Is PHS better for VHS than PHH?

While the Valley Health Systems (VHS) directors continue to meet with the local physicians, another offer has been delivered to board President, Dr. William Cherry.

Prime Healthcare Services, Inc (PHS)., Chino, CA, sent a letter of interest in acquiring VHS. Several pages of the letter are shown below. If you are interested in the whole missive, just send an email (no donations necessary).

Actually, Michael Sarrao, vice president and general counsel for PHS, was present at the VHS board meeting on July 27. He told the board then that PHS was interested in the acquisition and would be submitting a letter.

Notice that Thomson - Reuters has designated PHS in the top ten hospital systems in the U.S. that seems like a good organization to run a local hospital.

Universal Health systems submitted a letter of interest about two weeks ago, so the board has at least three groups interested in its assets.

Nevertheless, the directors felt it was in their responsibility to open exclusive negotiations with Physicians for Healthy Hospitals (PHH). The local docs seem to rely on their longevity and the threat of a mass exodus if a firm purchased the VHS assets.

While some physicians may pack and move, it is hard to believe that many will. It is already clear that the valley won’t become a medical wasteland. Businesses will always fill a vacuum where the demand exists. Only a month ago, ADR Associates announced plans for a new hospital in San Jacinto.

If the existing physician corps decides to vacate, a new hospital and equipment should attract a replacement cadre of new and younger physicians.

Since the board has shown no interest in comparing offers and trying to maximize the benefit to the district’s owners — you the voters — we’ll have to wait see the results of the Aug. 18 bankruptcy hearing and the confidential deal being negotiated with the docs.

I have to acknowledge that the founder of PHS is Dr. Prem Reddy, who has been know to be invovled in controversial medical business deals. Nevertheless, PHS has garnered some national recognition.