(Ontario, CA – August 13, 2020) – Prime Healthcare announced that it has successfully completed
the acquisition of St. Francis Medical Center, signaling a new era of
service excellence and award-winning healthcare for an essential medical
facility in Los Angeles County.
AUGUST 14 UPDATE:
Prime and the Attorney General (AG) in partnership have entered into an
agreement regarding the St. Francis Medical Center AG conditions, which
was approved by the Court today.
Prime agreed to additional conditions beyond those agreed to in the APA
in partnership with the AG, to benefit patients and communities, including
historic charity care policies that benefit more patients in need and
over $65.6 million in charity care and community benefits.
Specifically, Prime has committed to increase its annual charity care commitment
from $8 Million to $9.35 Million (increase of $1.35 Million per year times
6 equals $8.1 Million) and increase its annual community benefit commitment
from $1,139,301 to $1,597,077. This is a total commitment of $56.1 Million
in charity care and $9,582,462 in community benefit services over the
six-year term of the conditions.
Prime agreed to adopt one of the most generous charity care policies in
the State, with charity care eligibility going up to 400% of the federal
poverty level and discounted care eligibility up to 600% of the federal
poverty level. This is in addition to $9.35 Million in annual charity
care, which exceeds the amount of charity care provided by St Francis
in FY 2019 which was $6.75 Million.
After an extensive four-month review process and public hearing, the sale
of the 384-bed Lynwood, CA hospital to Prime Healthcare received final
approval from the U.S. Bankruptcy Court for the Central District of California
and the California Attorney General, ensuring that the mission of the
hospital will continue with Prime. Prime was chosen as the best and highest
bidder to acquire St. Francis based on a significant financial commitment
of over $350 million, unique ability to turn around struggling hospitals,
clinical quality assurances and a commitment to continue the mission of
the hospital. Prime will continue service lines, charity care and community
benefits while investing millions in technology, systems and infrastructure
improvements to modernize the delivery of care, investments which are
already underway. The purchase by Prime from Verity Health provides the
stability and clinical expertise needed for this era of evidence-based
medicine and patient choice.
“Prime Healthcare is honored to continue the legacy of St. Francis
Medical Center, an indispensable community partner comprised of committed
doctors, nurses, and staff dedicated to saving lives and serving all those
in need,” said Sunny Bhatia, MD, CEO of Region I of Prime Healthcare.
“Prime is prepared to lead St. Francis into a bright future and
we are grateful for the opportunity along with the support we have received
from the community.”
St. Francis Medical Center, located in Southeast Los Angeles, is a historic
acute care hospital with one of the largest and busiest emergency departments
and Level II trauma centers in Los Angeles County, treating nearly 64,000
emergency patients and more than 2,000 trauma patients a year.
“Prime has remained deeply committed to St. Francis and was chosen
as the most capable and only bidder with the fortitude to support the
hospital in its time of greatest need, despite the pandemic, economic
impact on hospitals and uncertain future,” said Rich Adcock, CEO
of Verity Health. “We have been impressed by the unwavering dedication
and talent of the Prime team, and we are confident that Prime will preserve
and improve upon the St. Francis legacy for future generations, as it
has done for hospitals and communities time and time again across this
The sale of the hospital to Prime Healthcare received support from St.
Francis staff and physicians, as well as elected officials in Los Angeles
County. “I can think of no other health system with the expertise,
resources and commitment to quality to take on the crucial task of preserving
St. Francis for the South Los Angeles community,” said Inglewood
Mayor James Butts, whose own community hospital, Centinela Hospital Medical
Center, was on the brink of closure before being saved by Prime in 2007.
“Centinela Hospital Medical Center is today one of the leading hospitals
in Los Angeles County, more than fulfilling the promises Prime Healthcare
made years ago to our community.”
Attorney General Xavier Becerra noted that his approval of the sale of
St. Francis to Prime Healthcare “protect(s) access to care for the
Los Angeles communities served” by St. Francis. He further noted,
“The COVID-19 public health crisis has brought home the importance
of having access to lifesaving hospital care nearby in our communities.
St. Francis Medical Center is not just an asset, it is an indispensable
neighbor, it is the workers who serve the patients, and the doctors who
save lives. We conditionally approve this sale to keep it that way.”
“St. Francis Medical Center and Prime Healthcare are both top tier
health care institutions, and the completion of the sale cements a win-win
for patients, employees, and the community,” stated St. Francis
Board Chair Charles (Chad) Druten, Jr. “As a member of the Prime
Healthcare family, St. Francis has a strong new network of systems and
resources that will enable it to elevate and expand services and maintain
its prominence as a place that proudly delivers outstanding, state-of-the-art,
The bankruptcy judge preliminarily approved the Asset Purchase Agreement
(APA) for the sale from Verity Health to Prime in early April. Under the
agreement, Prime acquired St. Francis for a net consideration of over
$350 million, including over $250 million cash. In addition, Prime has
committed to invest $47 million in capital improvements. Prime has already
begun executing on its commitment by installing best-in-class technology
and systems, such as Epic, an integrated electronic medical records platform,
Omnicell systems for automated medication dispensing, and new interventional
radiology and cardiology capabilities, all of which will improve the patient
and caregiver experience.
Prime’s purchase bid was the highest, best and only qualified offer
received by the Bankruptcy Court, which praised the bid for securing the
mission of St. Francis. The court also determined that any further delays
in the bidding process could have resulted in the hospital becoming insolvent.
Preserving jobs that would otherwise be lost and saving the hospital from
Prime not only offered the highest purchase price, but also committed to
maintaining all essential care, trauma care, charity care and community
benefit programs, while continuing St. Francis’s long-standing mission
of service. Prime plans to expand service lines based on community need.
“With the acquisition of St. Francis Medical Center by Prime Healthcare,
our community can be confident that St. Francis Medical Center will always
be available for them when they need us,” said Maxine Anderson,
MD, St. Francis Chief of Staff. “Prime has already substantially
completed the installation of a new medical record system and will continue
to offer comprehensive healthcare services that include outpatient services
to basic emergency services, women’s services, stroke/STEMI services,
trauma services, and more. We look forward to continuing these key services
with Prime Healthcare’s acquisition and leadership.”
Substantially all of St. Francis’s employees have been retained,
and Prime has successfully reached initial three-year collective bargaining
agreements with the hospital’s labor unions, SEIU and UNAC, which
represent more than 85 percent of the hospital’s employees.
Prime Healthcare is nationally recognized for its success in saving financially
distressed hospitals and its clinical excellence, with its hospitals named
among the nation’s “100 Top hospitals’ 53 times. In
addition, Prime has received more Patient Safety Excellence Awards than
any other health system in the country for five consecutive years (2016-2020),
according to Healthgrades.
With the addition of St. Francis Medical Center, Prime Healthcare owns
and operates 46 hospitals in 14 states with nearly 40,000 employees and