County Agrees to Buy Hospital in Santa Paula

Bucking healthcare trends, Ventura County supervisors agreed Tuesday to purchase bankrupt Santa Paula Memorial Hospital, a move aimed at expanding public healthcare for 45,000 Santa Clara Valley residents.

While many hospitals and emergency rooms across California are closing, the $2.75-million deal approved by the Board of Supervisors would reopen the shuttered Santa Paula facility under the auspices of the county’s Health Care Agency.

“Our county is going in the direction of providing more healthcare and more emergency service,” Supervisor John Flynn said. “Compare that to Los Angeles County, where hospitals are closing.... We have a great day for us here.”

Reopening the hospital, closed in December, is subject to approval of the deal by a U.S. bankruptcy judge. A rival proposal, put forward by the hospital’s board of trustees, could also be considered by Judge Robin L. Riblet in the next month or two, officials said.

Ventura County leaders, however, said they were confident Riblet would approve their plan because it satisfies the goals of reopening the facility and paying off its creditors.

In a separate action, a creditors committee appointed by Riblet would broker the sale of 15 acres of the 28-acre hospital property to an as-yet unspecified homebuilder. The sale is expected to generate at least $12 million, which would be used to help pay off about $15 million owed to creditors.

In agreeing to take over the remaining 13 acres, which include the hospital and administration buildings, county negotiators insisted that the county be held free and clear of any previous debts, attorney David P. Henninger said.

“The county will step into this with no prior liabilities whatsoever,” Henninger told supervisors.

After the hospital reopens, residents of Santa Paula and Fillmore would no longer face travel to Los Angeles or Ventura for emergency care, Supervisor Kathy Long said.

“This is a significant, watershed event for healthcare in the Santa Clara Valley,” said Long, who helped develop the pact.

The county operates Ventura County Medical Center in Ventura and a network of public health clinics across the region. As part of the county health system, Santa Paula Memorial Hospital would receive reimbursements from state and federal insurance plans.

It would also benefit from a strong mix of privately insured patients who prefer receiving treatment close to home, Long said. Officials have previously estimated the area’s healthcare market at $50 million a year.

“We don’t see this as being a drain on the county’s budget,” Long said.

Monty Clark, a spokesman for the Southern California Hospital Assn., said that it was unusual now for any entity -- whether public or private -- to expand healthcare.

“It’s a credit to the healthcare system in [the county] and the fact that they are able to find money to do this,” Clark said. “To work out an agreement where there is no county liability to the creditors is a very good deal.”

In contrast, other hospitals have been hit hard by large numbers of uninsured patients. The number of emergency rooms in Los Angeles County, for instance, has dwindled to 79 from 97 since 1988. Statewide, the number of acute-care hospitals has dropped from 525 in 1993 to 413 last year.

Meanwhile, Los Angeles County health officials are trying to blunt the effect of the proposed closure of the trauma unit at Martin Luther King Jr./Drew Medical Center in Willowbrook by opening a new trauma center at California Hospital Medical Center in downtown Los Angeles.

In Ventura County, supervisors attributed their success to a fiscally prudent policy and the quality of the healthcare administration.

The Board of Supervisors praised Health Care Agency chief Pierre Durand for being a tough bargainer and singled out Dr. Sam Edwards, a retired county hospital administrator who helped steer the rescue plan through months of complex negotiations.

By rezoning the 15 acres for residential development, Santa Paula city officials stepped to the plate as well, said Sean Walden, a spokesman for the creditors’ committee.

“This result satisfies the needs of all parties,” he said.

“Everyone is a winner.”