Leaders from Providence Medical Center in Kansas City, Kan., and St. John Hospital in Leavenworth, Kan., vigorously argued in favor of their organizations' proposed sale to Ontario, Calif.-based Prime Healthcare Services before the Kansas attorney general at a public hearing, according to a report by the Kansas City Star.
Supporters said the for-profit Prime could keep the hospitals' emergency departments open for five years, while opponents called the attorney general's attention to a pending federal investigation into the chain and a smattering of conflicts with labor groups and unions at its hospitals, according to the report. The U.S. Department of Justice is probing into allegations of Medicare overbilling, and Prime is currently appealing fines from California regulators for alleged patient privacy violations.
The two hospitals suffered total operating losses of $78 million in the last decade, prompting their Denver-based owners Sisters of Charity of Leavenworth Health Service Corp. to declare that keeping the hospitals under their umbrella would be "unsustainable," according to the report.
Out of three bidders from the hospitals' 18 months of due diligence, only Prime offered a plan to keep the hospitals' emergency and charity care at present levels for five years. But SCLHS said the agreed upon $54.3 million selling price for the hospitals falls short of the $121 million of debt SCLHS will retain after the sale. That leaves no money to set up a non-profit foundation to make grants and oversee charitable operations once the transaction is complete, similar to other for-profit purchases of non-profit hospitals in the Kansas City area, according to the report.
The attorney general will hear public comment on the issue through the end of this week.
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Supporters said the for-profit Prime could keep the hospitals' emergency departments open for five years, while opponents called the attorney general's attention to a pending federal investigation into the chain and a smattering of conflicts with labor groups and unions at its hospitals, according to the report. The U.S. Department of Justice is probing into allegations of Medicare overbilling, and Prime is currently appealing fines from California regulators for alleged patient privacy violations.
The two hospitals suffered total operating losses of $78 million in the last decade, prompting their Denver-based owners Sisters of Charity of Leavenworth Health Service Corp. to declare that keeping the hospitals under their umbrella would be "unsustainable," according to the report.
Out of three bidders from the hospitals' 18 months of due diligence, only Prime offered a plan to keep the hospitals' emergency and charity care at present levels for five years. But SCLHS said the agreed upon $54.3 million selling price for the hospitals falls short of the $121 million of debt SCLHS will retain after the sale. That leaves no money to set up a non-profit foundation to make grants and oversee charitable operations once the transaction is complete, similar to other for-profit purchases of non-profit hospitals in the Kansas City area, according to the report.
The attorney general will hear public comment on the issue through the end of this week.
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