Paradise Hospital to be sold

[Adventist News]

DATE: October 30, 2006

PRIME HEALTHCARE SERVICES TO

ACQUIRE PARADISE VALLEY HOSPITAL

Prime Healthcare Services, Inc. (PHS) announced today it has signed a letter of intent to acquire Paradise Valley Hospital, a 301-bed facility in National City, Calif. The for-profit health care management company, which owns and operates seven acute care facilities elsewhere in Southern California, has committed to continue operations of the Adventist Health hospital. PHS will maintain all the existing patient care services including the Emergency Department and the current levels of charity care at the hospital.

The sales agreement includes the main physical plant, sitting on more than 30 acres in San Diego?s South Bay, as well as the Bayview Behavioral Health Campus and South Bay Rehabilitation Center. Under the agreement, substantially all of the hospital?s current employees will be offered employment with the new owner when the sale is finalized.

Careful study by the Adventist Health Board of Directors over an extended period of time has led to this decision, and it approved the potential sale subject to the State of California Attorney General?s consent. If authorized by the AG, the ownership transfer is projected to take place during the first quarter of 2007.

?PHS will continue to operate the hospital under the same long running tradition of community service established by Adventist Health over one hundred years ago,? said Prem Reddy, MD, Chairman of the Board of PHS.

In the interim, the facility will operate as usual. The pending transaction will have no effect on any scheduled patient appointments or surgeries. Any patient with a question or concern may call the hospital at 619-470-4130.

[Adventist News]

PVH SALE LINKED TO FINANCIAL ISSUES

A story filed on October 31, 2006, in the San Diego Tribute states that "financial losses in caring for the poor have compelled nonprofit Adventist Health to sell Paradise Valley Hospital in National City to a for-profit hospital chain." The article stated that "Paradise Valley is a cornerstone provider of care to the poor in San Diego County. More than half of its patients are uninsured or covered by Medi-Cal." The hospital sustained a loss of $4.7 million in 2005, and in the first two quarters of 2006, it lost an additional $3 million.

Robert G. Carman, executive vice president for Adventist Health, is reported to have said that the network's board decided to sell Paradise Valley Hospital after it re-evaluated its operations a year ago. "There's only a certain amount of capital to invest in health care in California, and our corporate board decided to put that capital where we have the strongest opportunity for success," he said.

The 301-bed Paradise Valley Hospital would become the largest owned by Prime Healthcare, if approved by California State. Prime Healthcare is owned by physicians Prem and Vankamma Reddy of Victorville and four other family members.

Paradise Valley has 300 physicians on staff and 1,515 employees. The facility treats about 13,000 inpatients, sees 40,000 patients in the emergency room and treats 307,000 outpatients a year. Reddy said all physicians will retain staff privileges and employees will keep their jobs.

--Kit Watts, Communication Department

Southeastern California Conference 11-1-06