Seton offer spells relief for officials

The financial uncertainty looming over Seton Medical Center, Daly City’s largest employer, has weighed heavily for those depending on the hospital serving some 28,000 emergency room patients a year, said Supervisor David Canepa, who represents north county’s District 5 on the Board of Supervisors. Estimated to serve 1.5 million residents in both San Mateo and San Francisco counties with a range of medical, surgical and emergency services, some 85 percent of the patients the Seton Medical Center sees every year are on Medicare or Medi-Cal, Canepa said previously.

A skilled nursing facility, the 116-bed coastside hospital offers the only standby emergency department along the 55-mile coastal stretch between Daly City and Santa Cruz, according to Verity Health.

With many fearing Seton Medical Center may close and no interested buyers would step forward, Canepa said news of the bid has been cause for celebration even as he acknowledged the long road ahead to ensure they remain open.

“This is an exciting day,” he said. “In our community, people are relieved, but … this is a marathon. … This is not done.”

The motion Verity Health filed in the U.S. Bankruptcy Court in Los Angeles Friday seeks bankruptcy court approval to initiate a sale process of Verity Health’s remaining four hospitals. It follows an October bid on behalf of Santa Clara County to acquire two of Verity Health’s other hospitals, O’Connor Hospital in San Jose and Saint Louise Regional Hospital in Gilroy.

Though Santa Clara County’s bid for the San Jose and Gilroy hospitals was approved by the U.S. Bankruptcy Court in Los Angeles Dec. 27, it has since been appealed by Attorney General Xavier Becerra, who has asked for the existing conditions protecting the health and safety of the hospital community to be preserved.

Long history

As part of a 2015 deal in which the New York hedge fund BlueMountain Capital purchased the six hospitals from the cash-strapped Daughters of Charity, service obligations aimed at ensuring the safety-net hospitals continue offering services until 2025 were set by then-attorney general Kamala Harris. The transaction was considered by some to be the largest and most complex nonprofit hospital transaction in California’s history.

“As we have stated before, the California Department of Justice is committed to advocating for conditions that ensure communities have access to essential health care services,” a California Department of Justice representative said in an emailed statement.

Having hoped the Seton facilities could continue to operate, Supervisor Don Horsley welcomed news of the offer. But he also hoped the attorney general would work with the buyer and county officials to re-evaluate the conditions set in 2015 and determine if some of them prove to be onerous to the hospitals’ next owner.

Horsley and Canepa have participated in talks with leaders of the San Mateo County Health System and the Health Plan of San Mateo since Verity Health announced in July it is experiencing financial challenges and may put the six hospitals up for sale. Given the some $250 million in seismic upgrades needed for the Seton Medical Center and the facility’s age, Horsley felt the hospital may only be financially feasible for its next owner if a full replacement and downsizing effort is considered.

“We’re hoping that this new owner ... that they will really take a look and figure out how they would replace the hospital in the future,” he said. “I remain skeptical that, in the long run, it remains viable in the current state.”

Horsley acknowledged both facilities provide critical services that are not provided at many other Bay Area hospitals, noting the Seton Medical Center offers some 40 beds for sub-acute care. He added Seton Coastside provides skilled nursing care for patients from all over San Mateo County and who would otherwise be required to seek care in far-flung places.

Worker, city reaction

Having worked at Seton Medical Center for more than 25 years, Debra Amour participated in a bi-county work group organized to scope next steps for the facilities and said she remained hopeful the facilities would not close in the months following the bankruptcy announcement. But Amour, who is also a member of the California Nurses Association, knows many nurses who have been concerned about the hospital’s future for months, and shared in their relief Friday.

“Knowing that we have a buyer is awesome,” she said. “There’s lots of uncertainty, but it makes me very, very happy to know that Seton will continue serving the community. That is, after all, the most important thing.”

Because the conditions set forth by the attorney general in 2015 are aimed at protecting patients, Amour hoped the provisions would remain intact and said any contracts considered going forward should support patient care.

For Daly City Councilwoman Juslyn Manalo, news of a buyer marked a step in the right direction for the facilities after months of working with residents and officials from both San Francisco and San Mateo counties to explore ways to support them. Manalo served as the city’s mayor when city officials passed a resolution supporting the Seton Medical Center’s land use and zoning for continued hospital use Sept. 24 and has also participated in the bi-county work group.

Having heard from many Daly City residents and employees about the need for the facilities, Manalo was encouraged to see so many come together to protect a community asset.

“This is an initial step that we’ve all been waiting for,” she said. “It’s such a good thing to see after so many conversations and trying to strategize what can be done.”

anna@smdailyjournal.com

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