State attempts to halt sale of South Bay hospitals to Santa Clara County

GILROY, Calif. (KGO) -- The California Department of Justice is attempting to block the sale of two South Bay hospitals to Santa Clara County.

In August, ABC7 News reported Verity Health filed for bankruptcy, putting the futures of some Bay Area hospitals on life support.

In December, Santa Clara County planned to spend $235 million to save two financially struggling hospitals - O'Connor Hospital in San Jose and St. Louise Regional Hospital in Gilroy.

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The money would've been a small price to pay to relieve overcrowding and expand the public system's reach.

The county announced its plans were recently halted, as California's attorney general filed a stay on the hospital sale.

"We're very unclear what's going on with the Attorney General's office," Santa Clara County Executive Jeff Smith told ABC7 News.

"It makes no sense. They essentially, I guess, are trying to accomplish something legally," Smith added. "But they're actually going to end up closing two hospitals."

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In a statement to ABC7 News, a spokesperson with the California Department of Justice (DOJ) said, "The California Department of Justice is committed to advocating for conditions that ensure communities have access to essential healthcare services."

The spokesperson offered some clarity, adding conditions would include 24-hour emergency medical services, operating facilities as general acute care hospitals, among other things.

According to the spokesperson, Santa Clara County has not yet agreed to those conditions as part of its purchase.

The U.S. Bankruptcy Court set a hearing date for Jan. 30.

"If the Attorney General blocks it and pushes the time period beyond March 1st, the deal is dead," County Executive Smith said.

He added, the move would be detrimental to patients, employees, and doctors.

"There's thousands of patients who get their care there. There's 2,000 employees that would lose their jobs," Smith said. "There's hundreds of doctors who would not have any place to admit their patients. It would have an enormous effect."

Smith told ABC7 News the county had plans to send out employment offer letters on February 9.

Now, he says, the county's only hope is that the attorney general withdraws the appeal and withdraws the request for a stay.
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