Public outcry thwarts deal

In a derailed deal to buy Christ Hospital, Prime Healthcare Services never learned whether the New Jersey hospital’s assets would be converted to a foundation.

For-profit Prime Healthcare, based in Wildomar, Calif., dropped a $35 million offer for 381-bed Christ Hospital after public outcry over the for-profit takeover of the not-for-profit hospital.

“Prime Healthcare’s decision to withdraw its bid was due to indications from respected local elected officials who wanted Christ Hospital to explore the option of keeping the hospital nonprofit and under local ownership,” the company announced.

Prime spokesman Ed Barrera said in an e-mail that the decision to create a foundation is typically left to the not-for-profit sellers and state attorneys general.

When the Christ Hospital deal collapsed this month, New Jersey’s attorney general had not indicated a foundation would be a condition of the deal, he said.

Opponents of the for-profit suitor included the New Jersey Appleseed Public Interest Law Center, whose executive director, Renee Steinhagen, wrote in an editorial for the Star-Ledger that “four of the county’s hospitals would have been owned and operated by for-profit entities” and “no longer dedicated solely to delivering quality and affordable health care services to their patients.”

For Christ Hospital, the collapse of the deal was quickly followed by a bankruptcy filing. “This reorganization process will ensure that Christ Hospital will continue to serve the Hudson County community as an acute-care facility,” the hospital said on its website.

The hospital would have been unable to meet payroll in late January without $1 million from Prime Healthcare. When Prime withdrew its bid, the hospital lost any future financial support, according to court documents.

The hospital ended 2011 with liabilities of $70 million and assets of $50 million, following a recent pension settlement, court records said. The hospital’s operating loss for the year totaled $3.1 million on revenue of $144 million.

The bankruptcy court may see more offers for the distressed hospital. Hudson Hospital Holdco, a for-profit with principals who own the 150-bed Bayonne Medical Center and 364-bed Hoboken University Medical Center, made an unsolicited $91.6 million offer in December. A month later, 269-bed Jersey City Medical Center, a not-for-profit hospital, and Community Healthcare Associates, a healthcare real estate developer, came forward with a $104.4 million offer.