County leaders secure purchase of East San Jose hospital

Santa Clara County leaders have approved a $315 million effort to acquire and integrate Regional Medical Center into California’s second largest public hospital system — and restore the lifesaving care a for-profit corporation systematically cut from East San Jose.

While the county is still finalizing the agreement with HCA Healthcare, the Board of Supervisors on Tuesday voted unanimously to appropriate the money in its health department budget  — with $175 million going toward acquiring the hospital.

Officials allocated up to $30 million to purchase independently-owned medical office buildings nearby, and another $10 million for broker fees and inspections. Up to $20 million will be used to buy and implement electronic health record software. Another $80 million will fund the first few months of operating Regional Medical Center, as the county incurs costs of services while waiting to get reimbursed by commercial insurance, Medi-Cal and Medicare.

The county plans to restore the trauma, stroke, and heart attack services HCA cut from Regional in August as soon as the purchase is complete. County leaders hope to achieve that — and transition Regional’s workforce to county employment — early next year. Obstetrics, labor and delivery and newborn care services cut in prior years will also be restored, but that timeline has to be determined post-acquisition.

Regional is the county’s fourth hospital purchase since 2019 and potentially saves East San Jose from becoming a health care desert. Around 50 residents and patient advocates urged officials at the meeting to prioritize community input while moving swiftly to restore services.

Laisha Martinez-Reyes, an organizer for Latinas Contra Cancer, said county residents are already feeling the shockwave of Regional’s cuts that occurred last month.

“Other hospitals are now becoming more impacted and patients across the county have to commute farther for quality care. This is a time sensitive issue that is impacting patients’ lives daily,” Martinez-Reyes said at the meeting.

Supervisors balanced their excitement over the purchase with what’s sure to be a bumpy road ahead: Integrating the hospital into the county’s system.

“Today does feel like a pre-honeymoon moment,” President Susan Ellenberg said at the meeting. “It will be tough. There will be challenging moments that won’t have as many smiles as today.”

The county hospital system is a massive weight on the taxpayer general fund — the county’s main source of money for public services and social safety net programs. This year, county leaders had to close a $250 million deficit in their $12.4 billion budget. The public hospital system accounts for half of this year’s budget with $6 billion in spending and more than $1.26 billion coming out of the general fund.

Supervisor Joe Simitian, who is terming out this year alongside Supervisor Cindy Chavez, warned his colleagues of the coming trials, such as balancing hospital jobs and salaries with limited money.

“When people are giving you hell from the microphone — and they will — it is important to always listen and reflect on what people are saying. But it’s going to be essential for the survival of the system to find ways to reduce that subsidy,” Simitian said. “That’s going to be the less joyful part of the action we take today.”

County supervisors requested a work plan for engaging residents on the transition by January or February.

“I do think the trepidation of what’s happening in the community is something we can quell if everyone understands when they get to weigh in,” Supervisor Cindy Chavez said at the meeting. “One of the questions is going to be: Which services come back first and why?”
Speakers also questioned the fate of Regional’s employees in the transition process.

When Santa Clara County bought three financially-struggling medical facilities in 2109, county officials promised nearly 1,700 workers at O’Connor Hospital in San Jose, Saint Louise Regional Hospital in Gilroy and DePaul Medical Center in Morgan Hill they could keep their jobs. But workers said the county reneged on that pledge once it took over. Workers described the early months under the county as “chaos,” with hundreds forced to reapply for jobs they’d had for decades and take written tests with little to do with their work.

“We hope we can learn from the past,” Jamie Thompson, a labor organizer whose union Engineers and Scientists of California Local 20 represents health care workers at Regional, said at the meeting.

County Executive James Williams said a merit system will facilitate the process of onboarding employees.

“It will greatly ease and reduce what was definitely the biggest source of friction in the 2019 acquisition,” he said.

Contact Brandon Pho at [email protected] or @brandonphooo on X, formerly known as Twitter.