An affiliate of Catholic Healthcare West will close 95-bed Mercy American River Hospital in Carmichael, Calif., on June 30 to stem operating losses.
Mercy American River is one of two hospitals that Mercy Healthcare Sacramento, CHW's seven-hospital affiliate in California's Central Valley, operates in Carmichael, outside Sacramento.
Mercy Healthcare purchased Mercy American River from Alta Bates Corp., which is now part of Summit Health, in 1991 for about $15 million. The deal followed a lengthy antitrust investigation by the Federal Trade Commission.
The hospital's closure is expected to save about $2 million a year, according to Mercy Healthcare officials.
Mercy Healthcare's 245-bed Mercy San Juan Hospital in Carmichael will absorb the closed facility's patients. Mercy American River will likely be used for educational services such as childbirth classes, officials said.
"We're not focusing on individual hospital performance so much as looking at what changes will improve our overall performance," said Mercy Healthcare spokeswoman Jill Dryer.
Officials said Mercy American River's patient census has hovered at about 30%.
Mercy Healthcare lost $3.1 million on revenue of $651 million in the 1999 fiscal year, which ended June 30. Projections for 2000 were not immediately available.
Market studies dating to the early 1990s concluded that Carmichael could not support two hospitals. In 1993, Mercy Healthcare merged the two hospitals.
On another news front, San Francisco-based CHW is selling 55-bed Saint Louise Hospital in Morgan Hill, Calif., to San Jose (Calif.) Christian College for somewhere in the area of $25 million to $30 million. That deal is expected to close in June. Late last year CHW moved Saint Louise's inpatient services to 93-bed South Valley Hospital in nearby Gilroy, a property that it purchased from Nashville-based Columbia/HCA Healthcare Corp. last September.