KPC Global Last-ditch Effort to Reopen Hahnemann
A California-based hospital management company is planning to be in Wilmington Wednesday, hoping to provide an alternative option to selling Hahnemann University Hospital’s residents program assets to a group of area health systems for $55 million.
KPC Global, which wants to buy and reopen Hahnemann University Hospital, filed a notice last week of its intention to participate in Wednesday’s bankruptcy court hearing on the proposed asset sale.
Based in Santa Ana, Calif., KPC operates seven hospitals in Southern California. The company also owns and operates independent physicians associations, medical groups, urgent care facilities, and a variety of multi-specialty medical facilities on the West Coast. It was founded by orthopedic surgeon and entrepreneur Dr. Kali Chaudhuri, who serves as the company’s chairman.
The bankruptcy court filing submitted Thursday by KPC and its affiliate Strategic Group Management states, “KPC understands that there has been a substantial amount of community opposition to the closing of Hahnemann Hospital, all of which is consistent with KPC’s view that Hahnemann Hospital can be a viable and thriving facility, which will provide much needed health care to the community and continued employment for the doctors, nurses and other employees of Hahnemann Hospital; and continue as a first rate teaching hospital.”
According to the filing, KPC wants to purchase all of the assets of Hahnemann and St. Christopher’s Hospital for Children — should the residents program sale not be approved or consummated. KPC said its is prepared to offer $60 million for Hahnemann’s assets and would make an offer for St. Christopher’s within two-to-four weeks, unless the residents program sale is approved.
“KPC believes it is in the interest of all parties to be ready to pivot promptly to reopen and expand the sale process to include substantially all assets of Hahnemann Hospital,” the company stated in its filing.
Both Hahnemann and St. Christopher Hospital for Children’s are owned by American Academic Health System (AAHS) of California. AAHS acquired the medical centers from Tenet Healthcare Corp. for $170 million in early 2018. AAHS subsidiary Philadelphia Academic Health System, the parent organization for the two hospitals, and the two hospitals all filed for bankruptcy court protection at the end of June. The move came shortly after AAHS announced plans to close Hahnemann, because of mounting financial losses averaging nearly $5 million a month. AAHS also said at the time it wanted to find a new owner to operate St. Christopher’s.
KPC officials were not available to further comment on their interest in Hahnemann and St. Christopher’s.
Hahnemann, which had employed about 2,500 workers, shutdown late last month.
In mid-July four Philadelphia-based academic health care organizations — Einstein Healthcare Network, Jefferson Health, Philadelphia College of Osteopathic Medicine and Temple Health — created a consortium to collectively negotiate with AAHS for the potential purchase of the 188-bed St. Christopher’s Hospital for Children and its assets. No other entities have publicly expressed an interest in buying St. Christopher’s.
Last month, another coalition of local health systems emerged as the winner in an auction for Hahnemann University’s Hospital’s residents program assets with a bid of $55 million. Reading-based Tower Health, prior to the auction, had entered into a deal to buy the assets for $7.5 million and permanently redistribute the residency slots among coalition members. The assets consist of the more than 550 resident residency slots for training doctors. Hospitals are reimbursed for the costs of training residents by the Centers for Medicare and Medicaid Services (CMS). The health systems in the coalition have already hired hundreds of former Hahnemann employees and provided a temporary home for more than 250 displaced Hahnemann residents.
Other objections were filed by the state of Pennsylvania, which said the proposed sale and bidding procedures failed to appropriately take into account state laws and regulations regarding the licensing of hospitals in the state and the Pennsylvania Department of Health’s authority and obligation to oversee hospital licensing. MidCap Property Trust, an affiliate of MidCap Financial, also filed an objection. MidCap is owed $58.6 million for loans it provided to PAHC and its related entities. MidCap said it would object to any sale that does not involve payment of the sale’s proceeds to MidCap at the closing.
