Election sealed Petaluma hospital’s fate

Just after midnight on New Year’s Day 2021, Petaluma will no longer have a publicly-owned hospital for the first time in 74 years.

The fate of Petaluma Valley Hospital — a $52.6 million sale from the Petaluma Health Care District to an affiliate of healthcare giant Providence St. Joseph Health — was sealed on Nov. 3 when voters overwhelmingly approved Measure CC.

The ballot measure received 85% support to approve the hospital sale to the affiliate, NorCal HealthConnect. Included in the deal is a provision that requires the new owners to maintain the 80-bed facility for the next 20 years.

For Ramona Faith, CEO of the health care district that serves southern Sonoma County, securing a future for the hospital was the culmination of a five year effort.

“Petaluma Valley Hospital has a bright future,” she said. “I am excited to have secured that future.”

The passage of Measure CC likely won’t change much in the near term at Petaluma Valley Hospital, healthcare officials said. The new owners have committed to keeping all of the current services and employees through the transition.

NorCal HealthConnect has also committed to investing millions in the facility, including upgrading aging infrastructure in the building and adding new services.

Kevin Klockenga, CEO of NorCal HealthConnect, declined to say which services the company would add. Through a spokesperson, he said the company is still in the early stages of planning for the future of the hospital.

“Planning is in progress and we won’t have more specifics until that is done,” Spokesperson Steve Buck said in an email.

The only service at risk of being cut in the near term is the family birthing unit. The deal only requires the new owners to maintain obstetrics at the hospital for five years, although Klockenga has said the company has no plans to end the service after that time.

The fate of the OB unit emerged as a sticking point in the Measure CC campaign, with the Petaluma Staff Nurse Partnership, which represents nurses at PVH, campaigning against the measure.

The nurses union is also in contentious negotiations for a new contract. Jim Goerlich, president of the union, said he hopes the settling of the hospital’s future speeds up the contract negotiations. Outstanding issues include staffing levels and financial terms, he said.

“We want to see a contract that reflects a desire to keep good nurses at the hospital,” he said.

The Measure CC campaign was the first election where the nurses union flexed its political muscle. The union held rallies and attracted local political candidates to speak out in support of the union’s cause.

Goerlich said the union plans to remain active in local healthcare related issues.

“If we had more time on Measure CC, we could have had a better campaign,” he said. “Where we can make good ties in the community, we will continue to do it.”

One significant impact of the sale is a windfall of funds for healthcare programs in the Petaluma Health Care District. Faith said the district is working with financial advisers to invest the $52 million from the hospital sale to provide a corpus of funds to support its programs.

The passage of Measure O, the countywide sales tax for mental health programs also on the November ballot, could lead to some healthcare grants that the district can match using hospital sale proceeds, Faith said.

“We are going to very carefully, and with community feedback, determine how to best manage and distribute these funds,“ Faith said. ”Our work is kind of just beginning. There are a lot of opportunities.“

While Faith said she would have liked to have kept the hospital in the public’s hands, she said the sale was the only viable option for saving the facility in a healthcare landscape where many community hospitals have closed.

During the past five years, the district explored and exhausted all options, including renewing the 20-year lease with Providence St. Joseph and looking at bringing in an outside company to manage the hospital. In the end, the sale offered renewed investment in the hospital, a long term commitment and cash for the district, Faith said.

The district will still play a role with a seat on the hospital board and an obligation to see that NorCal HealthConnect keeps the covenants in the deal.

On New Year’s Day, when the hospital changes ownership, Faith said it will be a relief to have reached the conclusion of the hospital transition.

“It feels like a big weight off my shoulders,” she said. “There were a lot of curveballs, and the process was complex, but we kept putting one foot in front of the other and things fell into place.”

(Contact Matt Brown at matt.brown@arguscourier.com.)