Dive Brief:
- The beleaguered Daughters of Charity Health System has received a $250-million lifeline from BlueMountain Capital Management, which will recapitalize and manage the six-hospital system. The New York firm may eventually purchase DCH.
- BlueMountain will sponsor Integrity Health to manage DCH; the hospital board will hand over its control to an independent board of directors while Integrity will provide "key management services."
- Under the terms of the deal, which must receive approval from the state attorney general, DCH will retain its nonprofit status.
Dive Insight:
The hospital is likely still holding its breath until it receives approval from AG Kamala Harris—and from the influential Service Employees International Union-United Healthcare Workers West, which was a vocal opponent of the proposed takeover by Prime Healthcare that collapsed earlier this year. So vocal, in fact, that DCH filed a lawsuit against SEIU-UHW in March alleging that the union used "extortionist threats" to try to block the sale of its six hospitals to Prime.
The union backed a takeover by another equity firm, Blue Wolf Capital Partners, and has said that it is still reviewing the details of this deal before it gives its blessing. "We had a much stronger grasp of the Blue Wolf bid," said SEIU-UHW president Dave Regan, "and were confident it protected critical health services for local communities."
The core Integrity team includes: Mitch Creem, a hospital finance expert who has worked at UCLA Health and Beth Israel Deaconess Medical Center, and Mark Meyers, who has worked in hospital operations at Dignity Health.