Another limited objection was filed by The Association of American Medical Colleges and the Philadelphia-based Educational Commission for Foreign Medical Graduates, which raised concerns about the proposed agreement’s absence of details on insurance coverage for continuing residents and details about the retention of residents’ program records that provide information related to their training and the patients they treated while at Hahnemann. Temple University Health System also filed a limited objection stating it is owed about $850,000 — a debt not covered in the proposed sales agreement — under the terms of an academic affiliation agreement it signed in 2007 with Tenet related to training activities at St. Christopher’s Hospital for Children.
KPC Health Founder, Chairman Receives ‘Above and Beyond’ Award From Crime Survivors
CORONA, Calif., Aug. 15, 2019 (GLOBE NEWSWIRE) — Dr. Kali P. Chaudhuri, Founder and Chairman of the KPC Group and KPC Health, was recently presented with the “Above and Beyond” award from the Southern California based non-profit, Crime Survivors. Crime Survivors’ mission is to provide hope and healing to victims and survivors of crime through advocacy and the support of resources, information, and empowerment from the critical time after a crime occurs, through the challenges and successes of surviving and thriving.
In April of 2018, Dr. Chaudhuri and KPC Health generously provided space to establish the first Crime Survivors Resource Center in Southern California. The resource center is located adjacent to Orange County Global Medical Center and Regional Trauma Center in the KPC Health corporate office building and is a place where survivors of crime can find the support and resources they need. The award was given to Dr. Chaudhuri in recognition of this contribution.
The award was presented at Crime Survivors’ annual Hope Gratitude Gala on Friday, August 2nd, which was co-chaired by Orange County District Attorney Todd Spitzer and Orange County Sheriff Don Barnes, and featured veteran and international hero, Spencer Stone, as the keynote speaker.
“We are extremely grateful to Dr. Chaudhuri and KPC Health for their generous support for the Crime Survivors organization,” said Patricia Wenskunas, Founder and CEO of Crime Survivors. “Having a brick and mortar Southern California Resource Center better enables us to provide critical support services to survivors of crime and is a major milestone for our organization.”
“KPC Health is proud to support such an incredible organization that provides a voice for the voiceless and does so much good work for our community,” said Dr. Kali P. Chaudhuri, Founder and Chairman of the KPC Group and KPC Health. “Patricia Wenskunas is a selfless person that is committed to an important cause, and we look forward to supporting her and Crime Survivors in their future endeavors.”
“Dr. Chaudhuri understands that providing quality healthcare is about more than simply treating a patient when they are sick or injured,” said Peter Baronoff, CEO of KPC Health. “It also requires a commitment to, and investment in, the communities we serve. Dr. Chaudhuri’s work with Crime Survivors is a perfect demonstration of his passion for helping others, especially the truly vulnerable in our society.”
KPC Group Announces Dr. John Heydt as Chief Clinical Officer of KPC Health and Chief Executive Officer of Apex Medical Group
CORONA, Calif., Aug. 06, 2019 (GLOBE NEWSWIRE) — Today KPC announced the appointment of Dr. John A. Heydt as Chief Clinical Officer (CCO) of KPC Health and Chief Executive Officer (CEO) of Apex Medical Group, a subsidiary of the KPC Group. Dr. Heydt is a nationally renowned physician executive and has significant experience in the Southern California healthcare market.
Most recently, Dr. Heydt served as Chief Academic Officer of Borrego Health, where he established an affiliation between Hemet Valley Medical Center and Borrego. Prior to that, Dr. Heydt served as Senior Associate Dean of Clinical Affairs for UC Irvine School of Medicine and UC Riverside School of Medicine. He also served as CEO of the UC Riverside Health Medical Group.
Dr. Heydt has held a number of executive leadership roles, including CEO of Drexel University Physicians, Chief Quality Officer and Chair of Family, Preventive, and Community Medicine at Drexel University College of Medicine, Director of Urgent Care at UCLA Medical Center, and Chief Medical Officer at the Medical College of Pennsylvania Hospital. Dr. Heydt attended medical school at Temple University School of Medicine and completed his residency in Family Medicine at UCLA Medical Center. He is board certified in both Family Medicine and Sports Medicine.
