El Camino Hospital plans to buy five clinics in Santa Clara County at risk of closure after Verity Medical Foundation filed for bankruptcy last year.
The sale, if approved, would further strengthen the Mountain View-based hospital's expansion outside of the North County area, which has long been a priority for El Camino officials. Union leaders are urging El Camino to preserve the jobs of 180 clinic employees who face layoffs starting next month.
El Camino Hospital's board of directors is scheduled Wednesday to vote on a resolution approving the "acquisition and establishment" of five clinics, which would be purchased from Verity through a bankruptcy court by Silicon Valley Medical Development (SVMD), a wholly owned subsidiary of El Camino. The intent is to buy the assets and re-open them as new clinics to "serve communities affected by the closures," according to a SVMD statement released last week.
"We believe this would be a positive solution to a difficult situation and best serve our community's health care needs," SVMD president Bruce Harrison said in the statement. "These are dedicated physicians with loyal patients in need of a new operating partner that shares their mission and vision to provide the best care possible."
Verity filed for bankruptcy protection in August last year, casting uncertainty on the health system's six hospitals and network of clinics. Santa Clara County's Board of Supervisors agreed in December to purchase two of those hospitals -- O'Connor Hospital in San Jose and St. Louise Regional Hospital in Gilroy -- which was briefly blocked in a legal challenge by the state Attorney General last month. A Southern California company, KPC Group, is seeking to purchase the other four hospitals for $610 million.
But neither deal included nine clinics owned by Verity, five of which are located in San Jose, two in Morgan Hill and one in Gilroy. In a letter to local health care workers' union SEIU-UHW last month, Verity's Chief Human Resources said the company plans to cease operation of the clinics -- barring a sale of assets or an agreement with a third party. Employees who face losing their jobs include medical assistants, technicians and technologists to clerical staff and housekeepers.
The idea that El Camino may buy the clinics dates to at least Feb. 1, when Verity's human resources department told employees they are "welcome" to apply for positions available with SVMD, indicating to union leaders that a sale was imminent. SEIU members announced they are planning to attend the Feb. 13 El Camino Hospital board meeting to urge hospital leaders to protect the jobs currently on the chopping block.
Over the last week, a growing chorus of elected officials in the Bay Area have called on El Camino Hospital's board to rehire and retain the employees at the clinics it purchases, noting that the roughly 180 employees include "seasoned health care givers" with a history of providing pediatric and elderly care for more than 20 years. A joint letter on Tuesday signed by U.S. Reps. Anna Eshoo, Zoe Lofgren and Jimmy Panetta states that patients relying on the San Jose clinics deserve the "best of care" achieved by continuity of caregivers.
"We ask the board to fully consider retaining all current employees in their current positions or comparable position following the transition to El Camino, and request that this critical issue be discussed at your upcoming board meeting," the letter said.
Three San Jose elected officials -- Santa Clara County Supervisor Dave Cortese and San Jose City Council members Sergio Jimenez and Magdalena Carrasco -- sent similar letters to the hospital's board with the goal of preserving the jobs of existing clinic staff, rather than having those staffers reapply for their jobs.
Hospital spokeswoman Kelsey Martinez said the proposed asset purchase agreement between Verity and SVMD does not include the transfer of existing employees. She said the union's press release also incorrectly states that El Camino Healthcare District -- a taxpayer-funded public agency that does not employ staff or directly operate clinics and hospital campuses -- is expected to directly buy the clinics.
Although the resolution to buy the clinics is on the board agenda, the document itself was missing from El Camino Hospital's website as of Monday morning, leaving it unclear which five of the nine clinics the hospital intends to purchase through SVMD. The estimated cost of the purchase has not been revealed, though board members are scheduled to talk about the acquisition plans in closed session the same evening.
El Camino has been on an expansion spree in recent years, opening a clinic in San Jose on Winchester Boulevard and, more recently, negotiated a lease to open a 14,300-square-foot clinic at 4130 N. First St. in San Jose. The latter is expected to cost the hospital $8 million to construct and furnish.
Dwarfing both clinics is the hospital's purchase of nearly 16 acres of vacant land in South San Jose in 2016. Board members have yet to discuss publicly what the land will be used for, and whether it could be El Camino's third comprehensive hospital campus.
The Wednesday meeting will be held at 5:30 p.m. in the ground-floor conference rooms of the Main Hospital building, located at 2500 Grant Road. Action on the proposed resolution is set to come after a lengthy closed session in the middle of the meeting and is scheduled to start at 9:13 p.m.