Deeply in debt and struggling to stay open, Saint Michael’s Medical Center of Newark put itself up for sale two years ago and accepted a $65 million offer from Prime Healthcare Services of California.
Weeks later, however, Prime took a closer look at Saint Michael’s books and concluded they revealed “burdensome and inflexible” labor contracts, HMO rates “significantly below market price,” and two doctors earning more than $500,000 annually.
The for-profit hospital chain slashed its offer to $50 million, then to $43 million in January after analyzing Saint Michael’s operations and unpaid bills, according to documents under review at the state Attorney General’s Office, which must approve the sale.
While there are months of government scrutiny and negotiations ahead before a final deal is approved, one thing is clear: New Jersey taxpayers will be socked big-time when all is said and done.
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