“Dr. Heydt has an esteemed record and we are honored he has decided to join our team,” added Dr. Kali P. Chaudhuri, Founder and Chairman of the KPC Group and KPC Health. “His clinical and academic leadership experiences will enhance our rapidly growing health system to ensure we deliver the most advanced healthcare to the communities we serve.”
“As a physician executive, Dr. Heydt has just the kind of leadership skills and clinical expertise necessary to ensure our clinical operations meet the highest standards for our patients,” said Peter Baronoff, CEO of KPC Health. “He will be great asset to the KPC Health System and Apex Medical Group as we broaden access to specialty services.”
“I am thrilled to join the KPC Health system and look forward to contributing to a growing healthcare system,” said Dr. John A. Heydt, CCO of KPC Health and CEO of Apex Medical Group. “I am especially excited about the opportunity to work with some of the top physicians in Southern California.”
KPC Health owns and operates a group of integrated healthcare delivery systems consisting of acute care hospitals, Independent Physician Associations, medical groups, and various fully integrated multi-specialty medical facilities. KPC Health’s current system of hospitals includes seven full-service acute care hospitals located throughout southern California. In addition, KPC Health recently received court approval to acquire four California hospitals, and seven long-term acute care hospitals and two skilled nursing facilities located in Kansas, Utah, Mississippi, Arizona, Louisiana, and Texas. Once finalized, these acquisitions will bring KPC Health’s integrated healthcare system to 20 facilities nationally.
KCP Global Health Care Center in Hemet Welcomes New Physician Residents
Thirty-five recently graduated medical and osteopathic doctors received their white coats in special ceremonies, June 28, at the KPC Health Center in Hemet officially recognizing them as physicians beginning their one to three year residencies in their chosen specialties.
The new doctors come from top rated medical schools in the United States and across the globe and will be assisting local doctors on their rounds at the recently renamed KPC Hemet Global Medical Center and KPC Menifee Hospitals. The residents will learn the fine points of their chosen specialities from working Physicians for Healthy Hospitals at the local medical centers.
The doctors were greeted and welcomed by Peter Baronoff, the CEO of KPC Health.
“It is really the beginning of what’s it all about being a physician,” he said to them. “We hope some of you will want to stay after your residency.”
Dr. Sumanta Chaudhuri Saini, director of medical education, introduced the faculty to the new residents who they will be working with. The faculty from the different specialities, attending the ceremony included DME program director Dr. Frederick White in radiology and Chaudhuri Saini who will head up internal medicine along with Dr. Veeravat Tae, the associate program director.
Chaudhuri Saini will also be in charge of the 18 residents in the 2019-2020 transitional year program who have chosen to stay another year to learn additional skills in their professions. Specialty residency programs such as the one at the KPC hospitals many continue from one to five years. Thus far nearly 99 doctors have completed their residency at the local hospitals in the last five years.with a number choosing to remain in the Hemet San Jacinto Valley in their own practices and specialties.
White presented white coats to first year internal medicine residents: Yuvraj Brar, MD; Mastaneh Nikravesh, MD; Ankit Dubey, MD; Natalia Jacobs, DO; Sabina Kumar, DO; Steven Noriega, MD; Jinesh Patel, MD; Naresh Purohit, MD; Jessica So, MD; Sergi Khodakivskyi, MD; Megan Locks, DO; Kevin Martin, DO; Mohammad Yousuf, MD, and Chukwuemeka “Emeka” Umeh, MBBS.
White also presented white coats to 2019-2020 second year radiology residents: April Garcia, DO; Kayra Rubio, DO, and John Thueson, DO.
