HAYWARD, Calif. — St. Rose Hospital is making headway in its quest to join a larger health care system, buoyed by the city of Hayward’s recent commitment to provide the safety-net hospital with ongoing financial support.
On Tuesday, Dec. 19, Colleen Chawla, director of the Alameda County Health Care Services Agency, told the Alameda County Board of Supervisors that St. Rose contacted “a small handful” of potential partners in November and is currently working on nondisclosure agreements with interested parties, though some did not want to enter into the agreements and others were still assessing their interest.
“Parties that sign the NDA will be asked to submit a proposal” by Jan. 14, Chawla said, with the hospital’s board of directors set to receive a summary analysis of all the proposals in late January, early February.
Second District Supervisor Elisa Márquez, who plans to regularly update the supervisors on St. Rose, spoke to the importance of having a full-service hospital in the Hayward area, especially for the 400,000 residents who rely on it annually for care.
“St. Rose is a crucial piece of the health care system in Hayward, the regional safety net and Alameda County’s Vision 2026 goal that there is to be health care for all,” Márquez said.
St. Rose decided to integrate with a larger health care system a few weeks ago after a consultant’s report found that remaining a stand-alone hospital would require a significant and ongoing increase in public funding. With that funding unlikely to materialize, a larger health care system could help the hospital manage rising operating costs, such as the cost of recruiting and retaining staff, and connect with a wide network of physicians, who could help address the hospital’s shortage of patient referrals.
Hospital leadership is working with consultants Steven Hollis, a longtime investment banker, and Kaufman Hall, a health care management consulting firm, to find the right health care partner for the independent, not-for-profit hospital, with plans to select a partner to affiliate with before the end of the fiscal year.
The hospital has been receiving assistance from local and state governments to help it stay afloat in the meantime. Earlier this year, St. Rose received an allocation of $17.65 million from the state’s distressed hospital loan program, which has yet to be received, and $5 million from the supervisors to cover operating expenses.
Last week, the Hayward City Council also decided to lend its support, unanimously directing staff to return to the council with options to provide $250,000 to $500,000 in ongoing support to the hospital at the request of Councilmember Ray Bonilla and Mayor Mark Salinas. City Manager Kelly McAdoo said the funds are likely to come from Measure C revenue, generated from the city’s voter-approved half-cent sales tax, and to be contingent on the hospital’s change in ownership.
The council’s vote also directed city staff to work with the county Health Care Services Agency to use those funds to maximize St. Rose’s intergovernmental transfer, a money-shuffling mechanism used by health care providers and local and state governments to maximize the federal funding a community hospital receives to cover Medi-Cal expenses.
The county has already committed $7 million for an intergovernmental transfer, with plans to commit $2 million more. Depending on the total funds ultimately committed, St. Rose could receive between $14 million and $19 million.
The supervisors are expected to receive another update on St. Rose in February.
Sonia Waraich can be reached at 510-952-7455.
