A series of online voter information forums on the recently announced sale of the Healdsburg District Hospital began Monday evening and continues Tuesday and Wednesday at 5:30 p.m. via a Zoom teleconference. Pre-registration is not required and live questions and comments are accepted.
The board of directors of the North Sonoma County Healthcare district voted unanimously on July 30 to advance the sale of the north county’s hospital to an affiliate of Providence St. Joseph Health that owns and operates Santa Rosa Memorial Hospital and also has a pending purchase of Petaluma Valley Hospital.
The sale of the Healdsburg hospital must be approved by a majority of healthcare district voters. The district includes registered voters in Windsor, Healdsburg, Geyserville, Cloverdale and the surrounding unincorporated region, encompassing the county’s fourth supervisorial district now represented by James Gore.
Board chair Erin Gore (James’ sister-in-law) led a board and staff presentation of the proposed transfer of ownership. There were 33 participants in the Zoom session, comprised mostly of hospital staff.
NorCal HealthConnect, LLC, is paying $15 million for lands and facilities. HealthConnect has agreed to operate the hospital for a minimum of 30 years and complete major seismic retrofits to the 50-year-old hospital. The agreement also requires the buyer to re-employ all current hospital staff for a minimum of six months. A new community board (2/3rds NorCal HealthConnect and 1/3 community members) would get a one-time $10 million payment for various programs and initiatives.
The current $150 per year parcel tax will stay in place, with $1 million a year to go to the retirement of the $10 million bonded debt and $2.5 million directed to NorCal HealthConnect for hospital operations.
“We want to be as transparent as possible,” said Erin Gore. “Before COVID-19 we were in a good financial situation,” but that is no longer the case as the hospital has racked up several millions in monthly operating losses due to curtail activity and patient cases due to COVID-19 pandemic restrictions.
Gore, fellow board member James Nantell and Jim Schuessler, the hospital’s new CEO, reviewed the recent year’s of strategic planning that culminated in the announced sale on July 30. The hospital was faced with changing healthcare laws, under-funded government mandates, a series of natural disasters and an estimated cost of $60 million in needed capital and facility needs, plus another $20 to $50 million in seismic retrofitting.
“We quickly realized we didn’t have the capacity to raise those amounts of funds,” said Gore.
A strategic planning committee considered four options including full closure of the hospital; seeking a long-term partner; building a new hospital; or remaining under community-ownership.
“We also realized we need expertise to navigate through all this so we sought a new partner under various terms that might work,” said Gore.
The right partner would need enough capacity to raise funds, have a track record as a quality provider and have a strong commitment to the community, Gore said.
Nantell said a lease was first considered but Providence St. Joseph required a much longer term agreement to support all the major investments that would be required. That led to the current sales and purchase agreement. An appraisal of the hospital property was completed and set a fair market value at $15 million, which is the purchase price, now agreed to by all parties.
The healthcare board was asked during the virtual session what might happen if voters oppose the sale and Gore answered, “we would face a very dark future, probably closing over the next several years.”
Jan Morgan asked if the new owners would continue to offer all the current medical services as previously offered by the healthcare district. The district’s attorney Bill Arnone said the new owners must operate under the same state hospital license which includes and describes all the many patient, diagnostic, out-patient, clinical, skilled nursing beds and specialty medical procedures.
Healdsburg District Hospital is considered a Critical Access Care hospital by the federal government and receives slightly enhanced Medicare reimbursement payments over other hospitals without the certification. (If the hospital loses its Critical Access identity, then the pending sales agreement would drop the 30-year operating agreement to just 20 years.
North County Healthcare District voters will vote in the Nov. 3 election. The measure is labeled as Measure BB on the ballot. The full terms of the sales agreement are available at the hospital’s website (https://healdsburgdistricthospital.org/purchaseagreement.)
