Advocates on both sides of a pending purchase of Leavenworth's 118-year-old Saint John Hospital and Kansas City, Kan.'s Providence Medical have had their say, leaving it to Kansas Attorney General Derek Schmidt to give
Advocates on both sides of a pending purchase of Leavenworth's 118-year-old Saint John Hospital and Kansas City, Kan.'s Providence Medical have had their say, leaving it to Kansas Attorney General Derek Schmidt to give his stamp of approval for the final sale.
Schmidt hosted a public hearing Wednesday at the George Meyn Community Center in Wyandotte County Park on the proposed plan by Prime Healthcare Services of Ontario, Calif., to purchase both of the financially troubled local hospitals operated by the Sisters of Charity of Leavenworth Health Services.
The deal was announced in January with an expected close date some time in the spring. Schmidt said the public hearing was a step specific to instances where a non-profit hospital is sold to a for-profit company.
“The purpose of this hearing is to construct a record that my office will review to determine if the facts support the conclusion that this proposed transaction, if consummated, would conform to the applicable requirements of Kansas law,” he said.
Schmidt said he would be looking at a host of factors in weighing the sale, including whether board members were informed of the proceedings, whether the facilities are being sold for fair market value and regarding issues like a contractual enforcement that Prime would provide the same level of charity care as promised in the announcement of the impending sale.
Representatives of SCLHS and Prime argued that both parties were kept informed of the terms of the sale, which also include an agreement to provide acute care for at least five years and provide at least $10 million in capital investment over the next five years.
Michael Slubowski, president and chief executive officer for the SCLHS, said the two sides had agreed to put into writing the charity care requirements. They also testified that the transition to Prime was necessary.
“The writing is on the wall ― if we did not find a buyer, the hospital was going to close,” said Dr. Sabato Sisilo of Providence.
Slubowski said the system simply could not afford both a decline in patients and increase in charity care.
“Providence and Saint John in fact, are the de facto safety net hospitals for the counties,” he said.
He called the more than $78 million in operating losses at the two facilities over the last decade “unsustainable” before saying that Prime was the only company bidding for the hospitals that agreed to continue acute care.
“It's hard,” said Sister Charlotte White of the SCL on the decision to relinquish the facilities, “but what is important is that the area continue to be served by healthcare.”
Jim Summersett, a regional CEO for Prime in Dallas, said he understood the feeling of uncertainty felt by those in the communities and employed by the hospitals.
“Of course, there are some changes planned for the hospitals,” he said. “But, for the most part, we've committed that key management and employees will keep their jobs and services will be maintained.”
Leaders from the communities that are home to the two facilities also spoke in favor of the transition.
But the audience had its share of opponents and those who advised caution in the transition. Brenda Sharpe, president and chief executive officer of Reach Healthcare Foundation, encouraged the parties to make public as many details of the sale as possible.
“Our experience as a board of directors has been is that there are clear winners and losers in these transactions,” she said, echoing sentiments in a letter submitted to Schmidt by Kansas City, Kan., mayor Joe Reardon.
On the other hand Kansas City, Kan., resident Jeremy Hendrickson advised against letting the deal go through in the first place.
“This is being forced down our throats and it's not right,” he said.
Kim Davis, an employee at the Garden Grove Hospital in California and a member of the Service Employees International Union-United Healthcare Workers West that represents workers in the hospital, said through tears that Prime is under federal investigation for potential Medicare billing fraud and violations of patient privacy.
“Prime is focused on the bottom line and nothing but,” she said.
Schmidt said his office would review the record after it closes at the close of business Friday. His staff will then review the record to determine whether the proposed sale should be finalized under Kansas law.