LOS ALTOS HILLS, Calif.--(BUSINESS WIRE)--Daughters of Charity Health System (DCHS) continues to evaluate buyers from among the seven qualified competitors who have stepped forward. DCHS plans to accept and begin reviewing last, best and final offers for their health system on September 12.
DCHS continues to lose money at a rapid pace and is facing operational challenges as it seeks new ownership. The system’s board of directors said it expects to select a buyer this fall.
“Daughters of Charity Health System has a proud history of providing exceptional care to everyone in the community, regardless of ability to pay,” said Robert Issai, President and CEO of DCHS. “We regret that we are no longer capable of sustaining our network but we are committed to finding a buyer who can meet our obligations to our associates, employees, bondholders and communities.”
The Board of Directors of DCHS has endorsed strict criteria to evaluate a potential buyer. A particular emphasis is being put on finding a buyer who can keep the hospitals operating without jeopardizing the pensions of current and retired employees.
“It’s vitally important to take care of employees – both union and non-union – who could lose all or part of their pensions if the right buyer is not selected,” Issai said.
The seven potential buyers who are in the running to make qualified offers have not been identified in observance of confidentiality requirements. Once a buyer is selected by the DCHS board, the state Attorney General will be notified to begin the approval process.
“We are hoping to move through the approval process quickly in order to avoid disruption of hospital services,” Issai said. “Criticism of specific buyers by the hospital unions and others is premature and irresponsible, given that no decision has been made.”
Among the criteria being used by DCHS to evaluate possible buyers are:
- The ability to invest in capital improvements at the aging facilities
- Whether they can meet a reasonable timeline of closing the sale
- Whether they can continue to meet the health care needs of the surrounding communities
- The satisfaction of any sale contingencies
- The satisfactory future treatment of collective bargaining agreements
- Their experience successfully running hospital systems
- Whether the buyer can avoid having to put the DCHS hospitals through potentially divisive bankruptcy proceedings
- Their financial stability and willingness to meet what the board considers a fair price
“This moment in our history is without a doubt very difficult,” Issai added. “We are trying to preserve healthcare services and jobs in the communities we serve and, at the same time, we are trying to protect the pensions of those who have faithfully served us and those communities.”
Daughters of Charity started its health care mission in California in 1858 with the opening of the Los Angeles Infirmary, now known as St. Vincent Medical Center. Today, the health system includes a medical foundation, six hospitals, among them: O’Connor Hospital in San Jose, Saint Louise Regional Hospital in Gilroy and Seton Medical Center in Daly City, and Seton Coastside, a long-term care facility and stand-by emergency room in Moss Beach.
Last year, the Daughters of Charity hospitals cared for 172,000 emergency room visitors and provided in excess of $159 million in uncompensated care and services to people living in poverty, in addition to $22 million in traditional charity care.