Attorney General Blocks Sale of Anaheim Medical Center
The office of Attorney General Jerry Brown (D) on Wednesday rejected Prime Healthcare's $55 million bid to purchase Anaheim Memorial Medical Center, the Los Angeles Times reports.
Approval from the attorney general's office is required before a not-for-profit hospital can be sold to a for-profit entity (Costello, Los Angeles Times, 7/12).
Chief Deputy Attorney General James Humes late Wednesday posted a letter on the attorney general's Web site concluding that the sale might not be in the best interest of the community. The letter also raised questions about the fairness of the bidding process, particularly because some other bidders had shown "tentative willingness to pay substantially more" for the facility than Prime Healthcare offered (Perkes, Orange County Register, 7/11).
Memorial Health Services, the parent company for Anaheim Memorial Medical Center, accepted Prime Healthcare's bid in February.
Gareth Lacy, a spokesperson for Brown, said that the rejection was uncommon, adding that officials could not recall a similar instance.
Barry Arbuckle, president and CEO of Memorial Health Services, said Prime Healthcare's offer was accepted because the firm "was the only bidder that was both financially sound and had experience running hospitals."
Prime Healthcare pledged continued interest in the hospital and indicated that it would participate in another bidding process for the facility.
Opponents of the sale applauded the decision, saying that it showed the state was paying closer attention to Prime Healthcare's operating style.
Prime Healthcare has drawn criticism for canceling contracts with insurers and allegedly compromising the quality of care for uninsured patients (Los Angeles Times, 7/12).
The letter from the chief deputy attorney general regarding the ruling is available online. Note: You must have Adobe Acrobat Reader to view the letter.