Chudhuri Saini presented white coats to first year transitional residents: Christine Chang, DO; Neha Dhadwal, DO; Jaspreet Dhanjal, MD; Arka Dutta, MD; Medi Eslani, MD; Pete Flores, MD; Asmar Abdul Ghani, MD; Divya Gupta, MD; Jaxmyne Hefflefinger, DO; Ravi Janumpally, MD; Shadi Kazourra, MD, Poojitha Mummaneni, MD; Anphong Nguyen, MD; Muhammad Safwatullah, MD; Clinjto Schaefer, DO; Krystal Sood, MD, and Ashley Stratton, DO.
With their white coats, bearing their physician names, the residents raised their right hands to swear the osteopathic and Hippocratic oath led by Chaudhuri Saini.
Dr. So from Apple Valley, who received her medical training at St. George’s University School of Medicine in Granada, said she chose to take her residency at the KPC Global Medical Center in Hemet because the hospital itself offered what she said has an amazing faculty.
“I had kinda heard this from a friend before that it was a teaching population where you couldn’t get any better training anywhere else,” So said.
KPC’s Chaudhuri Aims For Kaiser-Like Integration
KPC Group founder Kali Chaudhuri is attempting to do what a private capital firm, a nonprofit charity, and Los Angeles’ wealthiest person couldn’t—turn around a struggling regional hospital system.
The Business Journal reported last month that Chaudhuri’s KPC planned to pay $610 million to acquire assets of bankrupt Verity Holdings LLC, a Redwood City-based firm that owned four hospitals—including Lynwood’s St. Francis Medical Center, a 384-bed trauma center in L.A. County—and a nursing facility.
Chaudhuri’s plan to revitalize those facilities may be to give the unionized workers a chance to own part of the hospital, something he’s done with other hospitals he turned around in Orange County.
“I came to America with $8 in my pocket,” Chaudhuri told the Business Journal. “The reason I work hard in America is because I own my own business, and our employees will work hard because they are owners.”
The ownership plan for Verity won’t immediately be available, as KPC will initially focus on restructuring.
“I’d like the program to be everywhere, but we need to make sure we properly size things up and integrate; it cannot be done right away,” he said.
Chaudhuri, a native of India, started his career as an orthopedist in the Riverside County town of Hemet, 75 miles east of Irvine.
He has since built Riverside-based KPC Group into a firm with $10 billion in assets in disparate industries like real estate, pharmaceuticals and engineering.
A subsidiary, KPC Healthcare Inc., is making the Verity purchase and is based in Santa Ana.
KPC Healthcare currently includes seven full-service acute care hospitals throughout Southern California. Its four hospitals based in Orange County are Orange County Global Medical Center, South Coast Global Medical Center, Anaheim Global Medical Center and Chapman Global Medical Center, which generated revenue of $382 million in 2018 combined.
It also operates independent physician associations and various medical facilities such as skilled nursing, behavioral health and ambulatory care sites.
In addition to buying four OC hospitals via bankruptcy sales, Chaudhuri has also purchased Hemet Valley Medical Center, Menifee Valley Medical Center and Victor Valley Community Hospital in Victorville, now known as Victor Valley Global Medical Center.
He compares healthcare inefficiency to water being wasted during a rainstorm.
“The water coming from the sky should all fall in one bucket so we can use it, redistribute it and save it,” he said. “Unfortunately, a lot of water is wasted and that is the problem we are figuring out.”
About 30 hospitals close annually, according to the American Hospital Association.
Chaudhuri likens his healthcare company’s integration plans to that of Kaiser Permanente, which has its own hospitals, HMO health plan and physician employees.
He foresees KPC Healthcare including medical and nursing colleges, a pharmaceutical company, in addition to hospitals and nursing homes.
Integration “allows us to look at the whole dollar,” he said.
Along with the Verity assets, KPC also recently announced plans to acquire seven of Promise Healthcare Inc.’s long-term acute care hospitals and two skilled nursing facilities in states like Kansas, Utah and Texas.
That deal is expected to be completed by the end of this month, a spokesperson said.
