The sale of the beleaguered Seton hospital system advanced with the state Attorney General’s Office conditionally blessing a proposed deal for AHMC Healthcare to purchase the medical centers in Daly City and Moss Beach.

The office of Xavier Becerra consented Tuesday, July 28, to allowing Verity Health of California to sell Seton Medical Center and Seton Coastside, so long as the Southern California buyer accepted a lengthy list of operational terms.

The announcement advances an initial agreement made in April, when the U.S. Bankruptcy Court allowed AHMC Healthcare to purchase the two San Mateo County sites for $40 million.

County Supervisor David Canepa expressed optimism the buyer would accept terms of the deal, potentially yielding some stability for the hospital system which has been teetering for years.

“It is highly likely they will accept, which is good for the community and the hospital,” said Canepa.

Financial uncertainty has long loomed over Seton Medical Center, Daly City’s largest employer, casting doubt on those depending on the hospital serving some 28,000 emergency room patients a year.

Estimated previously 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% of the patients the Seton Medical Center sees every year are on Medicare or Medi-Cal, Canepa has said.

Since the pandemic struck, the Daly City site has accommodated COVID-19 patients under an arrangement made with state lawmakers. More recently, San Quentin State Prison inmates who contracted the coronavirus have received care at the facility.

The 116-bed coastside hospital, a skilled nursing facility, offers the only standby emergency department along the 55-mile coastal stretch between Daly City and Santa Cruz.

The county Board of Supervisors have invested roughly $40 million over recent years to keep it operating through a challenging financial stretch. In 2015, Verity purchased the local hospitals along with four others from the cash-strapped Daughters of Charity. Though at the time a pledge was made to keep the sites running through 2025, the operator announced bankruptcy in 2018 — throwing into question the future of the system’s assets.

And while Canepa is hopeful the new deal could offer the system a lifeline, he noted it is not out of the woods yet.

Conditions of the sale require AHMC to maintain a variety of services such as cardiac and critical care and well as women’s health and other programs at Seton Medical Center.

For the coastside facility, the operator must maintain all the skilled nursing beds and a 24-hour emergency department with at least seven stations, according to the conditions list.

For the next six years, the system must also provide more than $1 million worth of charity or free care services to those who are uninsured, have inadequate insurance or are ineligible for government insurance.

AHMC is also expected to maintain privileges for existing staff and personnel in the Seton system and partnerships which connect the facilities to the community, according to the terms.

In a public statement released when the sale deal was struck, AHMC officials pledged to preserving the facilities providing critical care to San Mateo County residents.

“AHMC, along with the close collaboration we have developed with the Allied Physicians Medical Group, looks forward to ensuring that the community continues to be well-served by the high-quality, accessible medical care that Seton and Seton Coastside provide,” said Eric Tuckman, spokesperson for AHMC, which operates several other medical facilities in Southern California.

Looking ahead, Canepa said he believed the deal could be officially consummated sometime in August.

“I’m optimistic about the hospital. I’m optimistic about the ownership. But what I’m looking forward to is making sure that we can do this for 10 to 15 to 20 years and end having this transfer of hodge-podge ownerships every few years,” he said. “That’s not good and we have to get out of that.”

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(1) comment

Christopher Conway

What happens to the $20 million County Supervisors approved in March for the hospital? Kind of important.

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