A bankruptcy court approved the sale of five South Bay clinics to El Camino Hospital on Wednesday, leaving only a few days to make sure they successfully re-open under the new management without a hitch.
Officials from Silicon Valley Medical Development (SVMD), which wholly owned by El Camino, announced that a Los Angeles bankruptcy court signed off March 27 on the deal between SVMD and Verity Health System. Verity filed for bankruptcy last August, and has since sold off hospitals and clinics across California through bankruptcy court proceedings.
The $1.27 million sale agreement includes the purchase of clinics in San Jose, Gilroy and Morgan Hill. Although the hope was that the court would finalize the agreement on Tuesday, March 19, it granted an extension to March 27 for additional review.
SVMD officials say the decision is good news, and allows five clinics that could have closed to continue serving thousands of patients. SVMD President Bruce Harrison said in a statement Wednesday that his organization is already prepared to partner with San Jose Medical Group physicians for a successful launch on April 1.
"We are so pleased that all the elements necessary have aligned to put patient care first," Harrison said. "San Jose Medical Group physicians serve an important community need, and we are honored to work with them to quickly open and make this transition as seamless as possible for their patients."
A seamless transition is going to be tricky. By getting approval later than anticipated, SVMD officials admit that they have a "shortened time frame" of just five days to the clinics' Monday opening. The finalized agreement means El Camino's affiliate needs to move fast with a combination of "direct employment and contracted agencies," according to the Wednesday statement.
El Camino unveiled its clinic purchase plans in February, which offered to buy the assets of the clinics but excluded the transfer of 164 existing clinic employees. Union members working in the clinics have urged El Camino Hospital's board of directors to reconsider, arguing the patients and clinic staff alike need continuity during the transition. Service Employees International Union-United Healthcare Workers West (SEIU-UHW) members have slammed SVMD and the board for being opaque about its plans -- board members never said explicitly that they would or would not rehire the employees -- and several local elected officials have sent letters on behalf of SEIU-UHW employees.
The lack of response from the board prompted union members to file a ballot initiative that would make El Camino Hospital seek voter approval to purchase the clinics. The measure was filed with the Santa Clara County Registrar of Voters on Monday, March 18, and would come before voters residing in the El Camino Healthcare District on the November 2020 ballot.
Many of the 164 employees have re-applied for the same jobs, through both phone and in-person interviews, but as of Thursday morning, only 16 had been told they are going to keep their jobs, said Sean Wherley, a spokesman for SEIU-UHW. Some employees have already been asked to turn in their keys because Wednesday was their last day on the job, he said.
Staff members have been advised that they may have an opportunity to be hired as temp workers for 30 or 60 days, but they don't have a lot of answers for patients on what to expect next week.
"Workers have been told to give a flyer to patients saying the ownership is changing, but it doesn't say anything about their readiness come Monday," Wherley.
Representatives from SVMD told the Voice they would not be available for an interview for weeks, but provided a statement saying that they are working "quickly" to successfully open the clinics on Monday and expect a seamless transition.
"All appointments currently scheduled will be honored and new appointments can be scheduled by calling the same phone numbers as before," Harrison said. "We look forward to welcoming patients to San Jose Medical Group, affiliated with Silicon Valley Medical Development."
The clinic purchase is a big move for El Camino Hospital, which has expanded its presence into the South Bay for years. The hospital has been operating a second campus in Los Gatos for nearly a decade, and more recently opened multiple clinics in San Jose. The latest purchase now includes five new locations run by the hospital through SVMD. The clinics are located at 625 Lincoln Avenue, San Jose; 2585 Samaritan Drive, San Jose; 18550 DePaul Drive, Morgan Hill; 9360 No Name Uno, #125, Gilroy; and 227 North Jackson Avenue, San Jose.