When all of the acquisitions are completed, KPC’s healthcare system will be comprised of 18 hospitals, totaling over 2,500 beds, and three healthcare facilities across seven states.
The combined entity will have approximately 10,000 employees and an estimated value of over $2 billion.
“KPC has had a great history of turning around hospitals,” said KPC Healthcare Chief Executive Peter Baronoff, who joined the Santa Ana company last July.
Baronoff, who co-founded and previously served as chairman and chief executive of Florida- based Promise, said that the combination of hospitals, clinics and skilled nursing facilities will enable KPC to provide “a variety of services critical to the communities these hospitals serve.”
The Verity purchase looks likely to be KPC’s biggest-ever challenge, in terms of a turnaround.
The hospitals were previously owned by the Daughters of Charity Healthcare System, which had continuous losses due to “mounting labor costs, low reimbursement rates and the ever- changing healthcare landscape,” according to a bankruptcy filing.
It was sold in 2015 to private investor BlueMountain Capital Management LLC, which changed the hospital system’s name to Verity. In 2017, Nantworks, a company controlled by billionaire Dr. Patrick Soon-Shiong, owner of the Los Angeles Times, acquired a controlling stake in Integrity Healthcare, the company that manages Verity.
Soon-Shiong poured tens of millions of dollars into the company to revitalize the hospitals, many of which are in lower-income neighborhoods. It reported a $111.4 million operating loss in 2018, triple that of the $35.3 million operating loss in 2017.
Last year, Verity went into bankruptcy and its assets were listed for sale. In April, an affiliate of KPC Healthcare won the bidding.
The transaction, which is still subject to review by the California Attorney General, is comprised of St. Francis Medical Center in Lynwood, St. Vincent Medical Center and St. Vincent Dialysis Center in downtown Los Angeles and Seton Medical Center in Daly City. The hospitals total 1,107 beds. Seton operates Seton Medical Center Coastside in Moss Beach, a 116-bed skilled nursing facility.
The biggest prize is the St. Francis Medical Center, which was valued at $420 million. It’s a Level II trauma center that handles more than 80,000 emergencies a year, according to its website. The purchase gives KPC two major trauma centers in Southern California.
As part of the agreement, KPC has agreed to keep main service lines open and make employment offers to substantially all employees at these facilities, including full-time, part- time and contract workers.
KPC’s pledge was important to its winning court-overseen bid.
“Labor is very important, [comprising] of 60% [of the cost] of the delivery of healthcare,” Chaudhuri said.
Chaudhuri declined to comment on taking on a task where others like Soon-Shiong didn’t succeed.
“I don’t buy everything that comes to the market, I only buy things that would create value for my organization,” he said.
Growing the base of medical workers is high on Chaudhuri’s priority.
In 2003, he established the first private medical school in Bengal, India, where he now has a 25- acre campus comprised of KPC Medical College and Hospital, as well as the Shova Rani Nursing College and Paramedical College that provides medical services to residents of the Indian city of Kolkata.
He’s excited about his latest education project—a new college in Hemet, where he resides with his wife, Sunanda.
“The most important thing in healthcare today is the shortage of doctors, nurses,” he said.
Demand for healthcare workers will outpace supply by 2025, and the U.S. will need to hire 2.3 million new healthcare workers to meet demand, according to a recent report by Mercer LLC.
While the Hemet project is in the early planning stage, Chaudhuri said the program he’s starting will encourage doctors and nurses to go to rural areas, where the rate of physicians to patients is 1-to-2,500 in rural America, according to National Rural Health Association estimate. –
“I have to tell you, I don’t have all the solutions and I don’t like to talk a lot before it happens, but I’d like to do my best,” Chaudhuri said.
Hemet Valley Medical Center Gets $30 Million ‘face lift’ — and a New Name
Southern California health care business KPC Health has acquired Promise Hospital of Baton Rouge, a former subsidiary of Promise Healthcare, a Boca Raton, Florida-based hospital business.
