A sweeping agreement that will allow rebuilding Sequoia Hospital to meet state earthquake standards, and will turn over its governance to Catholic Healthcare West (CHW) appears on the brink of approval by the board of the Sequoia Healthcare District.
The board postponed a meeting scheduled for Oct. 30 to take action on financing the $240 million rebuilding project, and giving up responsibility for governing the 57-year-old hospital, which has been operated by the private, nonprofit CHW since 1996.
According to the district Web site, the meeting will be rescheduled in early November. Groundbreaking for the rebuilding project is planned for mid-November.
Since early September, the district board has been fine-tuning the elaborate agreement hammered out among the district, CHW, and the hospital.
The proposed agreement calls for a three-way split of the cost of rebuilding and expanding the hospital. The public health-care district, CHW, and Sequoia Health Services (the legal entity that owns the hospital), would each put up $75 million. The other $15 million would come from private funds to be raised by the Sequoia Hospital Foundation.
Under the agreement, the district would give up its five seats on the 10-seat governing board of Sequoia Health Services (SHS). The district will continue to be run as a community hospital by CHW.
CHW will appoint the new board, which may expand, said Bill Graham, vice president of physicians and business for the hospital. CHW also plans to appoint two members from the district, he said.
“The hospital will not change much. It will still have a community board,” said Stephani Scott, CEO of the health-care district.
District board chair Kathleen Kane expects the agreement to be easily approved. “There’s very little dissension on the board,” she told the Almanac.
Concerns
Nevertheless, there are lingering concerns in the community about losing control over what was a public hospital supported by the taxpayers for almost 50 years.
“The public needs assurance that CHW will continue to operate the hospital in partnership with the constituents of the district for the foreseeable future,” said Dr. Michael Griffin of Menlo Park, a pediatric cardiologist who practices at the hospital.
Dr. Griffin would like more time for the public to review the implications of the agreement; two public forums and several board meetings have been poorly attended, he noted.
Dr. Griffin said his biggest concern is that the hospital can be sold to a third party without district approval. “The board will have no oversight over the mission and management of the hospital,” he said. “It needs to be a community hospital, not a private hospital.”
Not to worry, said district director Malcolm MacNaughton, one of two board members who negotiated the agreement. “The agreement says the hospital will stay as a community hospital.”
The hospital cannot be sold without concurrence from the district board for seven and a half years after construction is complete, by 2013, Mr. Graham said. That’s about 2020.
District board member Don Horsley also hopes to amend the draft agreement to retain district approval over sale of the hospital. “We should be able to approve or disapprove third-party transfers for the full 40 years,” he said.
Dr. Griffin also worried about maintaining the support of the community of physicians during a time of rapid changes in health care. “With no assurance our interests will be represented, we could damage the fragile physician ecosystem,” he said.
Mr. Graham said the vast majority of physicians at the hospital support rebuilding the hospital and the new governing arrangement. “It will remain a community hospital,” he said.
Mr. Horsley is also asking for a better strategy to recruit and retain physicians in a highly competitive area, where the Palo Alto Medical Foundation is planning a new hospital in San Carlos. “I want some benchmarks we can hold CHW to,” he said. “If we get them, I’ll be happy with the agreement.”
“I don’t blame anyone for being nervous,” Mr. MacNaughton said. “There are going to be changes.”
He promised the agreement would “provide a community hospital that can dispense care that people can afford.”
Mr. Horsley concluded, “I want to make sure Sequoia continues as an acute-care community hospital as long as it has been in existence — another 57 years.”
For information, call the Sequoia Healthcare District at 482-6115 or Sequoia Hospital at 369-5811; or visit sequoiahospital.org or sequoiahealthcaredistrict.com.
Change of plans: Research campus to leave Menlo Park, make way for more housingJune 12, 2026 6:46 pm