all the time. He questions the state law that gives the attorney general this power.

The situation could have been worse. Last year, union-allied Democrats passed SB 1094, which would have authorized the attorney general "to amend conditions after the decision is issued under specified circumstances." It would have allowed an AG to go back after the deal is done and change its conditions. (The governor vetoed it.)

The goal: Keeping Catholic hospitals from acquiring facilities and then ending abortion procedures. But the result of such blatant politicking could mean freezing investments in health-care facilities. "Would you sign a contract if you knew the terms could be altered after you agreed to the deal?" asked columnist Bruce Maiman in the Sacramento Bee. Easy answer.

Instead of allowing private organizations to come up with the terms of their own purchases and transfers, the state has given the power to political officials and their union allies. Instead of helping the poor, it hurts them. In a lawsuit filed last month, the Daughters of Charity claim SEIU/UHW West's activities to delay the sale have cost it millions of dollars that could have been used to provide health care.

There's a reason our political system is more about checks and balances and less about empowering godfathers, who can impose questionable edicts one can't afford to refuse – or accept.

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  1. Behold your next CA US Senator!!! Kamala Harris!!!

    Actual, living and breathing evil.

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  2. “Prime is deciding whether to go through with the sale.”
    Not last I heard: It’s DONE!

    (3/10/15)
    “A Southern California-based hospital chain Tuesday withdrew its offer to buy six financially troubled hospitals in the state, including four in the Bay Area.”
    […]
    “Maintaining all services for 10 years regardless of whether the services are needed or essential for the communities served is unprecedented and untenable. In essence, the Attorney General is telling Prime Healthcare to operate the hospitals exactly as DCHS has and expect different results.”
    http://www.latimes.com/opinion…..story.html

    1. Wrong link. Here’s the correct one:
      http://sfbay.ca/2015/03/10/buy…..ital-deal/

    2. I hate California

  3. this is exactly the kind of depressing shit I want to read at 9:30 am on a Friday. Im going back to the Remy DC Matic show.

  4. In an ideal world, Prime would walk away from the Daughters of Charity Health System and run an ad on local television explaining that Ms. Harris was responsible for the outcome.

  5. Let the State of California own and operate it. Direct oversight and responsibility could come from the AG’s office.

    1. That would simply lead to higher taxes, worse outcomes and no, Harris would not suffer from it. She’ll be gone to a new public teat long before the press figures out it’s not working.

      1. I was being sarcastic, but I supposed there wouldn’t be any repercussions. And the patients would likely receive lesser care.

        1. Sorry. Sarc meter needs work.

          1. I should have added a tag…

        2. I don’t think it can count as sarcasm if there are actual people in the world who think it’s a reasonable idea. Also, and for the same reason stated, you might not want to put ideas in people’s heads, that’s how we get Obamacare and Netneutrality.

          Here’s how to make your comment sarcastic, replace “State of California” with any of the following:

          Hmmmm… I’m honestly not sure what would be a safe bet here as there seems to be a consensus on the left that private organizations should be managed by just about anybody other than the skilled professionals who are actually running the organization.

          Maybe Martians…. Yes, go with Martians.

  6. I wonder what the judge is going to do to those retirement contracts in BK.

    1. “Hello, Pension Benefit Guaranty Corp?”

  7. and fuck the charity for saying this:

    “We are disappointed that Prime Healthcare has decided not to go forward with the purchase of our hospitals. We strongly disagree with Prime’s position on the attorney general conditions.”

  8. As long as health care is a regulated market in which providers are expected to offer standard services, religious organizations should be held to the same standards as everybody else. Abortion is a legal, covered medical procedure and therefore must be offered. If Catholic organizations don’t want to do that, they should get out of the hospital business, or they should lobby for deregulation of healthcare.

    As for unions scuttling this deal, they should probably just let the hospital go into bankruptcy and then pick up the pieces. That’s much simpler and cheaper.

    1. “As long as health care is a regulated market in which providers are expected to offer standard services, religious organizations should be held to the same standards as everybody else. Abortion is a legal, covered medical procedure and therefore must be offered.”

      Because an unjust law/regulation of the markets exist, all should be enslaved equally!

    2. Ha ha ha ha ha ha ha ha ha!
      Oh, you weren’t joking?
      Ha ha ha ha ha ha ha ha ha!

    3. Shut the fuck up, evil scum. Have you ever seen a shaved bear? They look funny. Maybe you should be similarly sheared.

    4. What if they don’t have the expertise to provide an abortion, should they use a coat hanger?

      Seriously, who decides what service a business should provide?

      Should ALL tatoo places provide piercing because most do?

      The reason why doesn’t matter, once you force people to start doing things they don’t want to, bad shit starts happening.

    5. Up your ass with broken glass…statist scum.

    6. As for unions scuttling this deal, they should probably just let the hospital go into bankruptcy and then pick up the pieces. That’s much simpler and cheaper.

      And do what with them? I’ve never seen a union that had any earthly idea how to actually run a business. If they did, most of their demands would go away, and there wouldn’t be a long string of union-shop industries that no longer exist.

      1. they should probably just let the hospital go into bankruptcy and then pick up the pieces. That’s much simpler and cheaper.

        Because that’s exactly how BK works. It’s a simple painless procedure that takes just a few minutes (on an outpatient basis) and everybody emerges, pockets a-bulge with free money, into a sunshinier world were puppies are cuddlier, strawberries are sweeter, and nothing bad can ever happen again.

  9. Dave Regan, president of SEIU-United Healthcare Workers West, is fucking clueless:

    “This announcement sets the path for other buyers more compatible with Daughters’ commitment to public health to jump in immediately to purchase either the entire health system or individual hospitals.”

    1. Yeah, they’ve just been waiting in line like a bunch of lemmings!

    2. Well, Dave, why don’t you sink the SEIU retirement fund into buying the system and running it on the terms you want Prime to operate under.

      1. Back in the 1970s I actually saw unions try to run businesses a couple of times. “For the benefit of the workers.”

        It was really ugly. Turns out people don’t shop at a business unless it benefits the customers. Who knew?

    3. is fucking clueless

      Damn straight. Who the hell would touch that just after seeing what kind of deal the AG would require? Why would you even waste time in meetings knowing that you have a whimsical political entity that can scuttle it at any time?

    4. Yep, use OPM to achieve your goals. Now way you’d put your balls where you mouth is….

  10. Progs hate the poor.

  11. my co-worker’s ex-wife makes $69 /hour on the computer . She has been unemployed for ten months but last month her pay was $21452 just working on the computer for a few hours. navigate to this site………….

    ????? http://www.netjob70.com

  12. Kamala Haris….Die Fuhreress

  13. Tony, AmSocialist, CraiginMASS, Palin’sbuttplug — WHERE THE FUCK ARE YOU?

    Please come here and defend the AG or do you hate the poor?

    Anyone…

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  18. This is no big deal, because now with Obamacare the indigent will get their own health insurance policies. All they need is a bank account, debit card, several forms of ID, a phone or means of getting on the internet, a mailing address and the cash to pay for the insurance.

    As promised, Obamacare will provide healthcare for all! Government will finally replace greedy private charities.

    1. Also, Kamala Harris is a preening, posturing phony.

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