Promise Healthcare Group’s hospital network across Louisiana was acquired several months after it filed for bankruptcy protection in 2018. The network was split between KPC Health and Lexmark Holdings.
The Boca Raton, Florida-based company specialized in short-term and long-term acute care hospitals in addition to skilled nursing facilities in several states. In March, KPC Health announced that it planned to acquire a hospital in Louisiana, but did not specify which one. Financial details about the sale were not disclosed, but KPC Health did secure a line of credit for working capital from international investment bank Credit Suisse Group AG, records show.
Since filing for bankruptcy in November 2018, the Promise Healthcare sold off three Florida hospitals to Mechanicsburg, Pennsylvania Select Medical for $63 million. It also sold the 146-bed hospital in Shreveport along with its Bossier City hospital for roughly $35 million combined to Lexmark Holdings, records show.
Meanwhile, Santa Ana-based KPC Health has been on an acquisition spree, snapping up hospitals out of bankruptcy across the country in recent months. It had offered $610 million in a bid to buy a bankrupt chain of hospitals in California owned by Verity Health earlier this year and was awarded the deal in April. The deal to acquire the Baton Rouge hospital was lumped together with six other long-term acute care hospitals across the U.S. once run by Promise Healthcare.
Promise Hospital’s CEO for Baton Rouge, Kiley Cedotal, deferred questions to the new owners. Cedotal has been in the role since November 2014, according to his LinkedIn profile. KPC Health did not respond to requests for comment by late Wednesday.
Promise Healthcare had filed for bankruptcy with more than $500 million in corporate debt. The hospital struggled overall amid a nationwide decrease in reimbursement rate for Medicare patients, according to court records. Promise Hospital attempted to invest in new business projects, which were later abandoned, records show. By fiscal year 2016, it had posted a $5.2 million operating loss. One year later, that swelled to $25.2 million.
Financially its Louisiana hospitals were performing better than those in other states, Danny Brown, landlord for Promise Hospital’s Baton Rouge facilities told The Advocate in November. But the company faced some legal battles.
In 2016, Promise Hospital was accused of improperly billing Medicare for treatment of a rare protein deficiency known as Kwashiorkor by the U.S. Department of Health and Human Services’ inspector general. Promise Hospital was also ordered to pay $1 million to Amerihealth Caritas Louisiana, a business which handles managed-care services for the state’s Medicaid program, over claims of double billing for services.
Hemet Valley Medical Center Gets $30 Million ‘face lift’ — and a New Name
What used to be the medical records room is now packed with new X-ray equipment and hospital beds. Residents — also new — help doctors track dye through a patient’s blood vessels in the new $10 million catheterization laboratory.
Down the hall, decorative wooden chairs and framed flower paintings greet surgery patients in the renovated day surgery outpatient recovery area.
“It’s as if the whole hospital received a face lift,” said Keith Garrison, vice president of facilities management and hospital operations for KPC Global Healthcare.
Repainted, remodeled and soon-to-be-officially renamed as Hemet Global Medical Center, Hemet’s hospital has big aspirations for the San Jacinto Valley and beyond — and for itself.
Hemet Valley Medical Center, which next month becomes Hemet Global, recently finished the first stage of its three-part, multi-million-dollar capital improvement project. The effort, so far, has included more than $30 million in remodeling, upgrades and new additions. Among the updates, Garrison said, was a new, $22,000 senior waiting room where older patients can relax before seeing a doctor. It opened Tuesday, May 28.
The hospital also spent $1.2 million upgrading its linear accelerator, a large machine that sends high-powered sub-atomic particles deep inside the body to destroy tumors. In addition, on the roof above the catheterization lab, a dense network of newly constructed beams, stilts and vents protects the building from earthquakes.
The KPC Group, of which KPC Global Healthcare is an affiliate, made $2.4 million of improvements to Menifee Valley Medical Center. The hospital will change its name to the Menifee Global Medical Center about the same time as the Hemet hospital’s name change.
