- Prime Healthcare CEO Dr. Prem Reddy announced Monday that the hospital system plans to go public in the next two or three years.
- The California-based hospital chain is already the fifth-largest in the United States, and is still growing. Prime recently announced that it would grow from 29 hospitals to 42 by April, pushing its annual revenue up to $4.5 billion (from $2.5 billion), making it the fourth-largest system in the country. In fact, according to Reddy, there are "no limits" on the system's capacity for growth.
- Prime currently has deals in place with hospitals in Pennsylvania, Kansas, Michigan, Texas and Nevada, although some regulatory barriers still stand in the way. The 29 acute-care hospitals it already operates serve populations in California, Pennsylvania, Nevada, Kansas, Rhode Island, Texas and Alabama.
Prime is still embroiled in the ongoing dispute over the Catholic nonprofit Daughters of Charity Health System. The SEIU and California Attorney General Kamala Harris both strenuously object to Reddy's proposal to buy the six hospital-system—this is the same AG, by the way, who blocked Prime's acquisition of Victor Valley Community Hospital in 2011 (also opposed be the SEIU). This is a heated battle: The union recently accused Prime of overbilling Medicare by $93 million, which the chain allegedly did by keeping patients overnight as inpatients when they could have been on observation status.
Still, none of that seems to be slowing Prime's roll as one of the most dominant healthcare systems in the country. A public launch—with the capital infusion it entails—is likely to only augment the chain's not-inconsiderable power. The question is how the management of the company will shift with the addition of shareholders. This is Reddy's baby and by the very definition of an IPO, he stands to forego a lot of autonomy here.