Catholic nonprofit sells hospitals to controversial SoCal company

SAN JOSE, Calif. (KGO) -- A Catholic nonprofit with deep roots in the Bay Area made a stunning announcement this morning. It's selling its hospitals to a controversial Southern California health system. Employees are fighting the move.

A representative from the buyer Prime Healthcare Services promised the hospitals they just bought would stay open forever and they would not cut services. But layoffs may be inevitable.

Daughters of Charity Health System was formed in 2002, but started its health care mission in California in 1858.

It has six hospitals in California, including three in the Bay Area, O'Connor in San Jose, Saint Louise in Gilroy and Seton Medical Center in Daly City.

The board of directors says recent operating losses reached $10 million a month.

Prime Healthcare is acquiring all the assets and liabilities of Daughters of Charity. It's the largest for profit system in California that operates 29 hospitals in nine states.

A spokesman for Prime Healthcare said layoffs could take place, but would most likely come from middle management.

Workers are concerned the charitable atmosphere and work environment will change.

"There are usually going to be some layoffs in the beginning when we're doing this, but at the end of a year, we normally have more clinical jobs in our hospitals," said Brandy Haynes, O'Connor Hospital registration workers. "Maybe less administrators, but more clinical."

"Based on their past history we're not confident that they're going to be supportive of all service types."

Dave Regan, the president of the SEUI United Healthcare Workers West released a statement. saying "We are not going to roll over and risk watching Prime Healthcare cut services, raise prices and lay off caregivers like they've done in so many other communities in California and other states."

The Daughters of Charity Health System says Prime Healthcare services has committed to $150 million in capital improvements over the next three years, will maintain charity care policies, fund pastoral care programs, honor existing union contracts and accept 100 percent responsibility for the pensions for the 16,000 workers.

This acquisition still needs approval from the State Attorney General and the Vatican.