Have the Daughters of Charity Made a Deal?

Don’t hold your breath, but the Daughters of Charity Health System (DCHS) in Los Altos, California may have found a buyer. Sure, the Board chose BlueMountain Capital Management LLC last July, in favor of its well-publicized $250 million offer to keep the struggling system afloat. And we do mean struggling. Through June 30, 2014, DCHS’s five acute-care hospitals made nearly $1.2 billion in total operating income, but a combined loss of $64.0 million in EBITDA.

Don’t forget that for-profit hospital company Prime Healthcare Services walked away from its $849 million offer for Daughters back in March, accusing the state’s Attorney General, Kamala Harris, of imposing too-onerous conditions. On December 3, Harris approved the deal with BlueMountain, with several similar conditions aimed at preserving the system’s charitable purpose for the next 10 years of the 15-year agreement.

If this transaction closes, the health system’s name will be changed to Verity Health System of California. BlueMountain has tapped Integrity Healthcare to operate the five acute-care hospitals and one skilled nursing facility, as well as DCHS’ medical foundation.

 

 

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