Prime Sues Unions for Interfering in Bid To Buy Calif. Health System
On Monday, Prime Healthcare Services filed a lawsuit against employee unions for interfering in its bid to purchase a struggling not-for-profit health care system in California, Modern Healthcare reports (Kutscher, Modern Healthcare, 8/26).
Prime Healthcare Services is looking to buy the six-hospital Daughters of Charity Health System (Mack, California Healthline, 8/15).
The Service Employees International Union-United Healthcare Workers West and the California Nurses Association have voiced concerns about the bid, saying that such a purchase would reduce health care access for low-income patients and that Prime would cut health system workers' pay and benefits.
Regional union groups have staged rallies and other events over recent months to protest the potential sale to Prime (Seipel, San Jose Mercury News, 8/26).
Last week, Daughters of Charity Health System CEO Robert Issai said that "unfounded criticisms" about potential buyers have been "dangerous to the future health care needs of the local communities" and have been "purely in the self-interest of those voicing the criticisms" (California Healthline, 8/22).
On Monday, three California lawmakers -- Sens. Jim Beall (D-San Jose), Jerry Hill (D-San Mateo) and Bill Monning (D-Carmel), who have all received union support -- sent a letter to state Attorney General Kamala Harris (D) criticizing a possible sale of the system to Prime. Harris' office must approve the sale.
Details of Lawsuit
The lawsuit, filed in the U.S. District Court in San Francisco, confirms that Prime put in a bid to purchase the health system, the San Jose Mercury News reports.
The lawsuit alleges that several unions have violated the federal Racketeering Influenced and Corrupt Organizations Act by conspiring to "target and attack Prime with the ultimate objective of either unionizing Prime, thereby altering its cost structure and business model, or eliminating Prime from the market altogether." The suit specifically names:
- Change to Win, a union federation;
- SEIU-UHW; and
- Three union leaders.
The hospital chain is seeking general damages related to "the harm caused by the defendants' unlawful conduct."
SEIU-UHW spokesperson Steve Trossman said the charges in the lawsuit "simply do not hold up to scrutiny."
Trossman said that many of the allegations "were contained in a previous lawsuit against SEIU that was dismissed multiple times," adding that the union would "seek a fast dismissal" of the lawsuit from Prime.
Daughters of Charity Health System's Response
Daughters of Charity Health System officials declined to comment on the lawsuit.
However, they said that seven interested organizations have bid to purchase the health system and that the winner would be announced this fall (San Jose Mercury News, 8/26).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.