No Sale

By Melody Petersen
March 12, 2015

The founder of Prime Healthcare Services Inc. defended his decision to pull out of a deal to buy six Catholic hospitals, saying critics were wrong to suggest that he placed profit over patients.

“It’s the most callous and irresponsible statement,” said Prem Reddy, a cardiologist who founded the Ontario-based hospital chain in 2001. “It has nothing to do with profits.”

For more than a year, Reddy and other executives at Prime had worked on the deal with Daughters of Charity Health System, which owns the six financially struggling hospitals, including two in L.A. County.

But on Tuesday, the deal collapsed when Reddy walked away, saying that Atty. Gen. Kamala D. Harris had put conditions on the sale that made it financially impossible.

Harris had lashed out at Prime, saying that by walking away, the company was confirming longtime concerns “that the continuity of vital healthcare services in these communities is not its priority.”

Reddy said in an interview with The Times on Wednesday that Harris was wrong about the company’s intentions. He pointed out that Prime now has 34 hospitals and has never closed a hospital it has purchased.

“This is about delivering quality care,” he said, “that is sustainable in these communities.”

Reddy said he was still interested in buying the six hospitals – especially if they declared bankruptcy.

Daughters Chief Executive Robert Issai has said that bankruptcy is among the options that he and the hospitals’ board of directors are now considering.

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