The Bay Area’s largest county announced plans Wednesday to buy a private hospital that had been slated for major cutbacks — a move that county officials say will preserve critical medical care for the low-income community it serves.
Santa Clara County has reached a tentative agreement with the owner of Regional Medical Center, a 250-bed hospital in East San Jose, to acquire the facility for $175 million. The move follows months of uncertainty and discord about the future of the facility, which treats about a quarter of the county’s trauma patients.
County and hospital leaders anticipate the transaction will be completed by the first quarter of 2025.
Regional Medical Center, which is currently owned by the national for-profit health care provider Hospital Corporation of America, had initially planned to close its trauma center this month. After outcry from hospital staff, elected officials and patient advocates, it later reversed course and said it would keep the trauma center open but downgrade it from Level II to Level III, which would have meant reducing cardiac surgical services.
It also planned to scale back a program that treats the most severe heart attacks and to provide less specialized care for stroke patients. HCA cited decreased utilization over the past several years but did not specify how many fewer trauma patients it was seeing or why.
If the tentative deal is finalized, the hospital will restore these services. The county also plans to later bring back obstetrics, labor and delivery and newborn care services, which were discontinued in 2020. Much of the money for the acquisition will come from one-time Federal Emergency Management Agency funding that the county expects to receive as reimbursement for providing COVID-19 services during the pandemic, said county executive James Williams.
There is some precedent for the county absorbing a struggling hospital into its public hospital system, already the one of the largest of its kind in the state. In 2019, the county bought O’Connor Hospital in San Jose and St. Louise Regional Hospital in Gilroy for $235 million. The hospitals were on the brink of closure after their previous owner, Verity Health System, filed for bankruptcy. They joined the 730-bed Santa Clara Valley Medical Center, the flagship and largest county hospital, to become part of the broader public provider system Santa Clara Valley Healthcare. The system also includes 16 clinics.
“We’re very pleased with this potential acquisition of Regional Medical Center,” said Jackie Van Blaricum, president of HCA’s Far West Division. “We have served this community for over 25 years, and we believe this is the best path forward for our organization.”
Regional Medical Center serves about 2,400 patients each year and is one of three trauma centers in the county. The plans to shut down and later curtail services alarmed local officials, patient advocates and some of the hospital’s own doctors, who worried they would leave the community without critical medical services, as patients and ambulances would have to travel farther for care. Because the hospital serves low-income residents in East San Jose, the changes would have had a disproportionate impact on communities of color, they said.
The next closest trauma units are Santa Clara Valley Medical Center, about 8 miles to the southwest, and Stanford Hospital in Palo Alto, about 27 miles northwest.
“Incorporating Regional Medical Center is in line with the county’s mission to provide safety net resources for our entire community,” said Dr. Manuel Gonzales, a pediatrician at Santa Clara Valley Medical Center’s East Valley clinic.