Verity Health weighs Northern California hospitals’ possible sale
The nonprofit owner and operator of four Northern California hospitals announced last week that it will explore “strategic” options, including a possible sale of some or all of the company’s hospitals.
Verity Health System, which runs O’Connor Hospital in San Jose, St. Louise Regional Hospital in Gilroy, Seton Medical Center in Daly City and Seton Coastside in Moss Beach, also runs two Southern California hospitals, St. Francis Medical Center in Lynwood and St. Vincent Medical Center in Los Angeles.
“The top priority of Verity’s board and management team is to establish a long-term, sustainable path forward for our hospitals, which are of critical importance to the communities they serve,” Verity Health CEO Rich Adcock said in a statement last week.
“Pursuant to Verity’s strategic plan, we are exploring a number of options to deleverage our balance sheet and address challenges our hospitals face after a decade of deferred maintenance, poor payor contracts, and increasing costs. As the board and management team work together to evaluate these options, the interests of our patients, employees and communities remain paramount,” Adcock said.
Cain Brothers and Dentons will act as financial and legal advisers respectively to Verity Health, which said it has not made any final decisions and will share more review-process information “once it is complete and further disclosure is appropriate.”
The company, formerly known as the Daughters of Charity, is run by Integrity Healthcare, whose purchase a year ago by NantWorks, a Culver City company owned by Dr. Patrick Soon-Shiong, was the fruit of six months of talks with New York-based hedge fund BlueMountain Capital Management.
Soon-Shiong, a billionaire doctor and entrepreneur, bought the Los Angeles Times and San Diego Union-Tribune newspapers in February.
Verity Health’s hospitals have long served as a safetynet system for many lowincome patients, and concerns about that function have long dogged purchase attempts.
One union, which represents more than 6,000 of the health system’s workers, expressed its concern about Verity’s options in a statement.
“We’re disappointed that Verity Health hasn’t been able to make this work. We hope the system, that has been such a critical service for underserved communities, can stay together,” said Sean Wherley, a spokesman for SEIU-United Healthcare Workers West. “Our expectation is that Verity and any new buyer will be held accountable to keep hospitals open, maintain vital services, fund pension obligations, protect jobs and honor our collective bargaining agreements.”