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Analysis

California AG Blocks Sale of 2 Santa Clara Hospitals, Officials Respond

By Jack O'Brien  
   January 24, 2019

Santa Clara County officials and health system staff criticized California Attorney General Xavier Becerra's requested stay of the sale of two at-risk community hospitals.

The recent decision by California Attorney General Xavier Becerra to halt the planned $235 million sale of two financially struggling hospitals to Santa Clara County has been met with derision from local leaders and staff at both facilities.

County officials held a press conference Thursday afternoon to discuss the financial and clinical implications of Becerra's motion to request a stay on the sale of O'Connor and Saint Louise hospitals, located in San Jose and Gilroy, respectively.

Advocates for the deal, which was approved by U.S. Bankruptcy Court in Los Angeles in December, argue that Becerra's decision to block the sale to Santa Clara could result in the closure of both hospitals.

Becerra counters that the County has not agreed to specific conditions that would ensure protected healthcare access for its 2 million residents, according to The Mercury News.  

Related: California's Top Lawyer Cements His Role as Healthcare Defender-in-Chief

At the press conference, Miguel Márquez, COO of Santa Clara, stated that the county was the only available buyer for the two hospitals and that the municipality is not "out to make a profit" on the purchase. 

Márquez added that if the deal fell through, the county would lose 451 beds between the two hospitals and thousands of clinical staff would become unemployed. He also predicted that pressure on other local health systems to handle additional patients would rise as a result of the closure. 

The parent company for both hospitals, Verity Health System, is selling the facilities after filing for bankruptcy in August and openly considering selling four other California hospitals over the summer.

The purchase agreement requires the deal to close by March 4, according to The Mercury News, and a hearing to consider Becerra's stay request is set for January 30.

Related: Verity Health's Deep-Pocketed Savior Failed. Here's Why.

Jack O'Brien is the finance editor at HealthLeaders, a Simplify Compliance brand.

Photo credit: SACRAMENTO, CA/U.S.A.-APRIL 10,2018. California Attorney General Xavier Becerra speaks after receiving the Leadership Ally Award from Equality California for his support of the LGBTQ community. - Image / Editorial credit: Chris Allan / Shutterstock.com


KEY TAKEAWAYS

Santa Clara County officials argue that if the sale is halted, the two facilities will shutter.

California Attorney General Xavier Becerra said the county has not agreed to certain provisions ensuring protected healthcare access.

The appeal hearing is set for January 30, ahead of the March 4 deadline for the deal to close.


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