Triad Hospitals, Plano, Texas, will sell its only California hospital, 122-bed San Leandro Hospital, to Eden Township Healthcare District, Castro Valley, Calif., for $35 million. The agreement calls for a June 30 closing. Chris Holden, a Triad divisional president, said in the district's news release that while the hospital has a positive cash flow, the company "recognized that hospitals in California face significant -- and unique -- challenges." Triad officials could not be reached for further comment at deadline. California's regulations, especially its nurse-patient ratio law and its seismic safety regulations, have been cited as onerous by many hospital operators.
The healthcare district plans to lease the hospital in San Leandro to Sutter Health, Sacramento, which bought the district's 275-bed hospital in Castro Valley in 1997. The facilities will operate collaboratively for at least three years, the district said. In the meantime, Sutter is working on a $300 million overhaul and expansion of the Castro Valley hospital. The district's board must approve the purchase, and the California Department of Health Services must approve a consolidation of the two hospitals' licenses. Triad currently owns or operates 51 hospitals, with two under construction. -- by Vince Galloro