California’s Santa Clara County has cut a $175 million deal with HCA Healthcare to purchase a 258-bed hospital, a move the county says will restore critical care services for its residents.
The facility, Regional Medical Center (RMC) in east San José, covers about a quarter of the county’s total trauma cases and is located in “one of the highest need areas in our region,” the county said Wednesday. However, on Aug. 12, HCA downgraded the level of trauma, comprehensive stroke and other cardiac services offered at the hospital.
Santa Clara—which runs County Health System, a safety-net health system of 10 hospitals—said the change was a “significant” 25% jump in trauma patient volume at another of its hospitals with a Level 1 trauma center since HCA announced its plans to wind down services earlier in the year.
“Making [RMC] part of Santa Clara Valley Healthcare’s network of hospitals and clinics will ensure that East San José and the surrounding community continue to have access to top-notch Level II trauma, comprehensive stroke, specialized heart attack, and ultimately, labor and delivery care,” County Executive James R. Williams said in a release. “In addition, the County will not have to make significant investments to expand staffing and facilities at our other hospitals, which would otherwise be required, by building on HCA Healthcare’s facility investments and operations at [RMC].”
Those facility investments tallied more than half a billion dollars HCA put into the hospital over the past two and a half decades, Jackie Van Blaricum, president of HCA Healthcare’s Far West Division, said in the announcement. In more recent years, these have focused on improving access and addressing “the diverse medical needs of the East San José community, including meeting California’s seismic standards,” per the announcement. RMC also delivered $23 million in charity care and uncompensated care in 2023.
“We are pleased this move will position Regional Medical Center to continue providing access to affordable healthcare to patients in the area,” Blaricum said.
Santa Clara County said it not only intends to resume the downgraded services but will also work to restore obstetrics, labor and delivery and newborn care services that were ended in 2020. The county also noted that purchasing RMC outright would end payments to the hospital and HCA for patients for whom the county covers healthcare costs.
To pay for the facility, the county said it obtained approval for one-time funds from the Federal Emergency Management Agency as reimbursement for the county’s COVID-19 response efforts. It also plans to lease revenue bonds that use the hospital itself as pledged collateral.
According to an online FAQ on the deal, “the County Administration anticipates a combination of these two sources will be brought to the Board of Supervisors for approval to cover the purchase price without any negative impact on the County’s current budget or capital plan.”
The parties are now negotiating a definitive purchase agreement, undergoing due diligence and seeking necessary approvals but hope to close the deal in the opening quarter of 2025. The pair also aims to minimize disruptions in patient care and hospital employment through the process, they said.