Gilroy council backs hospital Daughters of Charity sale

California Nurses Association Labor Representative Phuong Tran passes out signs outside St. Louise Regional Hospital during a vigil to demand the Daughters of Charity Health System be held to its pledge to protect critical hospital services.

GILROY—The Gilroy City Council this week joined a growing list of voices in support of the $843 million sale of Saint Louise Regional Hospital in Gilroy, De Paul Medical Center in Morgan Hill and four others to Prime Healthcare, putting the city squarely in the middle of one of the region’s hottest issues.
District 1 county supervisor Mike Wasserman, however, will not be on the list for or against the sale; he wants the county, who lost a bid to buy, to run the facilities, he told the Dispatch.
Gilroy councilman Roland Velasco, who works for Wasserman, took a strong stand in favor of the sale, bucking his boss and pulling the item off the city council’s rubber-stamp consent agenda at Monday’s meeting so it could be discussed.
“It’s the best option,” Velasco said of the proposed sale. He is employed as a policy aide to Wasserman.
The resolution, passed unanimously Monday night by the seven-member council, reads, in part, “The Daughters of Charity Health System is…in danger of closing its doors if the sale …to Prime Healthcare Services is not approved…the health and wellbeing of Gilroy residents and all persons…in the south Santa Clara County region depend on access to and care of a locally operated hospital…the paramount concern of every elected official must be the health, safety and wellbeing of the public…”
The resolution will be sent to California Attorney General Kamala Harris, who has final say and will decide by Feb. 20.
The city joins, among others, the Gilroy Chamber of Commerce, the Gilroy Economic Development Corporation, the Morgan Hill Chamber of Commerce and the California Nurses Association in support of the sale. Morgan Hill’s city council had not taken an official position as of press time.
Strong opposition has come from the Service Employees International Union—United Healthcare Workers, which fears services to the poor will suffer and jobs will be lost.
Citing severe financial problems that could spell bankruptcy, the nonprofit DCHS sought bids for six of its facilities, including those in South County and O’Connor Hospital in San Jose, and elsewhere in the state.
Prime was chosen over other bidders, including Santa Clara County, which wanted only local facilities, and a New York private equity firm. DCHS believes Prime, a for-profit firm based in Ontario, has the only viable bid for the entire package.
Meanwhile, Wasserman, a Los Gatos resident and president of the Santa Clara County Board of Supervisors, said in a Monday morning interview with the Dispatch that the county is the only bidder that can run the facilities at their best.
He declined to endorse or reject the sale to Prime—or to consider a third option, that Harris approve the Prime deal with conditions—saying that he wants what is best for residents and only the county can provide that. (see editorial on page A6.)
“I’ve been consistent from day-one,” Wasserman said. “As a district one supervisor (my desire) is to make sure South County residents continue to have access to critical healthcare,” he said, adding, “We’ve made our position clear that if the Daughters of Charity sell those properties to us, we will continue providing those services.”
Daughters of Charity CEO Robert Issai told the Dispatch in late January that the county was never a “major player” in the process and knew the Daughters were intent on selling the six facilities to one buyer.
“Frankly, the county is not qualified to be a buyer of our hospitals,” he said. “Why would I sell to the county when they’re losing almost $200 million running their hospitals and clinics? Why would I hand the domain of my hospitals to them when the cost to run theirs is twice to three times than mine is?”

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