Rally To Save Gilroy Hospital From State Legal Block Planned

GILROY, CA -- Breathing life into what appears to be a high-stakes legal fight, a group of south Santa Clara County activists and concerned residents are hosting a rally Tuesday evening in support of the local government's purchase of St. Louise Hospital in Gilroy.

The medical facility that's been in operation for a few decades is in jeopardy while caught between the county and the California Attorney General. The A.G.'s office is demanding the county meet certain conditions of the hospital sale or the business transaction will be blocked, consequently leading to the hospital being forced to possibly close its doors.

The rally is slated for Jan. 29 at 4:30 p.m. on the hospital grounds at 9400 No Name Uno.

Organizers hope "to send a very loud and clear message to the California Attorney General that we urgently need St. Louise to stay open to care for the over 100,000 residents in south county that are already underserved regarding health care," a statement read.

"This is the only public hospital in our region. The south county region has high numbers of underserved population as well as immigrants and farm workers," local activist Swanee Edwards told Patch regarding St. Louise, in particular. "We want to show the A.G. that we, the population at risk, wants this sale to proceed. It is an informal gathering of stakeholders that recognize that without this hospital the quality of our lives will be very jeopardized."

The California Department of Justice attempted to block the sale of the South Bay's O'Connor medical facility as well as St. Louise over what it deems in legal documents as a mandate for the local government to take over the medical operations. The legal maneuver places the $235 million deal in peril.

The state Attorney General's office has filed an appeal of the U.S. Bankruptcy Court's sale order by requesting a stay, which asks the court to stop the sale of St. Louise in Gilroy and O'Connor in San Jose. The Bankruptcy Court in Los Angeles set a hearing date regarding the stay for Jan. 30. A stay will cause a breach of the purchase agreement between Verity and the county, thus preventing the sale.

"Since the county was the only party to bid on Verity's hospitals in Santa Clara County, it is likely that such an action would cause the closure of O'Connor and St. Louise hospitals," county Chief Executive Officer Jeffrey V. Smith said when the stay was announced on Jan. 10.

If the Bankruptcy Court denies the stay at the hearing, the attorney general can appeal the decision and cause further delay of the sale.

"Our concern is that if the transaction is not completed on time, the deal is dead, and the future of the hospitals is uncertain," Smith said. "The attorney general's actions to block the sale of Verity's hospitals to the county is a real threat to the health of our community, our residents and the vulnerable populations the hospitals serve."

On Dec. 27, the Bankruptcy Court approved the county's bid to acquire the two hospitals, which involves the DePaul Health Center in Morgan Hill under the Gilroy wing. The county would be adding the hospitals to its health system, which already includes Santa Clara Valley Medical Center in San Jose.

The hospitals, their staffs and doctors all share the county's mission to provide high quality, compassionate and accessible healthcare, the county contends.

"County leadership is already working on transition planning with the leaders, managers and employees in these hospitals in preparation for an expected late February ownership change and to make the transition as seamless as possible," Smith said. "Adding these hospitals to our health system would ensure the continued availability of essential healthcare services that their communities have depended on for more than a century. Because of this attempt to block the sale, our efforts and the viability of these community hospitals are now in jeopardy."

The state contends it petitioned the county to continue to operate the facilities as general acute care hospitals, including among other things 24-hour emergency medical services. The Attorney General's Office claims the county has not agreed to those conditions as part of its purchase.

Gleamed from the stay order was the state's objections in halting the sale centered on concern over the public's trust in having the local government take over the facilities.

"A stay will promote the public's interest in allowing the District Court to determine on appeal whether the (California Attorney General) can retain his police and regulatory powers to enforce conditions that were designed to protect the public health, safety, and welfare of the people of the state of California. The CAG conditions address the continued operation as licensed general acute care hospitals, continued provision of 24-hour emergency and trauma medical services, continued provision of certain essential health care services including reproductive health
services, continued participation in the Medi-Cal and Medicare programs for low
income, disabled and elderly patients and the continuation of governmental contracts that provide access to care for indigent patients," the state argument reads.

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