New management might come to Seton and other DCHS hopitals afterall

Business Wire, 7/17/15.  "Daughters of Charity Health System Board selects BlueMountain to recapitalize six DCHS Hospitals and Medical Foundation. Transaction infuses over $250 million of capital, maintains non-profit status, ensuring hospital's future."

Seton management might shift to Integrity Healthcare

"The Daughters of Charity Health System (DCHS) Board of Directors has selected BlueMountain Capital Management (BlueMountain), a private investment firm to recapitalize its operations.  BlueMountain is contributing over $250 million of capital and is sponsoring Integrity Healthcare to manage and operate the six California hospitals and medical foundation, thus assuring the communities served by the hospitals a continuance of care.

Under the terms of the transaction, the DCHS board will transfer control of the hospitals to an independent board of directors, which will direct hospital operations. Integrity Healthcare, an entity owned by BlueMountain and formed to oversee the hospital group, will provide key management services and day-to-day operational support, while BlueMountain will provide significant new capital investment in the operations and facilities. BlueMountain is a global investment firm with more than $21 billion under management, having made several strategic equity and debt investments in companies and platforms that operate in complex sectors impacted by dynamic change and regulatory pressures, including healthcare facilities.

The transaction, which maintains DCHS and its hospitals as nonprofit entities, includes an option for BlueMountain to purchase the health system after three years. The DCHS board of directors and each hospital’s board of directors approved the transaction unanimously."  Read article.

Submitted by Jim Wagner

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Reference - Integrity Healthcare, "Our Mission:  To provide the highest quality and personalized service to every physician, healthcare provider, and employer we work with."  BlueMountain Capital Management, LLC.  Seton Medical Center, Member of Daughters of Charity Health System. 

Related articles - The Daily News (San Mateo County), Austin Walsh , 7/18/15, "Deal offers Seton new life: Savior willing to rescue threatened health care system" "... Kamala Harris must again consent to the board’s most recent decision, local officials lauded a deal being struck." San Francisco Business Times, 7/17/15, "Saga solution:  Daughters of Charity system to be acquired by new hospital company." Modern Healthcare, Daughters of Charity gets $250M lifeline from private-equity firm."  San Jose Mercury News, 7/17/15. "Daughters of Charity Health System chooses hedge fund as new owner." Los Angeles Times, 7/17/15, "Investment firm offers cash infusion to Daughters of Charity hospitals."      Note photograph/graphic from the Seton Medical Center reference above. 

Posted by Kathy Meeh