Closing Preserves Mission of Care, Union Contracts and Worker Pensions
(Los Altos Hills, CA – December 14, 2015) – 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, 2015, 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. “This large infusion of capital will provide a great jump-start on the many strategic, operational and capital initiatives desperately needed in our hospitals.”
Issai praised the success of the transaction as a group effort, resulting from the “hard work and close collaboration between BlueMountain, Integrity and DCHS leaders, as well as many hospital associates, physicians, volunteers and advisors.”
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.” Creem has over 30 years of experience in health care management, leading several hospitals across the country through successful financial and cultural transformations.
“Today is a great day for our communities, our hospitals and our employees, past and present,” said Issai. “Our hospitals are in good hands.”
For additional information contact:
Verity Health System