Dive Brief:
- On March 10, Prime HealthCare walked away from a deal to buy six struggling Catholic hospitals from the Daughters of Charity Health System. Prime Healthcare founder Prem Reddy said he rejected the deal because the conditions CA attorney general Kamala Harris had put on the sale made the deal financially impossible.
- Prime founder Prem Reddy called accusations that the hospital puts profits over patients a "callous and irresponsible statement," noting that the chain has never closed a hospital it has purchased.
- Reddy said that Prime would still be interested in purchasing Daughters of Charity, especially should the hospital file for Chapter 11 bankruptcy, according to the LA Times.
Dive Insight:
Reddy estimates that continuing to run the hospitals at their current level of services for 10 years—one of Harris' chief conditions—would have resulted in a cumulative loss of $3 billion. "My hope is that she will reconsider," he said of Harris' decision.
The board of directors for the six struggling hospitals is now being forced to consider bankruptcy. Having to declare bankruptcy would likely result in cost-cutting measures, including cuts to salaries, staff and hospital services.