South Coast Medical Center buyer announced

High ranking city officials gave their support Friday to the bid by St. Joseph Health System to buy South Coast Medical Center in Laguna Beach.

The City Council will be updated at Tuesday’s meeting on the proposed sale to St. Joseph, the choice of Adventist Health to take over the financially ailing medical center. The state Attorney General must approve the sale to St. Joseph, which also owns Mission Hospital in Mission Viejo.

“Many people said it would be impossible to keep our community hospital,” said Mayor Pro Tem Cheryl Kinsman, who served with Mayor Jane Egly and Assistant City Manager John Pietig on the City Council’s hospital sub-committee.

“Despite the doubts, Jane, John and I kept working with the hospital and other health care providers until we were fortunate enough to get this offer from St. Joseph.”

St. Joseph’s is a not-for profit, California-based Catholic heath system with 14 acute-care facilities in the state, Texas and New Mexico.

The goal of Adventist Health, according to the announcement released Friday, was to make the transition to the new owner a seamless process for employees, physicians and patients.

“Personally, I would like to see St. Joseph retain the services of Elizabeth Pearson who headed the SCMC Foundation, and CEO Bruce Christian, whose experience and familiarly with Laguna would be invaluable,” Kinsman said.

St. Joseph’s bid meets most of, if not all of the city’s criteria for a new owner that the council agreed on at the Nov. 4 meeting and forwarded to Adventist officials, Egly said. Pearson did not attend the meeting or participate in any of the numerous closed sessions the council has held on the hospital sale because of her position at the medical center.

In all, the council approved nine recommendations:

1. Provide the community with a long-term commitment to maintain a general, acute car hospital with basic emergency medical services twenty-four hours a day, seven days a week.

“This is the key condition,” Pietig said. “These services are essential to the community and to minimize the distance public safety personnel must travel when conducting emergency transports.” The city also would like to see radiation therapy, not presently provided.

Also recommended:

2. The new owner should demonstrate the commitment and financial ability to purchase the assets, modernize the hospital and address seismic improvements when they are required.

3. Continue to operate as a not-for profit hospital.

“The council understands that there may be potential acquirers of the medical center that would commit to the criteria except they would plan to operate the hospital as for-profit entity,” Pietig said. “Considering that each proposal would be different, the council would have to evaluate them on a case-by-case basis.”

4. Have substantial experience operating a full-service hospital and an emergency room.

5. Possess a high degree of integrity and a good reputation in the communities it serves.

6. Maintain existing levels of participation in Medicare and Medi-Cal and commit to negotiating in good faith to secure contracts with health insurance plans covering the majority of the local insured population.

7. Retain the existing medical staff, nurses and volunteers to the greatest extent possible.

8. Establish a local governing board with community representation.

9. Maintain charity and indigent care at the present level.

“We were told that the reason St. Joseph wanted us was because the community was so involved in the preservation of the hospital,” Kinsman said. “They liked that.”

Adventist, which has owned the hospital since 1995, put it up for sale in September for the third time in five years, claiming enormous financial losses.

According to the press release, Adventist officials will begin confidential negotiations with St. Joseph, although the Attorney General’s approval process could take several months.