Pressure Mounts to Prevent Closure of Major Daly City Hospital

The possible closure of Seton Medical Center would lead to a "medical desert" impacting San Francisco, staff warns.

Fed up with the lack of transparency surrounding a major Daly City hospital undergoing bankruptcy, staff and local elected officials are ramping up pressure to keep it open.

Seton Medical Center, whose owner Verity Health System declared bankruptcy in August 2018, is in “Plan B” mode after a deal all but collapsed in December, leaving just a few anticipated months of operating funds left. Throughout it all, staff have felt shut out of the process, anxious about the instability inflicted on themselves and their patients. While another buyer is interested, it could take months for the offer to be accepted — time that Seton doesn’t have.

The acute care hospital, Daly City’s largest employer, is considered a safety net to its roughly 80 percent of patients on MediCal and Medicare. About 27,000 people in southern San Francisco and northern San Mateo County use it for emergency services a year on top of regular care, largely low-income residents, immigrants, or seniors.

“They dont tell us anything,” said Helen Raquipiso, a nurse at Seton and Daly City resident of 15 years whose family relies on the facility, of the owner. “It’s hard to go to another hospital. It will be detrimental to our community if we lose this hospital.”

Raquipiso was one of roughly 100 people at a rally outside the hospital on Wednesday that called for transparency and the critical need to keep Seton afloat. The calls echo a town hall held at Daly City Hall on Saturday, without a Verity representative in attendance, to answer community concerns about the bankruptcy ordeal. It marks Seton’s second financial crisis since 2015.

A bankruptcy judge approved $610 million sale of four Verity hospitals to Strategic Global Management, an affiliate of KPC Group in April. Legal disputes surfaced — like the Attorney General’s sale conditions — and the company missed a December deadline to close the sale despite putting down a $30 million non-refundable deposit.

In early January, Verity closed St. Vincent Medical Center in Los Angeles with little to no warning, setting off borderline panic among Seton staff and Daly City’s elected officials. Though the San Mateo County Health System has a multi-million structural deficit, Supervisor David Canepa fears the only solution is for the county to purchase the hospital, which also needs seismic retrofitting.

“We may have to buy it,” Canepa tells SF Weekly. “We can’t stand idle. Sometimes you gotta do what’s right for the greater good.”

Canepa is exploring ways to generate revenue for Seton, like starting a government district for hospitals, bonds through the San Mateo County, a public-private partnership, and improving reimbursement rates for MediCal and Medicare. The county has a say but ultimately, instability on the federal level makes it difficult, according to the San Mateo County Health Chief Louise Rogers.

Many are also concerned that this will result in “land grab” of the 32-acre site. The property is zoned for hospital use only, which the Daly City Council reaffirmed in a resolution after Verity declared bankruptcy, but National Union of Healthcare Union organizer John Avalos warns that the political winds could easily change.

“At some point they might have to think about other things,” said Avalos, former San Francisco District 11 Supervisor who’s running for his seat again. “If you think about the political pressure that’s on you to make sure that a big chunk of land is going to be revenue-generating, job-generating, and help build a tax base, and if that’s not happening, there’s going to be pressure on elected officials to see that it does.”

Avalos is also calling for an impact study, or at least a public version of the confidential contingency plan put together by San Mateo County officials in the aftermath of the bankruptcy.

While circumstances seem dire, Dr. Robert Perez, who oversees the physicians, is hopeful. He feels Apollo Medical Holdings, which made an offer in recent weeks, would bring back the needed investment for Seton to thrive. But it could take until May or June for bankruptcy proceedings to address a Seton sale while it focuses on other Verity facilities — something he hopes could be expedited if they go before the judge and show the political capital behind Seton.

“This is political power here,” said Perez, motioning to the rally. “If we ever lost this hospital, everyone is in agreement this would become a medical desert. People would die.”

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