Petaluma Health Care District sends hospital sale to voters

The Petaluma Health Care District board Tuesday voted unanimously to approve a letter of intent to sell Petaluma Valley Hospital to a Providence St. Joseph Health affiliate, despite objections from the union that represents nurses at the facility.

In a separate move, the board approved a ballot measure giving district voters final say over the hospital sale in the November election. If approved by voters, the district would sell the hospital for $52.6 million to NorCal HealthConnect, the secular affiliate of Providence St. Joseph.

The deal would require the new owner to continue operating the hospital as an acute care facility with an emergency room for at least 20 years. NorCal HealthConnect would continue to offer all current hospital services, with the exception of the family birthing center, which would continue for a minimum of five years.

A technical glitch in Tuesday’s virtual meeting meant some members of the public couldn’t tune in remotely. The health care district is going to redo the vote, which is not in doubt, Thursday ahead of Friday’s deadline to place measures on the November ballot.

Before the Tuesday meeting, the Petaluma Staff Nurse Partnership said in a statement it would not support the sale of the publicly-owned hospital to the Providence St. Joseph affiliate. The union and St. Joseph, which currently leases the hospital, are embroiled in tense contract negotiations.

“Right now, at the start of a 20 year commitment on the part of Providence to run PVH, is when investment in attracting and retaining much needed staff and a clear plan for growth of services is what the Petaluma community — and that includes its nurses — needs to see,” union President Jim Goerlich said in the statement. “To date, this is not happening and if things don't change drastically prior to the vote, nurses will be out in opposition to the sale. We could never endorse the sale of our beloved hospital to an entity that will not commit to providing us with the tools we need to safely take care of our community.”

A St. Joseph Health spokesperson referred comment to a joint statement from the district and Providence St. Joseph.

“Our desire to attain long-term stability for Petaluma Valley Hospital has never waivered,” Kevin Klockenga, Regional Chief Executive for Providence St. Joseph Health, said in the statement. “Our top priority has always been to ensure continued access to high-quality health care locally. This decision is the next step towards ensuring the hospital will continue to be here to serve Petaluma residents, and all those in need, for years to come.”

The November vote will mark the end of a five-year process to find an operator for the 80-bed hospital.

St. Joseph has operated Petaluma’s only hospital on an interim basis since its 20-year lease expired in 2017. The district entered talks with St. Joseph to extend the lease, but negotiations ended over financial terms, a non-compete clause and an unwillingness by the Catholic healthcare operator to provide some female reproductive services. St. Joseph Health merged with Washington-based hospital giant Providence Health in 2016.

The district selected Paladin Healthcare to lease the hospital in 2018, but that transaction ended when the Southern California company was unable to invest in an expensive electronic medical record system. Providence St. Joseph and Adventist Health attempted to form a joint operating company that was in talks to take over the hospital, but state Attorney General Xavier Becerra denied the move.

Ramona Faith, Petaluma Health Care District CEO, said in the statement that the deal with NorCal HealthConnect ensures the hospital’s survival.

After vetting all potential hospital operators and lease options, the District Board determined NorCal HealthConnect presented the best option for our community over the long term,” Faith said. “Our number one priority has been to ensure continued local access to a quality acute care hospital with an emergency department. While health care delivery has dramatically changed over the last decade and has put a strain on the viability of community hospitals, we are so thrilled that this community can continue to have a local hospital in Petaluma.”

NorCal HealthConnect is also set to purchase a health care district-owned hospital in Healdsburg.

The Petaluma Health Care District plans to invest proceeds from the sale of the hospital, it’s biggest asset, in healthcare programs in southern Sonoma County, including homeless, mental health and senior wellness services, Faith said.

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