The local public agency that first owned and now co-governs Sequoia Hospital in Redwood City appears poised to step away from the hospital’s governance under a proposed agreement with the hospital’s operator.
But the taxpayer-supported agency, Sequoia Healthcare District, would nevertheless contribute $75 million toward the projected $240 million cost of rebuilding and expanding the facility under the proposal.
All the details have yet to be worked out, but all five members of the district board appear to support the overall concept of the proposal, detailed at a Sept. 5 public meeting, that would turn over ownership and governance of Sequoia to Catholic Healthcare West (CHW), which now operates the hospital.
The proposed agreement would require CHW to continue to run Sequoia as a community hospital, not a Catholic facility. It would also require CHW to put in place an electronic patient-record system, and to implement an aggressive doctor recruitment and retention program at the hospital.
The district board meeting came two days after the Redwood City Council approved the massive rebuilding project at the hospital’s existing site at Whipple Avenue and Alameda de las Pulgas.
“Last week was a major, red-letter week — the city’s approval, and going public with the transaction with the district,” said Glenna Vaskelis, the hospital’s chief administrator. “We’re looking forward to breaking ground,” she said, adding that if all goes as planned, that would happen in November.
The district board is scheduled to meet again to discuss, and possibly approve, a final agreement at 4:30 p.m. Tuesday, Sept. 25, in the hospital’s Sequoia Room.
The hospital is to remain fully operational during the construction project, which CHW hopes will be complete by Jan. 1, 2013.
Sequoia Hospital’s owner is under the gun to seismically retrofit the 56-year-old facility to meet a 2013 state deadline. But the need to retrofit led to the decision to also expand the hospital to include a new, four-story building, a parking garage and other new features. The planned new facility will have 167 acute-care beds, Ms. Vaskelis said, and will continue to house a cardiology department that has been one of the hospital’s brightest stars.
Funding sources
The health-care district owned Sequoia until, straining under an increasingly heavy debt, it worked out an arrangement with CHW in 1996 to create a nonprofit corporation that would own and govern the hospital. That corporation, Sequoia Health Services, has a 10-member governing board, with five members appointed by the district and five by CHW, which has operated the hospital since that time.CHW paid the district $30 million in the deal, and “at that time, the district said ‘we’re not touching any of it,’ ” said Kathleen Kane, the district board’s president. That money, she said, has grown to $70 million, a large portion of which will be used toward the district’s contribution to the rebuilding project.
Under the proposal, the district would also contribute the revenue from the sale of a medical office building it owns — estimated to be worth between $12 million to $15 million.
The proposed agreement will also allow CHW to absorb the nonprofit Sequoia Health Services.
In addition to the district’s contribution to the hospital’s construction fund — which will be capped at $75 million — CHW and Sequoia Health Services will each contribute $75 million. The remaining $15 million will be sought in private donations. Under the proposal, CHW will pay for all costs over the projected $240 million.
Ms. Vaskelis said there also will be a provision in the final agreement that would require approval by the district if CHW wants to sell the hospital before a specified period of time.
Also under the proposal, the district would split any of Sequoia’s profits beyond a specified threshold, beginning after the agreement is signed, and it is that money that the district will use to push its contribution up to the $75 million mark.
Ms. Kane, the district board president, said the district’s annual revenue from taxes will continue to be used to support community-based health programs, which include funding for a nursing program offered through Canada College and San Francisco State University; contributions to the county’s Children’s Health Initiative; and funding for the Samaritan House free clinic and the Fair Oaks medical clinic.
With its responsibility for Sequoia Hospital for the most part at an end, the district will be able to expand its efforts to meet the health-care needs of its residents through community programs, Ms. Kane said.
The district comprises Menlo Park, Atherton, Portola Valley, Woodside, Redwood City, San Carlos, Belmont and nearby unincorporated areas.
