Hospital board approves sale of three bankrupt San Jose medical clinics

The El Camino Hospital Board of Directors unanimously approved the sale of five Verity Medical Foundation Clinics at its  meeting Wednesday night, according to a release issued by Silicon Valley Medical Development on Thursday.

A $1.27 million bid by SVMD includes the electronic medical records, furniture and equipment at three San Jose clinics located at 625 Lincoln Avenue, 2585 Samaritan Drive and 227 North Jackson Avenue. Gilroy Primary Care and Morgan Hill Medical Associates are included in the sale as well.

More than a dozen employees and supporters spoke on Wednesday urged the board to protect the jobs of 180 employees who were notified they’d be laid off during the bankruptcy process, according to El Camino Hospital spokeswoman Kelsey Martinez.

The board thanked the employees for their service, Martinez said, but the future of 100 medical workers still hangs in the balance.

“You can’t negotiate in a setting like that,” Martinez said.

El Camino Hospital Board Chair Lanhee J. Chen said in a prepared statement following the meeting that the concerns heard at the meeting were appreciated and he’s hopeful the sale will be approved by a bankruptcy court.

“El Camino Hospital is committed to continuing to provide the best care for patients in the community,” he noted in the release. “Like many hospitals across the country, we are collaborating with partners and affiliates – in this case, SVMD – to provide access to healthcare services in non-acute clinical settings.”

SVMD President Bruce Harrison noted in a separate statement that the sale would be filed with the bankruptcy court soon and, if approved, would lead to a new service agreement with San Jose Medical Group.

“It is our goal to open new clinics in a timely manner, to provide patients with continuity of high-quality of care from physicians they know and trust with as little of disruption as possible,” he noted.

The approved sale comes on the heels of the announcement of layoffs at eight Verity Health clinics in and around San Jose. Harrison said SVMD’s bid to buy five clinics would be “a positive solution to a difficult situation.”

If the offer goes through, SVMD intends to lease those five locations and to sign a professional service agreement with the San Jose Medical Group physicians, according to a news release. The organization currently owns and operates clinics in San Jose, Mountain View, Cupertino and Los Gatos.

It’s unclear whether the 180 employees Verity planned to lay off — including medical records clerks and patient service representatives — could expect to be hired back by the new owner. A representative from SVMD told San José Spotlight that “an asset purchase does not include the transfer of employees.”

A potential sale was hinted at in a Feb. 1 letter from Verity’s director of human resources in which the employees were encouraged to reapply for their positions with the El Camino Healthcare District. SVMD is an affiliated entity of El Camino Hospital.

The letter didn’t provide much peace of mind to the employees facing unemployment, one longtime worker told San José Spotlight earlier this week. Verity Health filed for bankruptcy in Aug. 2018 and in late January notified 180 employees working across eight Bay Area clinics that they would be losing their jobs between March 31 and April 13.

The affected clinics include Good Samaritan Clinic, McKee Clinic, Willow Glen Clinic, O’Connor General Surgery and O’Connor Primary Care Clinic in San Jose. As well as the Morgan Hill Medical Associates, Morgan Hill Pediatrics and Gilroy Primary Care.

Contact Carina Woudenberg at [email protected] or follow @carinaew on Twitter.