Fallout After Attorney General Decision on Daughters of Charity Health System

After Attorney General Kamala Harris imposed conditions that a buyer, Prime Healthcare, declined to agree to on the sale of troubled Daughters of Charity Health System, supporters of her decision said other buyers would save all of the hospitals and services. But so far, no buyers have emerged, and the fallout has begun.
DCHS announced this week that several service lines at some of its six hospitals would either be closing or be diminished. According to the San Jose Mercury News, Gilroy's only maternity ward is shutting down, forcing expectant parents to drive to San Jose or Hollister for deliveries, and San Jose's O'Connor Hospital is cutting the number of nurses in its emergency room. Saint Louise Regional Hospital will be closing its maternity and pediatric services within three months.
"This is what we need to do in order to save the hospitals, so this should come as a surprise to no one,'' Daughters CEO and president Robert Issai told the Mercury News. Issai also said that nurses in the units could lose their jobs. Nurse layoffs have also hit O'Connor Hospital and Seton Medical Center in Daly City. Managers and vice presidents have been laid off.
Prime said it was forced to withdraw from the sale because the AG's conditions would have made it unable to keep the hospitals open. While thousands of community members, workers and the California Nurses Association supported the transaction, the Service Employees International Union-United Healthcare Workers West and its political supporters opposed the deal. SEIU and Prime have been in contention for several years over a neutrality agreement that the union wanted at all of Prime's California hospitals.
Several of the smaller hospitals could also be shuttered, and it's still not been decided if DCHS would go bankrupt. A bankruptcy would erase any of the union bargaining agreements, put a pension plan for 17,000 current or retired workers in jeopardy and probably force the hospitals to be sold piecemeal.

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