Dr. Kali Chaudhuri, founder and chairman of the KPC Group, said the project is only the beginning.
Chaudhuri and his team have had discussions with the Pomona-based Western University of Health Sciences about starting a medical school next to Hemet Global Medical Center. While KPC Group has created early renderings for buildings, Western University spokesman Jeff Keating said discussions have not led to anything definitive.
Still, medical education is ongoing at the hospital. A residency program started in 2015 has now grown to over 39 residents, and there are plans to grow even further. Chaudhuri’s proposed school aims to address the Inland Empire’s chronic doctor shortage.
“We have a huge problem recruiting the doctors in Hemet,” he said. “Nobody wants to come here. If they come here and go to school, hopefully they will find their sweetheart and they will stay here.”
This venture is not new for him: In 2006, the orthopedic surgeon opened a 1,800,000-square-foot teaching hospital in West Bengal, India. Hospital administration itself is a well-worn path for Chaudhuri, whose company now owns six other acute care hospitals across Southern California, including four in Orange County.
Filipinos Breathe Sigh of Relief as Daly City Hospital Finds New Owners
DALY CITY, California — In a town hall meeting after Seton Medical Center management filed for bankruptcy in August 2018, Girlie Macaraig, a registered nurse in Seton Medical Center for 40 years and her colleagues feared what could happen in the next months as a new owner was being.
“The patients too were scared as Seton has always been a good hospital for the community. Will the hospital still stay open? We have very good doctors, nurses — an overwhelming number of whom are Filipinos — and staff members consisting of orderlies, CNAs, dietitians, technicians and transporters most of whom are also Filipinos,” Macaraig worried.
“We still continue to work and care for our patients. We hope and pray that the hospital remains open and that it will support the city, the community, nurses and other hospital staff.”
Macaraig’s group’s prayers appear to have been answered. San Mateo County Supervisor David J. Canepa, whose 5th county district includes Daly City, announced that U.S. Bankruptcy Court Judge Ernest M. Robles approved KPC Health System’s acquisition of Seton Medical Center in Daly City, Seton Coastside in Moss Beach, St. Vincent Medical Center in Los Angeles and St. Francis Medical Center in Lynwood — all in California for $610 million.
KPC is owned primarily by Founder and Chairman Dr. Kali P. Chaudhuri. “KPC has committed to keeping these hospitals open and that’s incredible news for Seton’s employees and the tens of thousands of mostly vulnerable patients in San Mateo and San Francisco counties they care for each year,” disclosed Canepa.
“Now we have a prospective owner with a proven track record in California of operating and revitalizing multiple hospitals. I am optimistic that the new owner will respect the conditions set by the state Attorney General’s Office that mandate Seton remain a full-service hospital with emergency services until 2025.”
In an earlier exclusive interview a week before the bankruptcy court decision came out, Canepa shared that he had spoken with KPC Heath System Chief Executive Officer (CEO) Peter Baronoff.
“I made it very clear to them that we are looking for an acute care hospital that would continue to operate as is and provide services. Without Seton Hospital, there is a huge gap in the way we deliver health care and we talked about health care access that has now become a social justice aside from being a human right issue. Also, we have to make sure that all the nurses and all the other jobs remain,” reiterated Canepa.
The KPC-SGM Group presently operates Orange County Global Medical Center, Anaheim Global Medical Center, Chapman Global Medical Center and South Coast Global Medical Center all in Southern California.
On ensuring the earthquake safety capability of the hospital, Canepa assured that the Attorney General made it clear that Seton must be seismically safe until 2030, and that KPC has agreed to uphold this condition mandated by former California State Attorney General (now U.S. Senator) Kamala Harris.
Daly City Mayor Ray Buenaventura welcomed the good news that Seton Hospital would continue to operate under KPC Health System. “I have met the proposed new owners. My sense is that they are sincere. Daly City is a compassionate city and we will continue to govern with that guiding principle,” remarked Buenaventura.
