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El Camino Hospital is moving to buy Community Hospital of Los Gatos, hospital executives announced, with plans to take over the property and all medical operations beginning June 1.
The $43 million purchase was presented by El Camino Hospital officials as an opportunity to revive medical services at the Los Gatos hospital, which has seen its reputation sag in recent years. The two hospitals already have entered into an agreement, officials said, and the deal should be
finalized on June 1, when El Camino staffers begin managing the 143-bed facility.
“There was a time when Community Hospital of Los Gatos enjoyed a reputation of being a preferred provider,” said Jon Friedenberg, president of the El Camino Hospital Foundation. “Our goal would be to return Community Hospital to a place where physicians and patients want to go.”
Tenet HealthCare Corporation previously ran Community Hospital, but decided not to renew its lease this year, according to Friedenberg.
El Camino bought the land and building from Healthcare Properties, and has appointed Eric Pifer, El Camino’s chief medical officer, to be president of the Los Gatos hospital.
The two hospitals are less than 15 miles apart, and Friedenberg said many physicians and patients use both facilities. Since there is an overlap, he said, the purchase “was an opportunity to increase services” and strengthen the organization, which is important during the economic downturn.
“With this new Los Gatos location, we will be better able to serve people in the communities such as Campbell, Cupertino, Los Gatos, Saratoga and San Jose, many of whom have already chosen El Camino for their care,” El Camino CEO Ken Graham said in a press release. “As a not-for-profit, we are able to reinvest resources within Silicon Valley as well as improve and grow programs and services.”
Friedenberg summarized this sentiment: “Having a hospital that serves from Los Gatos to Palo Alto will strengthen the organization.”
According to Pifer, El Camino used funding from operational reserves to buy the new building, and no property taxes went toward the purchase. Pifer said he has begun assembling a transition team that is still working on a clinical program. The transition team “wanted to get down to Los Gatos and see what the needs are,” he said.
Officials at Community Hospital of Los Gatos refused to comment on the deal, referring calls to Healthcare Properties. Representatives there could not be reached by press time.
Once the transition is complete, both hospitals will offer basic services, and local residents will have access to specialties at Los Gatos and El Camino. Pifer said the Community Hospital is recognized for its orthopedics, maternal and vascular surgery care.
“We are going to take some good things from Los Gatos and bring them to Mountain View,” Pifer said. “We are going to run the two hospitals as an integrated system.”
The announcement comes as El Camino is building a new $452 million hospital on its property in Mountain View. Construction began on the facility in 2006 in order to meet new state seismic regulations, and the new facility, spread out over about 460,000 square feet on five floors, will have private rooms and baths equipped with wireless technology for each of its patients. It is scheduled to open next fall.
