Thursday, March 29, 2012

St. Rose Gaining Recapitalization Money

Mar. 29, 2012 | The fundraising drive to save St. Rose Hospital from financial ruin has already brokered most of estimated $18 million the facility needs to stay in operation for the next six months, said the director of Alameda County Healthcare Services.

Alex Briscoe, who heads the county's health care mechanism, said between $10-$14 million of funding has already been promised by a host of entities for the "recapitalization of St. Rose," as he put it Tuesday during an special San Leandro ad hoc committee discussing the future of neighboring San Leandro Hospital. “That's a fancy way of saying, 'let’s keep them afloat until we can turn them around,'" he added.

He reiterated negotiations are continuing over a potential joint powers agreement that would allow for short-term stability at the hospital. St. Rose officials told the Alameda County Board of Supervisors earlier this month that the facility is hemorrhaging nearly $1 million per month as it struggles to meet payroll and pay vendors.

The Washington Township Health Care District in Fremont along with the Eden Township District and the Alameda County Medical Center are in talks to form, what Briscoe characterized, as a "transitional government" that would eventually ease St. Rose into a close partnership with the more economical stable Washington Hospital.

“What we hope for long-term is not that the joint powers authority operates the hospital," said Briscoe. "We actually believe the long-term solutions is to annex into a two-hospital system."

He said an arrangement for a JPA situation would likely afford Washington Township with the right to maintain a majority of the seats on a the new board of directors.

A huge stumbling block to the formation of a JPA operating St. Rose, regardless of who enters into the agreement, rests with a state-backed creditor on the hook for much of St. Rose's debt, said Briscoe. Cal Mortgage owns $50 million of secured debt tied to St. Rose. Another $10 million in unsecured debt also exists, said Briscoe, mostly in the form of delinquent payments to vendors for services and supplies.

Earlier in the meeting, Briscoe characterized both San Leandro Hospital and St. Rose as "well-run institutions." Although, he said later part of St. Rose's perennial struggle with staying in the black was due to their inability to negotiate equitable insurance rates, at least, not as well as neighboring Washington Hospital. Earlier this month, St. Rose's CEO Michael Mahoney abruptly resigned.

As negotiations over St. Rose's future continue, Briscoe believes his agency will bring back the issue to the county board of supervisors, most likely April 17.


Interresting report, except, no comment on the elephant not in the room-Sutter Health Care. San Leandro, Eden Township Hospital district, cannot enter into any agreement until they get the elephant off its back. that is not going to happen for awhile. Tony Santos

Stand by, Mr. Mayor. The Sutter article is coming up soon. This is the St. Rose part.

"well -run institution" How else have we survived this long??? We as St Rose employees know that we cant run any leaner than we have been. Recently we have been asked to tighten up even more! We and our patients need a reprieve.

If you ran a business where 88% of your customers required a discount off your normal break even profit, how long could you stay afloat? Hang in there St. Rose Hospital employees! Mr. Briscoe, is Santa Claus somewhere?

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