Santa Clara County Acquires RMC for $175 Mn

The county's decision comes in response to HCA's recent downgrade of trauma, stroke, and cardiac services at the hospital, which has significantly impacted the local healthcare landscape.

Santa Clara County has entered into a $175 million agreement with HCA Healthcare to purchase the 258-bed Regional Medical Center (RMC) in East San José. 

The county's decision comes in response to HCA's recent downgrade of trauma, stroke, and cardiac services at the hospital, which has significantly impacted the local healthcare landscape.

On August 12, HCA Healthcare downgraded key services at RMC, including Level II trauma, comprehensive stroke, and specialized cardiac care. 

This decision resulted in a 25% increase in trauma patient volume at the county's other Level I trauma center, straining resources and raising concerns about access to critical care in the region. 

According to county officials, RMC, which handles about a quarter of the county's total trauma cases, is located in one of the highest-need areas.

Commenting on the same, county executive James R Williams said, "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."

Expansion of Services

Santa Clara County's acquisition of RMC aims to reverse HCA's service reductions and restore essential healthcare services. The county plans to reinstate obstetrics, labor and delivery, and newborn care services, which will be discontinued in 2020. 

The purchase will also eliminate the need for the county to make payments to HCA for patients covered under the county's healthcare system.

By integrating RMC into its existing healthcare network, the county intends to restore services and avoid significant investments in expanding staffing and facilities at its other hospitals. 

Williams highlighted that the county would benefit from the investments HCA has already made in RMC's facilities, which include over half a billion dollars spent on improvements over the past 25 years to meet California's seismic standards and enhance access to care.

Timeline for the Acquisition

Santa Clara County has secured approval to use one-time funds from the Federal Emergency Management Agency (FEMA) as reimbursement for COVID-19 response efforts. 

The county also plans to finance the purchase through leased revenue bonds, using the hospital as collateral. 

The county administration is expected to present a combination of these funding sources to the Board of Supervisors for approval, ensuring that the acquisition does not negatively impact the county's current budget or capital plan.

The parties involved are negotiating a definitive purchase agreement, undergoing due diligence, and seeking the necessary approvals. 

They aim to close the deal in the first quarter of 2025, focusing on minimizing disruptions to patient care and hospital employment.

Statements from HCA Healthcare

HCA Healthcare's Far West Division President, Jackie Van Blaricum, acknowledged the sale, noting that the healthcare provider had invested significantly in RMC over the years to meet the diverse medical needs of the East San José community. 

"We are pleased this move will position Regional Medical Center to continue providing access to affordable healthcare to patients in the area," Blaricum said.