Daly City Councilmember Juslyn Manalo stressed that “Seton hospital must remain as an institution central to our community. We will advocate for patient care and the workers,” Manalo promised.
In the remote possibility that the sale agreement fails, Canepa assured that there were multiple bidders and interested buyers. One such group is Apollo Medical Holdings (AMP) that has a hundred of its doctors serving in Seton Hospital.
AMP Chairman of the Board Dr. Kenneth Sim Apollo hopes the AMP and its doctors together are given the chance to make a bid for Seton if the current agreement does not work out.
Seton Sale Overcomes Big Hurdle
Nearly three months after a bid to acquire Seton Medical Center in Daly City and Seton Coastside in Moss Beach was filed in federal bankruptcy court, Southern California-based KPC Health announced its $610 million bid for four hospitals was approved by U.S. Bankruptcy Court Judge Ernest M. Robles Wednesday, according to a press release issued by KPC Health.
By moving to acquire the two facilities in San Mateo County alongside St. Francis Medical Center in Lynwood, St. Vincent Medical Center in downtown Los Angeles and St. Vincent Dialysis Center, KPC Health’s offer to purchase the financially-challenged facilities formerly operated by Verity Health now awaits approval by California Attorney General Xavier Becerra.
News of the milestone for the two Seton facilities was welcomed by San Mateo County Supervisor David Canepa, who expressed relief that critical services would remain in place at the two health care facilities delivering care to the indigent. Having met with members of KPC Health, Canepa was confident the group will bring an end to the uncertainty that has been looming over the facilities many expected to shutter.
The “stalking horse” bid KPC Health filed in January was not exceeded by any other proposed bids and no auction was required for the four Verity Health hospitals. The group’s bid was also approved by Verity Health System’s Board of Directors April 15.
Owner and operator of seven full-service acute care hospitals in Southern California, KPC Health’s integrated health system is set to include 20 facilities across the nation once ongoing acquisitions of hospitals and skilled nursing facilities in Arizona, California, Kansas, Louisiana Mississippi, Texas and Utah are complete, according to the release.
Dr. Kali P. Chaudhuri, chairman of The KPC Group and KPC Health, said the judge’s decision Wednesday marks an important milestone for KPC Health’s bid to acquire the four remaining Verity Health hospitals. Despite an attempt on behalf of Becerra to block the sale of two other hospitals previously operated by Verity Health in San Jose and Gilroy, Santa Clara County’s bid on O’Connor Hospital and Saint Louise Regional Hospital was finalized in March, according to multiple news sources.
“We look forward to working with Verity Health on a successful acquisition and welcoming these important community hospitals into our integrated [health care] system,” Chaudhuri said in the release.
The financial uncertainty looming over the 350-bed Seton Medical Center, Daly City’s largest employer, as well as the 116-bed coastside hospital and skilled nursing facility has weighed heavily for officials, residents and employees of the facilities since Verity Health filed for bankruptcy in August.
Canepa represents north county’s District 5 on the Board of Supervisors and acknowledged the benefits of the sale for residents living in northern San Mateo County who depend on its services or are among Seton Medical Center’s 1,600 employees. But he also noted the benefits to county taxpayers who could have been on the hook for the hospitals if no buyer stepped forward.
County officials have already contributed some $25 million for patient care and set aside $15 million toward a seismic upgrade project at the Seton Medical Center, and Canepa expected the county to continue to help the hospitals when possible. But he also acknowledged San Mateo County Health officials have projected a structural deficit for County Health’s two-year budget starting in the 2019-20 fiscal year.
Before Santa Clara County’s bid for the San Jose and Gilroy hospitals was approved, Becerra appealed the sale, asking at the time for the existing conditions protecting the health and safety of the hospital community to be preserved. Canepa expected Becerra to determine whether he would approve the sale in the next few weeks.