For several years, California’s community hospitals have been something
of a vanishing species. Rising costs, along with changes in health care
policy, have made it extremely difficult to run profitable, affordable,
compassionate community-based hospitals in the state. When the Daughters
of Charity Health System (DCHS), a Catholic non-profit that runs six California
hospitals, announced last January that they would put their facilities
up for sale, they were only the latest in a long line of California medical
centers struggling with the financial realities of today’s healthcare
While DCHS may no longer be able to afford their hospitals, California
can hardly afford to have community hospitals go out of business. California
has the largest number of uninsured residents in the nation at seven million.
And many of those depend heavily on the charitable inclinations of safety-net
hospitals like those of DCHS. In fact, a total of 1.2 million of California’s
poor are in communities served by DCHS hospitals.
The ongoing implementation of the Affordable Care Act may reduce the number
of uninsured Californians to an estimated 5 million in 2015. But many
will still depend on government subsidies like Medi-Cal. In fact, more
than 1 in 5 Californians under age 65 are on Medi-Cal, including 1 in
3 of the state’s children.
But these days, fewer and fewer health providers actually accept Medi-Cal
patients. If the DCHS hospitals close or get carved up by multiple hospital
systems, who will serve these vulnerable populations?
Given these critical concerns, one would think that Prime Healthcare’s
agreement to purchase DCHS hospitals and to put desperately needed new
investment into these safety net facilities would be hailed as a victory.
Special interests however often have their own priorities. In this case,
one union’s resistance to the deal is obscuring the life-and-death
issues at stake, and putting politics before the people of the DCHS communities.
A Tale of Two Hospitals
San Jose and Gilroy, one large city and one smaller town, have felt the
tremendous benefits of DCHS’s charitable commitment over the years.
In San Jose, where 150,000 people live below the poverty line and almost
a third of those live 50% beneath that benchmark, DCHS facilities, such
as O’Connor Hospital, have provided critical services like pre-natal
care, life-saving surgeries, and open emergency rooms to residents who
have few alternatives.
But if the special interests continue to fight to block the hospital’s
sale to Prime Healthcare, San Jose’s under-insured population will
no longer be able to take this safety-net commitment for granted.
A few miles south in Gilroy, the situation is even starker. In a population
of just over 50,000, close to 10,000 live below the poverty line. If the
local DCHS hospital closes, residents—many without easy transportation
options—will face long commutes to receive basic procedures and
lose a critical lifeline to affordable healthcare.
The under-insured people of Gilroy simply don’t have another full
service local choice. Neither for that matter do the hospital employees
whose jobs are contingent on the hospital staying open.
Daughters of Charity understands the struggles of these communities, which
is why the decision to sell was not an easy one. But a reported $10 million
monthly deficit was too much to absorb. As DCHS board member Sr. Marjory
Ann Baez put it, “The realities of modern health care are harsh,
and after prayerful discernment, it became clear that the responsible
thing to do is to find new ownership.”
Indeed, new ownership is highly preferable to these community hospitals
closing their doors, which is why the DCHS Board so carefully vetted prospective
new owners. Prime Healthcare, DCHS’s chosen buyer, has committed
to maintain charity care policies and invest $150 million in capital improvements
in the DCHS system—bringing new life, new money, new jobs, and most
importantly, a renewed commitment to serving vulnerable populations.
Those below the poverty line have few options when it comes to healthcare.
The reality is that without Prime Healthcare’s bid to buy the DCHS
system and continue its charity work, hospitals will close and communities
will suffer. And yet, even without legitimate alternatives, critics of
the purchase are putting disadvantaged populations even more at risk.
The Daughters of Charity have made their decision. Now the Attorney General
of California must approve the deal. With her signature, and Prime Healthcare’s
investment, Californians can sleep better knowing their health and the
health of their children remains in safe hands.