Council passes resolution in support of Southern California Hospital Workers

In light of Southern California Hospital’s corporate owner filing for bankruptcy, the Culver City Council passed a resolution on August 11 expressing their support for the protection of the workers’ conditions and maintaining standards of care for patients. The resolution was proposed to highlight the importance of protecting union jobs during a time of uncertainty about the future ownership of Southern California Hospital.

Several speakers clarified that the current management of Southern California Hospital has been addressing many of the issues outlined in the resolution. While there was some hesitation from the city council with intervening on an issue that could be solved internally within the hospital, the majority of the council members agreed that Culver City has an interest in ensuring that the workers at the city’s only hospital know they are supported.

Southern California Hospital Culver City is one of 16 hospitals owned by Prospect Medical Holdings, Inc. (PMH), a private equity company that was recently connected to a Senate Budget Committee probe stemming from concerns about equity owned healthcare prioritizing profit over patient care, leading to hospital closures. 

Management of Southern California Hospital, however, received praise from both PMH and Southern California Hospital workers alike. Human Resources Leader of Prospect Medical Holdings, Justin Sischo, commented that the hospital maintains a strong collaborative relationship with both of their unions — Service Employees International Union-United Healthcare Workers (SEIU-UHW) and California Nurses Association (CNA) — with monthly meetings that help to quickly resolve issues. 

Ferdi Malinao, a nurse who began his career at Southern California Hospital, was concerned about the message the resolution would send.   

“I do not wholeheartedly agree with [the resolution],” Malinao said during his comments. “It is creating unnecessary fear and disruption among staff. We have transparent leadership that engages with us daily, and [the resolution] undermines that trust.”

Other speakers who attended the meeting urged the city council to pass the resolution, hoping that the city would adopt an official position of support for the workers in the wake of a potential sale. Kathleen Pittman, a healthcare worker who has worked at Southern California Hospital for 25 years, expressed her surprise that the hospital would not back the resolution.

“[Southern Californian Hospital staff] have been under the impression that we share the same position as our employer, which is for Prospect to maintain ownership of the hospital,” Pittman commented. “This resolution is simply stating that union jobs are good for Culver City, and the city cares about protecting these jobs.”

The January 2025 US Senate Budget Committee report that set off the chain of events leading to last Monday’s discussion was a bipartisan effort headed by Senators Charles Grassley and Sheldon Whitehouse. It shined a light on the necessity of maintaining working conditions and focusing on patient outcomes, while highlighting those that had failed to do so.

Their investigation found that the main goal of Leonard Green & Partners, the private equity firm that owned a majority stake in Prospect Medical Holdings from 2010 to 2021, was to make a profit rather than give quality patient care, leading to health and safety violations, understaffing, and hospital closures.

The private firm’s financial and operational mismanagement led to Prospect Medical Holdings paying out $645 million in dividends and preferred stock redemption, with Leonard Green shareholders taking home $424 million. The report concludes that their management of finances resulted in Prospect Medical Holdings running out of cash and defaulting on their loans. 

On January 11 — just four days after the report was released — PMH filed for Chapter 11 bankruptcy, which provides time for the corporation to submit a long term reorganization plan to pay back creditors and implement it under court supervision. 

Prospect Medical Holdings was granted interim approval by the Bankruptcy Court to access new money term loans in an aggregate principal amount of $100 million with $29 million immediately available. With an additional interim approval to a revolving credit facility with eCapital Healthcare Corp., PMH expressed their intent to continue operating and paying employee wages and benefits. 

While filing for Chapter 11 bankruptcy provides some relief to Prospect Medical Holdings, this does not guarantee that the corporation will be able to overcome their financial difficulties. According to a study done by the Health Services Management Research journal, navigating bankruptcy proceedings often includes downsizing the hospitals and reducing the workforce, which adds more pressure on remaining employees. 

The resolution by Culver City would not influence the hospital’s policies, but would show support for the workers in a slightly more official context. By offering a resolution of support on this issue, the city ensures that the workers remain in the conversation and spread awareness about their concerns.

Councilmember Bubba Fish, who relayed the news about PMH’s bankruptcy and proposed the resolution at the May 27 council meeting, reiterated the necessity in supporting workers during his comments at the meeting. 

“At a time when union jobs are becoming unfortunately more and more rare and this [federal] administration is in an all-out assault on workers on so many fronts, I can’t think of a reason we wouldn’t want to support the workers of our city,” Fish stated. “[The resolution] doesn’t change policy, but clearly by the turnout and the words shared in this room tonight, it is meaningful to know that your city has your back.”

While the majority of the council supported the resolution, there was some uncertainty about the effects the resolution might have. Councilmember Albert Vera expressed concern about the city’s involvement in the affairs of private businesses.

“We want to support our workers,” Vera said, “but if it creates conflict within the organization, that’s not accomplishing anything either.”

The motion to approve the resolution eventually passed after an amendment by Vice Mayor Freddy Puza acknowledging the progress Southern California has made in improving patient care, working conditions, and in protecting union jobs.

The resolution passed with three ayes from McMorrin, Fish, and Puza. Vera and Mayor Dan O’Brien abstained from voting on the motion.