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October 13, 2014

For-Profit Firm in Deal to Buy Calif. Catholic Hospital Group

Prime Healthcare Services, a for-profit company with 29 hospitals in nine states, has reached an agreement to purchase Daughters of Charity Health Systems, which operates two nonprofit medical centers in Los Angeles County and four in the Bay Area, writes the Los Angeles Times. A union that represents 3,700 workers at the Catholic hospitals and existing Prime facilities vowed to fight the deal, which must be approved by the state's attorney general.

The Service Employees International Union has been protesting the long-rumored sale for weeks, claiming Prime has reduced patient services, raised prices, and laid off employees at hospitals it has taken over. Prem Reddy, the firm's chief executive, said the union's "interest is not in the health care of these communities. Their interest is in increasing membership."

Daughters of Charity has been seeking a buyer since January. CEO Robert Issai said the chain is losing about $10-million a month. Prime has agreed to keep the six hospitals open and maintain existing services for at least five years, and to take on the Catholic network's nearly $300-million in pension liabilities.