|[September 04, 2014]
Daughters of Charity Sets September Deadline To Accept Final Sale Offers
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
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.
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