Catholic Healthcare West's pending purchase of South Valley Hospital in Gilroy, Calif., will eliminate its only acute-care rival in the area just south of San Jose, Calif., and will force candidates for elective abortions and other reproductive services to travel elsewhere to get them.
San Francisco-based CHW signed a definitive agreement late last month to buy 93-bed South Valley from Columbia/HCA Healthcare Corp., Nashville (Sept. 6, p. 26). Terms of the deal, expected to close by Sept. 30, were not disclosed.
The Roman Catholic system plans to merge South Valley with CHW's 55-bed Saint Louise Hospital in nearby Morgan Hill, transferring operations from Saint Louise to the larger South Valley facility by early December. The combined facility will be renamed Saint Louise Regional Hospital and be run by Terry Curley, Saint Louise's current administrator.
CHW has given Santa Clara County a required 90-day notice that it intends to close the emergency room at the Morgan Hill facility, CHW officials said.
Because Catholic doctrine prohibits CHW from performing procedures such as elective abortions or tubal ligations, the consolidation will eliminate nonemergency availability of those services at the consolidated South Valley facility.
CHW says about a dozen hospitals, clinics and other providers offer those procedures within a 35-mile radius, and, consequently, access to those services won't be affected.
But, critics contend that the consolidation will make access to those services problematic for many patients, especially low-income women who don't have transportation.
Suellen Rowlison, a member of the Gilroy City Council, along with a new advocacy group called the Santa Clara Health Access Coalition, has asked CHW to use a "community hospital" model that would preserve existing birth-control and other reproductive services at South Valley. But the Catholic system has no plans to do so.
CHW officials said they had no choice but to consolidate. If Columbia hadn't "blinked first," CHW would have been forced to close Saint Louise, said spokesman Wade Rose. "We were within four to six months of pulling the plug."
Cumulative losses at the two rival hospitals since they opened in 1989 have topped $65 million, according to CHW officials, who say the purchase of South Valley and consolidation of the two facilities was the only way to ensure the survival of an acute-care hospital in the southern part of Santa Clara County.
Saint Louise lost an estimated $3.2 million in fiscal 1999, ended June 30, and South Valley lost $7.5 million in 1998, according to figures supplied by the two hospital systems.
Both hospitals were built in the late 1980s, when the south Santa Clara Valley area was expected to grow significantly. But when the growth of San Jose and the high-tech Silicon Valley moved in other directions, it left the two hospitals fighting for an inadequate patient pool.
"A single merged facility will allow the consolidation of services, medical staff and patient volume, resulting in a more efficient operation and projected positive net income," said John Williams, president and chief executive officer of CHW's Bay Area region.
Layoffs are a possibility, officials said, but no decisions will be made until the sale closes.