California Attorney General’s Delay of Verity Hospital Sale Jeopardizes Health Services for Santa Clara County Residents

Potential Closure of O’Connor and Saint Louise Hospitals Could Leave Thousands Unemployed

SANTA CLARA COUNTY, CALIF.--County officials, doctors, residents and hospital staff joined together today to warn the community about the uncertain future of O’Connor and Saint Louise hospitals due to California Attorney General Xavier Becerra’s actions to block the sale. AG Becerra’s motion requesting a stay of the sale order jeopardizes the purchase agreement and threatens the health and welfare of the communities the hospitals serve.

“Attorney General Becerra has rejected all of our good faith efforts to resolve his objections to the County purchasing the hospitals. It is clear the Department of Justice is more concerned about protecting its power than protecting the health of Santa Clara County residents,” said County Executive Jeffrey V. Smith, M.D., J.D. “If O’Connor and Saint Louise hospitals close, communities in the county would lose significant access to critical healthcare. The closure of O’Connor and Saint Louise hospitals will very likely mean that some people will suffer needless delay in obtaining critical healthcare and such delays may imperil lives.”

The Attorney General’s request for a stay, if granted at the January 30, 2019, hearing, will likely cause a breach of the purchase agreement, thus preventing the sale and threatening the deal.

“The Court approved the sale. There are no other bidders and no other options,” said Supervisor Joe Simitian, President of the Santa Clara County Board of Supervisors and Chair of the County’s Health and Hospital Committee. “We are asking the Attorney General to support our residents. Our County depends on the essential medical services provided by O’Connor and Saint Louise hospitals. We need to get this done. We need to get this done now. And we need to work together.”

“I fully support the County’s efforts to purchase O’Connor and Saint Louise hospitals. I have conveyed directly to California Attorney General Xavier Becerra that it is in the best interests of my constituents that these medical facilities continue to serve our local communities’ health care needs,” said Representative Zoe Lofgren.

“This is a lose-lose situation not only for Santa Clara County but for struggling hospitals throughout the state. Communities aren’t going to step-up to invest in hospitals for the public good when they see how this county is now tied up in legal knots for trying to give residents needed hospital beds,” said Supervisor Cindy Chavez.

“We are a public entity trying to expand the services we provide to our community, not a private company trying to make a profit,” said Miguel Màrquez, Chief Operating Officer for the County of Santa Clara. “The conditions the Department of Justice is trying to impose would make sense for the sale of these hospitals to a for-profit buyer, but not for the County.”

“I am doing everything I can to keep these hospitals open,” said Supervisor Mike Wasserman, who represents South County on the Board of Supervisors. “The issue is simple. The County is the only one who offered to buy and maintain the hospitals. If we can’t, they will close and that would be devastating, especially since potentially life-saving local services would be lost to 100,000 South County residents.”

According to Dr. Sara Cody, Health Officer for the County of Santa Clara and Director of the Public Health Department, Saint Louise Hospital is critical to the welfare of southern Santa Clara County and San Benito County, whose populations are predominantly Latino and experience higher rates of serious health problems than the county population at large. The cities of Gilroy and Morgan Hill have higher mortality rates due to cancer, heart disease, stroke, Alzheimer’s, chronic lower respiratory disease and diabetes than the county’s overall population.

“If Saint Louise were to close, residents of southern Santa Clara County would be forced to travel long distances to access basic hospital services and, as a result, their health could be at significant risk,” said Dr. Sara Cody. “If adults and children with urgent or emergency medical needs from those communities had to travel north to San Jose or south to Salinas to obtain care, their lives could be endangered.”

“The County serves as a safety net for so many in our community,” said Supervisor Susan Ellenberg. “Blocking this sale puts at risk our most vulnerable community members who look to us for affordable, convenient healthcare.”

The County of Santa Clara, together with O’Connor and Saint Louise hospitals, shares a mission to provide high quality, compassionate, and accessible healthcare.

“As a public hospital system, we provide care to all people living in Santa Clara County, and this acquisition will support our ability to serve even more residents in our community,” said René Santiago, Director, County of Santa Clara Health System. “This purchase also will assure the continued availability of essential healthcare services in our region.”

The County would be adding the hospitals to its health system, which already includes Santa Clara Valley Medical Center, that provides a wide-range of specialty and other essential services and is known for state-of-the-art care to the uninsured, low-income, and other vulnerable people who might otherwise have no place to turn.

“It is critical for these hospitals to remain open and operating to ensure access to high-quality, local health services, regardless of ability to pay,” said Paul Lorenz, Chief Executive Officer for Santa Clara Valley Medical Center (SCVMC). “The delay will harm the County’s ability to operate these hospitals following acquisition.”

The County has spent more than one thousand hours helping applicants currently employed at Saint Louise and O’Connor hospitals fill out their applications for employment. So far, the County has received over 1,700 applications for employment from workers at these hospitals.

Over the next few weeks, the County will expend significant staff and financial resources to review and process job applications and onboard the physicians to the SCVMC medical staff by the February 28, 2019, deadline. If the Court issues a stay it would halt the County’s hiring process and impact physicians’ ability to admit and care for patients at O’Connor and Saint Louise hospitals.

“For workers, the purchase means having a job. The AG’s decision to block the purchase could leave thousands of healthcare workers unemployed,” said Ben Field, Executive Officer, South Bay AFL-CIO Labor Council. “While the County can’t save the workers from all the hardships brought upon by Verity Health’s bankruptcy, the County is offering thousands of professionals the chance to continue working for two local hospitals in their community.”

If the Attorney General succeeds in killing the deal, over 2,000 hospital workers in Santa Clara County would become unemployed.


County officials and health representatives are encouraging people who live and work in Santa Clara County to contact California Attorney General Xavier Becerra to urge him to save the hospitals, and protect lives and jobs in Santa Clara County:

Contact Attorney General Becerra at:



Use the hashtag: #SaveSCChospitalsAG

Or by calling 1-800-952-5225

Option 1 – English or Option 2 - Spanish

Callers will then be offered 7 options. Option #7 allows callers to leave a message.


On December 27, 2018, the U.S. Bankruptcy Court in Los Angeles approved the County’s bid to acquire O’Connor Hospital in San Jose, St. Louise Regional Hospital in Gilroy, and DePaul Health Center in Morgan Hill for $235 million. The California Attorney General requested that the U.S. Bankruptcy Court stay the sale order approving the purchase of the hospitals by the County. If granted, the stay would block the sale from occurring. 

The U.S. Bankruptcy Court in Los Angeles scheduled a hearing regarding the stay for January 30, 2019.

This link provides access to the documents filed in the federal bankruptcy action:​ 

About the County of Santa Clara, California 

The County of Santa Clara government serves a diverse, multi-cultural population of 1.9 million residents in Santa Clara County, the sixth largest county in California. With a $7 billion budget, more than 70 agencies/departments and 20,000 employees, the County of Santa Clara plans for the needs of a dynamic community, offers quality services, and promotes a healthy, safe and prosperous community for all. The County provides essential services including public health and environmental protection, medical services through Santa Clara Valley Medical Center (SCVMC), child and adult protection services, homelessness prevention and solutions, roads, parks, libraries, emergency response to disasters, protection of minority communities and those under threat, access to a fair criminal justice system, and scores of other services, particularly for those members of our community in the greatest need.

Media ContactLaurel Anderson/Marina Hinestrosa​, Office of Public Affairs, (408) 299-5119.

Posted: January 24, 2019


News Release


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