The West Contra Costa Healthcare District unanimously approved the sale of four secondary properties to the City of San Pablo Wednesday, netting the district $7.5 million as it attempts to delay the closure of financially ailing Doctors Medical Center.
While no definitive decision has been made to close, the writing appears to be on the wall for the struggling hospital, which has been losing about $18 million a year. With only enough cash on hand to make payroll through early March, the district will consider using the San Pablo funds to pay for an “orderly closure,” a process that could take several months.
Closing the hospital is expected to cost $4 million to $6 million, money that would be used for payroll, pension, workers compensation, severance, insurance and contractual obligations.
Next week, the board is expected to release the results of a poll taken to determine taxpayers’ support for a new parcel tax, a last-ditch effort to keep a full-service hospital open. Board Chairman Eric Zell said the poll would have to show strong support for the district to move forward with the idea, noting that just putting a tax measure on the June ballot would cost the hospital $200,000. Last year, a similar measure failed to win voter support.
The deal approved by the healthcare district board Wednesday gives San Pablo title to two medical office buildings, a parking lot and a condominium, all along Vale Road. In exchange, the city will pay the hospital $3 million in March and $4.5 million in April. If the hospital were to continue to operate as a full-service facility, the infusion of cash from the city would run out by the middle of June, according to the district’s financial consultants.
Last year, a regional planning group of health-care experts analyzed alternatives to a full-service hospital and recommended an urgent care center as the most effective long-term solution. Regional hospitals, which have contributed $24 million over the past several years in an effort to keep DMC open, are now supporting an urgent care model as the best option.