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Prime Healthcare Saves Shasta Regional Medical Center from closure

Press Release, Jana Retes jretes@primehealthcare.com

New Operator pledges to keep Hospital open, continuing providing services.

REDDING, Calif. -- October 31, 2008 – Prime Healthcare Services (PHS) announced today that it will take over the operation of Shasta Regional Medical Center (SRMC) on November 1, 2008.

Today, Prime Healthcare Services, the award-winning hospital management company which owns and operates twelve acute care hospitals in Southern California, announced that its subsidiary, Prime Healthcare Services – Shasta, LLC (Prime Shasta) has agreed to step in and immediately become the new operator of Shasta Regional Medical Center to avoid the potential closure of the hospital. SRMC has been up for sale for the past several months and has been plagued by financial problems due to a lack of funding and the bankruptcy filing of Hospital Partners of America, the ultimate parent company of an 82% interest in SRMC. Another subsidiary of Hospital Partners of America shut down River Oaks Medical Center, a 524 bed hospitals in Houston, Texas, in June 2008 under similar circumstances.

At the request of Medical Properties Trust (MPT), a NYSE publicly traded real estate investment trust based in Birmingham, Alabama that owns the hospital’s real estate, Prime Shasta has agreed to become the new operator of the hospital effective November 1, 2008 so that closure can be avoided.

All of the hospitals that have been acquired by PHS were either in bankruptcy or under severe financial distress prior to acquisition by PHS’ subsidiaries. By implementing proven operational protocols, including physician-driven and patient-focused clinical pathways, adequate capital infusion and outcome-oriented management protocols, PHS has successfully turned around all twelve hospitals, keeping them open as community based hospitals offering much needed safety net healthcare access to the Southern California communities.

Prime Shasta is working on an expedited basis with state licensing agencies to become the licensed operator of SRMC as of November 1, 2008 so as to ensure that the hospital remains open. Prime Shasta will continue to provide all vital services at the hospital including the emergency department. Prime Shasta recognizes that SRMC, a 246-bed acute care facility, is a vital regional medical center and a critical access point to the healthcare safety net serving far Northern California. Under Prime Shasta’s management, the emergency department will be operated more efficiently with least amount of saturation/bypass times, patient wait times (fifteen minutes or less) and average length of stays (two hours or less) therefore offering more healthcare access to these growing communities. PHS will maintain the cardiac interventional and cardiac surgical programs at the hospital in addition to all other vital services.

Prime Shasta has already commenced efforts to seek applications from current employees of the hospital and to hire a sufficient number of employees in advance of November 1, 2008 so that the hospital continues to provide patient care on and after November 1, 2008.

All of PHS’ award winning hospitals provide superior quality patient care services as measured by Medicare Hospital Quality Indices (Core Measures) (ref. www.hospitalcompare.hhs.gov). Also, PHS’ hospitals offer more charity care compared to other not-for-profit and for-profit competitors (ref. www.oshpd.ca.gov)

Categories: Main News

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