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Buyer Defends Sale Of Saint Michael's Medical Center Amid Controversy

NJ.com — Wednesday, November 12, 2014

Naomi Nix | NJ Advance Media for NJ.com

NEWARK — The proposed for-profit buyer of Newark's Saint Michael's Medical Center defended its record today in the face of an onslaught of criticism from some activists.

Prime Healthcare Services issued a statement today saying the opposition against the purchase of the struggling medical center was about politics not medicine.

"A careful and thorough review will show that Prime Healthcare is the right partner," said Edward Barrera, Prime Healthcare Services's director of corporate communications.

"We are already improving St. Mary's Hospital in Passaic and plan to do the same elsewhere in New Jersey."

Barrera's statement came just hours after Newark mayor Ras Baraka and group of activists and labor leaders held a press conference today to criticize the deal.

The activists issued a host of criticisms including that Prime Healthcare Services has a reputation for dropping insurance carriers, charging expensive out-of-network procedures and decreasing the amount of the charity medical care it offers.

"This deal should be renegotiated with a better buyer" said India Hayes Larrier, a New Jersey Citizen Action group organizer. "Go back and do this again."

But Barrera said the deal will save a struggling hospital to meet Newark residents' health care needs.

"It's unfortunate that Newark Mayor Ras Baraka has taken a position against the sale without even meeting with any Prime representative. We agree with Mayor Baraka in that Newark cannot afford to have another hospital close," Barrera said.

"If those opposing the acquisition get their way, Saint Michael's will likely close or be a shell of itself, certainly hundreds of well-paying jobs will vanish and Newark residents will once again be shortchanged."

But Baraka said in statement Wednesday that Prime Healthcare Service

"They never attempted to come in this office and lay out a plan or strategy. We have a contract that says they plan to do other than what they stated," he said.

"One of their first plans of business should've been to meet with the Mayor of the city, our Dept of Health and our healthcare partners."

Barrera said the healthcare company plans to maintain all the services St. Michael's currently offers, maintain in-network status with managed health plans and keep the emergency department and other services open for 10 years or longer.

The California company has never sold a hospital and is planning to invest $30 million in equipment upgrades and capital improvements at Saint Michael's, Barrera said.

But Baraka said details of such investment should make it into the contract.

"If they are committing to maintaining services, avoiding layoffs, and investing in the community of 10 years or more lets see that in a contract form with appropriate signatures," Baraka said.

Prime's pledge for capital investment was one of many reasons Saint Michael's Medical Center chose the company as its buyer, the center said.

"We selected Prime Healthcare as the most viable option to financially stabilize and secure a vibrant future for the medical center, ensuring it not only remains open as an acute-care facility, but also grows and prospers," the medical center said in a statement.

State health officials are currently reviewing the sale to Prime Healthcare Services.

The California-based firm has offered to buy the struggling hospital for $43 million, which is more than $20 million less than was originally offered.

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