Hospitals are, literally, the life blood of a community. Local hospitals provide essential, life-saving emergency care, as well as care for people of little means who can’t afford to travel long distances for medical assistance.
Yet California Attorney General Xavier Becerra is actively threatening medical and emergency services to residents in the cities of Gilroy, Morgan Hill and San Martin, all south of San Jose. People in these cities have relied on local hospitals in their area for many years, but the company that owns them, Verity Health System of California, has filed for bankruptcy.
Santa Clara County stepped forward as the sole bidder to buy the hospitals for $235 million and keep them in service. This would have been a relief to the local community, but the attorney general is trying to block the sale. Under state law, the attorney general has the power to place conditions on the transfer of charity hospitals to private entities in order to protect the public interest. And Becerra is now demanding to impose conditions on the county.
Yet Santa Clara County, which owns the Valley Health and Hospital System — including the Santa Clara Valley Medical Center — already operates in the public interest. That’s one reason why a federal bankruptcy court judge rejected the attorney general’s demand to place conditions on the county before it could purchase the hospitals.
That’s probably also why Becerra’s predecessor, Kamala Harris, imposed conditions on these hospitals to contract with the county’s public health plan and public health departments when Verity purchased them in 2015. These are among the conditions that Becerra now nonsensically seeks to impose on the county itself.
In addition, the attorney general’s oversight powers only apply to for-profit corporations or mutual benefit entities, not public entities. And that makes sense because public entities are subject to an entirely different set of state regulations—such as the state law obligation that counties provide health care to those who can’t afford it.
The judge’s decision should have been the end of the attorney general’s interference, but Becerra is unfazed. He’s now requesting that the U.S. District Court in Los Angeles order an “emergency” stay of the bankruptcy court’s order.
If the stay is granted it will further delay the sale and may result in the shutting down of three medical facilities: St. Louise Regional Hospital in Gilroy, DePaul Health Center in Morgan Hill, and O’Connor Hospital in San Jose. This will mean that residents will be unable to access emergency and other medical services in their own communities.
In addition, the 1,700 people working in these hospitals will lose their jobs. Even if the county is ultimately able to finally operate the hospitals, the costs to start up from scratch may be prohibitive.
Santa Clara County’s purchase of these hospitals would relieve strain on the county’s already crowded hospital system and ensure continued service to all residents, including those who are low income and vulnerable, regardless of their ability to pay. The Verity Health System Board expressed a strong preference to sell to buyers who would continue to provide necessary health care rather than tear down the hospitals to build strip malls or offices instead. The county’s offer was a miraculous solution.
If the attorney general delays this sale, he will cause a real emergency. Why is Becerra taking this harsh position and using state power to disrupt health services in local communities? The only imaginable reason is a desire to control and exert political domination over local public entities without considering the humanitarian or public health risk. The people of California should not condone this.