Santa Clara County has offered to buy three local hospitals for $235 million as part of a bankruptcy reorganization by the facilities’ parent company, Verity Health System.
The county’s bid, which would be considered by the bankruptcy court in December along with other offers, extends to O’Connor Hospital in San Jose, St. Louise Regional Hospital in Gilroy and the De Paul Health Center in Morgan Hill.
County officials have long eyed the local hospitals as additions to the Santa Clara Valley Medical health care system, its overcrowded, highly impacted public safety-net program.
Verity Health’s hospitals in San Jose, Gilroy, Daly City, Los Angeles and Half Moon Bay employ 7,000 people and offer 1,650 inpatient beds. The hospital chain was owned by the Catholic Daughters of Charity until 2015, when the organization sold it off to a hedge fund called BlueMountain Capital Management.
In 2017, the billionaire owner of the Los Angeles Times and San Diego Union-Tribune, Dr. Patrick Soon-Shiong, bought the BlueMountain healthcare division that runs Verity. The debt-burdened company continued to struggle financially and lost $55.8 million from July 2017 through the end of March this year.
The auction may require approval from the California Office of Attorney General, depending on who the potential buyer is.
“O’Connor and Saint Louise are two critically important institutions in the communities they serve, and the County has shown great leadership to ensure both can continue their mission of providing high-quality care to patients well into the future,” Rich Adcock, CEO of Verity Health, said in a news release. “As we advance this sale process through the court, we are continuing to work with other potential buyers for Verity’s remaining assets, so they can be relieved from the financial burdens that impede their service to the community, and they can continue serving patients in their respective communities.”