City sends ‘wish list’ to Adventist

Local folks may never learn what offers were made to buy the hospital they helped build or who made the offers.

Adventist Health, owner of South Coast Medical Center since 1998, is expected to make a decision at its meeting Wednesday, according to a report made at a special City Council meeting Tuesday, but it never had to reveal to the public or even the City Council what the sellers’ offers included.

“Keep in mind that we do not know what is in the bids, but we have had the opportunity to meet with several of them,” said Assistant City Manager John Pietig.

And Adventist permitted the meetings only after the council agreed to withhold the identities of the bidders.


“The hospital has been for sale three times in the last five years,” said Mayor Pro Tem Cheryl Kinsman, who has served with Mayor Jane Egly and Pietig on the council’s hospital subcommittee. “This is the best [timing] because now people want us. Everyone else is overcrowded and is saying ‘There is South Coast Medical Center.’”

Adventist’s preferred buyer will be subject to approval by Atty. Gen. Jerry Brown, who will likely take two or three months to review the impacts of the proposal and to hold a public hearing locally, according to Pietig’s report.

“If the transaction is approved, the attorney general has the authority to place conditions on the approval of the sale that must be met by the new owner and in some cases by the seller,” Pietig said. “These conditions typically require that specified medical services continue to be provided for a period of time determined by the attorney general.”

One of the biggest concerns is that Adventist will sell to a buyer principally interested in the underlying value of the land on which the campus sits and a vacant parcel above it, with an eye on speculative development opportunities.


“That real estate is too tantalizing for a for-profit group,” said Planning Commissioner Anne Johnson, who supports continuation of the hospital’s not-for-profit status.

However, the council has control over discretionary planning and zoning of the property, including proposed changes in land use.

“It may be important to remind all participants of this fact,” Pietig said.

The council approved nine recommendations to be forwarded to the Adventist board. Councilwoman Elizabeth Pearson did not attend the meeting or participate in any of the numerous closed sessions the council has held on the hospital sale because she is a medical center employee.

Council recommendations for the new owner:

 Provide the community with a long-term commitment to maintain a general, acute care hospital with basic emergency medical services 24 hours a day, seven days a week.

The city also would like to see radiation therapy, not presently provided.

“This is the key condition,” Pietig said. “These services are essential to the community and to minimize the distance public safety personnel must travel when conducting emergency transports.”


 The new owner should demonstrate the commitment and financial ability to purchase the assets, modernize the hospital and address seismic improvements when they are required.

 Continue to operate as a not-for profit hospital.

“The council understands that there may be potential acquirers of the medical center that would commit to the criteria, except they would plan to operate the hospital as a for-profit entity,” Pietig said. “Considering that each proposal would be different, the council would have to evaluate them on a case-by-case basis.”

 Have substantial experience operating a full-service hospital and an emergency room.

 Possess a high degree of integrity and a good reputation in the communities it serves.

 Maintain existing levels of participation in Medicare and Medi-Cal, and committee to negotiating in good faith to secure contracts with health insurance plans covering the majority of the local insured population.

 Retain the existing medical staff, nurses and volunteers to the greatest extent possible.

 Establish a local governing board with community representation.


 Maintain charity and indigent care at the present level.

If there are no viable bids to operate the medical center by the recommended criteria, the city would review the proposals on a case-by-case basis before taking a position.

The special meeting Tuesday was called to authorize Egly and Kinsman to sign the letter stating the council’s recommendations.

However, Egly made a motion, seconded by Kinsman, to include the signatures of all voting council members.

BARBARA DIAMOND can be reached at (949) 494-4321 or