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Attorney General Kamala D. Harris Issues Decision Approving Sale of Six Daughters of Charity Health Facilities

Friday, February 20, 2015
Contact: (415) 703-5837, agpressoffice@doj.ca.gov

SAN FRANCISCO—Attorney General Kamala D. Harris today issued her decision granting conditional approval of the change of control and governance of  Daughters of Charity Health System that includes six health facilities to Prime Healthcare Services, Inc. and Prime Healthcare Foundation, Inc. (collectively Prime).  This approval includes strong conditions to ensure continued community access to essential healthcare services.

The transaction includes the following six health facilities:

  • St. Vincent Medical Center
  • St. Francis Medical Center
  • O’Connor Hospital
  • Saint Louise Regional Hospital
  • Seton Medical Center
  • Seton Coastside

The Attorney General approved the transaction with the following key conditions:

  • For ten years, Prime must operate St. Francis, O’Connor, Saint Louise and Seton Medical Center as acute care hospitals and offer emergency services.
  • For ten years, Prime must operate Seton Coastside as a skilled nursing facility with emergency services.
  • For ten years, Prime must be certified to participate in the Medi-Cal and Medicare programs and have or maintain Medi-Cal managed care contracts at each of the facilities.
  • Prime must continue to provide essential health care services at the facilities including reproductive health care services.
  • Prime must invest $150 million in capital improvement expenditures at the facilities over the next 3 years.
  • Prime must continue to provide charity care and community benefits at historical levels.
  • Prime will assume and guarantee all pension obligations covering approximately 17,000 current and retired employees.
  • At each of the facilities and the medical office buildings, there shall be no restriction or limitation on providing or making reproductive health care services available, and this requirement must be explicitly set forth in the facilities’ policies and procedures.
  • Prime must meet seismic compliance requirements until 2030 at all the facilities, including retrofitting the patient tower at Seton Medical Center.
  • Prime  must revise its policies, tools, procedures, guidelines and training materials for its debt collection practices to ensure it does not violate state and federal debt collection laws and regulations. 
  • At each of the facilities and the medical office buildings, there shall be no discrimination against lesbian, gay, bisexual or transgender individuals, and this requirement must be explicitly set forth in the facilities’ policies and procedures.
  • All of the facilities will be required to submit to the Attorney General an annual report describing in detail their compliance with the conditions. 

The sale of the Daughters of Charity facilities is the largest transaction ever reviewed by the California Attorney General’s Office.  The decision to approve the transaction follows an in-depth review that included  five independent Health Care Impact Statements, six public meetings that collectively went more than 44 hours and where hundreds of comments were submitted, receipt and consideration of more than 14,000 comments separately delivered to the Attorney General’s Office, and consultations with  independent health care experts and concerned community members.  

The Attorney General’s decision conditionally approving the transaction with the full list of conditions can be found here: http://bit.ly/17BXffN

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Press Office Contacts

Email: agpressoffice@doj.ca.gov

Phone Number: (415) 703-5837


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