Potential hospital sale has officials in holding pattern: County promised $11.5 million for seismic retrofit for Daly City facility

“Until that is resolved, it’s pretty hard to answer what will happen,” said County Manager John Maltbie.

The Board of Supervisors earlier this year committed $11.5 million in Measure A half-cent sales tax revenue to Seton Medical Center for mandatory seismic upgrades at the Daly City hospital. Seton and DCHS donated more than $1.5 million to the pro-Measure A committee. The contributions provided the lion’s share of the funds used to pass the half-cent sales tax measure. The allocation agreement is predicated on Seton continuing its provision of safety net services at current levels and using no less than $2 million on the state-mandated seismic fixes. Seton is also currently working on a strategic business plan, half funded by the county, on which a longer-term arrangement — if still valid depending on the potential sale — will be based.

Maltbie said the agreement between Seton and Health Plan San Mateo commits the funds through the end of this fiscal year and, since any Daughters of Charity sale is unlikely to finalize before June 30, 2014, he anticipates honoring that arrangement without amendment.

“So long as Seton continues to operate under that provision I see no change,” he said.

Meanwhile, Maltbie said he has asked Health Plan San Mateo and the Health System to look at contingency planning so that there will be alternative plans available if the new owner does not operate the hospital or operate it under the same terms.

Health System Chief Jean Fraser called Seton’s commitment to patient care at all income levels a great asset and she hopes for a purchaser with the same resolution.

“Should that not happen, however, the Health System, along with other providers, will do our best to ensure that patients' needs are met elsewhere in the community,” said Fraser in a prepared statement.

For its part, the Daughters of Charity Health System said in its Monday sale announcement it is seeking potential buyers sharing its vision to protect the existing care and jobs. The Board of Directors said it is soliciting proposals from Catholic, public, nonprofit and for-profit groups. The hospital had been mulling a permanent merger with Ascension Health but opted instead for a chain-wide sale after the idea fizzled.

“[T]he realities of modern health care are harsh, and after prayerful discernment, it became clear that the responsible thing to do is to find new ownership, blessed with the resources necessary to thrive,” said board Chair Sr. Marjory Ann Baez in a prepared statement.

DCHS did not disclose an asking price.

The system’s financial challenges were a factor in San Mateo County officials’ decision to include aiding private Seton hospital with state-required infrastructure upgrades using public money. The county’s public hospital, San Mateo Medical Center, is located in San Mateo and clinics are located throughout the county including one in Daly City. However, Seton Medical Center also accepts a large number of the county’s indigent and serves the northern end so officials were concerned that its possible shuttering would further tax the overall Health System and leave patients without easy access to care.

Those same worries now shadow the potential sale of Seton and Seton Coastside in Moss Beach. Each facility is also a large employer in their respective locations which adds economic concerns on top of health care issues.

Like his county counterparts, Daly City Mayor David Canepa is also hopeful the potential sale does not lead to the loss of Seton. Maintaining a medical facility is priority number one for the city, he said, but on the off chance the real estate is sold for another use he said a corporate campus akin to Genentech or Amgen would bolster Daly City’s bottom line.

Both economic and health pieces are also concern for county Supervisor Adrienne Tissier whose district includes Seton Medical Center. Tissier, who said she personally uses Seton for its convenience, is taking an optimistic approach to the future although she concedes there are scenarios that would tax the health system and create a large void. Although Seton’s financial challenges were no secret, Tissier said she was surprised to learn the sale was of all the DCHS hospitals.

“I never thought it went quite this far,” she said.

michelle@smdailyjournal.com

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