Kansas Approves Sale of Two Charity Hospitals to Prime

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The attorney general of Kansas has reached an agreement with Prime Healthcare Services Inc. to allow it to acquire two Catholic charity hospitals — the 400-bed Providence Medical Center in Kansas City, and the 80-bed St. John Hospital in Leavenworth.

Prime Healthcare is known as a turnaround expert for ailing hospitals. According to tax filings, both of the acute care hospitals run by the Sisters of Charity of Leavenworth Health System, Inc., had been losing money.

The Ontario, Calif.,-based hospital management company has faced opposition in its effort to grow through acquisitions from the Service Employee International Union-United Healthcare West (SEIU), which opposes a for-profit organization taking over charitable hospitals. A SEIU representative attended a public hearing about the proposed acquisition and spoke against it.

In Kansas, as in many other states, the sale of a charitable hospital to a for-profit requires approval from the state. To get this approval, a review board set up by the Kansas Attorney General’s Office had to first confirm that the sale price was reasonable and that Prime was the highest bidder. Prime then had to sign an agreement with Kansas Attorney General Derek Schmidt to continue providing charitable care in the Kansas City and Leavenworth communities at a level at least equal to that provided by the Sisters of Charity, the previous owner, as well as maintain the community advisory boards for both hospitals.

“The communities in Leavenworth and Wyandotte Counties rely on the services provided by these two hospitals,” Schmidt said in a press release. “Keeping them open so they continue to provide health care services was clearly the top priority for the affected communities, and the new owner’s additional binding commitment to continue listening to community input and to maintain charitable care confirm that this sale is a satisfactory option.”

In addition, Prime said in its press release that it has committed to maintain current acute-care and emergency department services at both campuses for at least five years and provide at least $10 million toward capital and other investment projects over the next five years.

"Prime Healthcare understands how important these acute care hospitals are to the residents of Wyandotte and Leavenworth counties and intends to help the facilities provide the high quality of health care that they deserve." said Prem Reddy, MD, FACC, FCCP, chairman, president and CEO of Prime Healthcare Services in the press release.