Midcoast Community Council

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Saving Seton Coastside Hospital

On July 17, 2015, Daughters of Charity Health System (DCHS), which owns Seton Medical Center Coastside, announced a deal with private investment firm BlueMountain Capital Management to recapitalize its six ailing hospitals, with more than $250 million, and transfer control of the hospitals to an independent board of directors. BlueMountain would contribute the capital, and its subsidiary, Integrity Healthcare, would manage and operate the hospitals while still maintaining their non-profit status. The investment firm has the option to purchase the health system after three years.  Q&A

DCHS has been losing $10 million a month and was facing bankruptcy after a sale to Prime Health Care fell through last spring. Prime backed out due to conditions placed on the sale by the Attorney General, including keeping all system hospitals open for 10 years.  State law requires the Attorney General to review any proposed change in control or governance of nonprofit health care facilities. A decision is due on the current proposal in mid November. 

The BlueMountain deal includes keeping all the hospitals open for five years, as Prime had originally agreed to do.  One question is, will the Attorney General impose more than five years on the latest offer?

Five key questions about the new deal to salvage DCHS -- SF Business Times 7/17/15

Not a sale, but a "System Restructuring and Support Agreement" -- What are BlueMountain's long-term plans? SF Business Times 8/3/15.

The Bay Area hospital landscape is going through a shakeup, one that’s particularly directed at independent medical centers or small chains that serve a preponderance of patients who are uninsured or covered by government programs -- SF Chronicle 3/13/15

Seton Coastside is a 116-bed skilled nursing facility with 5 general acute-care beds located in Moss Beach. It is the only hospital on the Coastside.  The emergency room is something of a misnomer -- it is not a modern facility. The County particularly doesn't want to lose the long-term care facility which is very difficult to replace, but Supervisor Horsley has stated that he feels an Urgent Care facility for the Coastside would be preferable to the outdated emergency facility at Seton.  The County has tried unsuccessfully in the past to buy part of the hospital system, and has given the troubled system $30 million in recent years. Supervisor Horsley has met with DCHS and BlueMountain executives and is committed to retaining Coastside medical facilities should the deal fall through.

UPDATE:  
Oct 16, 9:00AM at Mavericks Event Center, 107 Broadway, Princeton.
CA Attorney General will conduct a public meeting concerning Seton Medical Center Coastside to receive comments on the proposed change in control and governance and to consider the Health Care Impact Statements. Deadline for receipt of comments is Oct 20 – contact info.

UPDATE 12/4/15:  Attorney General granted conditional approval for Daughters of Charity Hospitals deal pending acceptance of terms by BlueMountain.

UPDATE 12/15/15:  Final deal is approved and accepted between Daughters of Charity and BlueMoutain, which includes Seton Coastside Hospital to remain as skilled nursing & 24-hr emergency facility for at least 10 years.