Daughters of Charity Health System (DCHS) has closed the transaction with BlueMountain Capital Management (BlueMountain) / Integrity Healthcare (Integrity) and has created Verity Health System (Verity) that was approved by California Attorney General Kamala Harris on December 3, saving the six financially-troubled hospitals.
The transaction preserves the system’s mission of care, while protecting labor agreements and pensions for thousands of current and former employees.
Under the terms of the transaction, BlueMountain is contributing up to $260 million of capital and sponsoring Integrity, an entity owned by BlueMountain to manage and Verity’s six California hospitals and Medical Foundation.
“We thank Attorney General Harris for approving the transaction,” said DCHS President and CEO Robert Issai.
Effective immediately, the DCHS hospitals, DCHS Medical Foundation and other subsidiaries are part of Verity, a new, non-religious, not-for-profit California healthcare system governed by a new, independent board of directors. Integrity will provide management services and operational support to Verity for a minimum of 15 years. Verity has pledged to preserve the hospitals’ mission of charity care, honor existing labor agreements and preserve the pensions of over 17,000 current and former employees.
“Verity will proudly continue the mission of care begun by the Daughters of Charity more than 150 years ago,” said Mitchell R. Creem, CEO of Verity Health System. “I am extremely pleased and grateful for the opportunity to carry on this tradition of excellence, with new leadership and significant investments.”
Daughters of Charity Health System (DCHS) is a regional health system spanning the California coast from the San Francisco Bay Area to Los Angeles. DCHS organization includes: Seton Medical Center, Daly City; Seton Coastside, Moss Beach; O’Connor Hospital, San Jose; Saint Louise Regional Hospital, Gilroy; St. Vincent Medical Center, Los Angeles; St. Francis Medical Center, Lynwood; and the DCHS Medical Foundation based in San Jose.
DCHS was formed in 2002 in response to the health care needs of the people of California, especially those living in poverty. Every day, more than 8,000 associates and physicians serve patients and their loved ones, providing quality, compassionate care – body, mind and spirit.