DOWNEY - After a brief period of negotiations, the Daughters of Charity Health System has officially ended talks with Downey Regional Medical Center calling a potential acquisition of the hospital economically unfeasible.Downey Regional received word last Friday from Daughters of Charity Health System President and CEO Robert Issai, who expressed regret for the decision, calling Downey Regional Medical Center a "diamond-in-the-rough." In a released statement, Issai wished Downey Regional, which filed for bankruptcy last September, "success in finding a partner who will ensure its viability in this increasingly complex health care market." Rob Fuller, executive vice president and chief operating officer for Downey Regional, echoed Issai's statements, while remaining hopeful for the future. "We are disappointed that Daughters of Charity Health System chose not to move forward," said Fuller. "But we understand their priorities are with their existing system hospitals. We are fortunate to have several other interested parties, and we have already reached out to them to initiate affiliation discussions." Downey Regional would not reveal which interested parties it has approached, but Fuller is confident that the 90-year-old hospital will affiliate with a system, gain support for its creditors and emerge from bankruptcy in the early summer. The Daughters of Charity Health System, a regional health care organization based in Los Altos Hills, began exclusive negotiations with Downey Regional in February after the hospital's boards of directors voted unanimously to execute a letter of intent for affiliation with the medical group. According to Patricia Smith, public relations manager for Daughters of Charity, the timing was not good for the health system. "We went through very vigorous and complete negotiations with Downey Regional Medical Center, but our board of directors felt it was not financially feasible at this time," said Smith. "It's a tough, tough economy, especially for health care - we just hope they pull through and that community has the service it deserves." Despite bankruptcy, the 199-bed hospital has continued to operate at normal capacity, providing its full range of services, something Downey Regional's president and CEO Kenneth Strople guarantees. "I want to reassure our patients, our employees, the physicians, and the community that Downey Regional Medical Center and its services will continue to be fully open as we continue through the reorganization process," said Strople.

********** Published: March 19, 2010 - Volume 8 - Issue 48