What's at stake:
Madera Community Hospital is currently valued at around $39 million. UCSF Health and Adventist Health want to purchase the facility out of bankruptcy.
Just five days before a judge is set to consider a reopening plan for Madera Community Hospital, UC San Francisco and Adventist Health are seeking to enter the fray with a plan of their own.
The two medical institutions will soon propose a plan to purchase the bankrupt Madera hospital and run its operations jointly. The UCSF-Adventist proposal was announced Thursday during a virtual news conference organized by state Sen. Anna Caballero featuring representatives of UCSF Health, Adventist Health and Madera County.
“We want to tell you that UCSF Health and Adventist Health are excited to enter the bidding process to acquire Madera Community Hospital,” said UCSF Health’s president and CEO Suresh Gunasekaran. “We are firmly committed to restoring critical health care services to the Madera community.”
Unlike UCSF Health’s acquisition of two hospitals from health giant Dignity Health — Saint Francis Memorial Hospital and St. Mary’s Medical Center in San Francisco — the potential plan for Madera Hospital would be to run it jointly with Adventist Health.
At the same time, Gunasekaran added that he’d be looking for Adventist Health to take the lead in operations, and that there is a possibility to turn the Madera hospital into a teaching hospital, given its proximity to UCSF’s graduate medical facility in downtown Fresno.
“Adventist Health looked at the circumstances surrounding Madera and realized we just couldn’t do it on our own,” said Adventist Health’s President and CEO Kerry Heinrich. “In the conversations with UCSF, I’ve been so uplifted by the commitment to change the dynamic of health care in the Central Valley.”
Heinrich would not say whether he has been in conversations with creditors in the Madera hospital’s bankruptcy, but said he would welcome the opportunity to talk with them.
The UCSF-Adventist proposal would be at odds with a two-month-old plan that is up for Judge Rene Lastreto’s approval on Feb. 13 in U.S. Bankruptcy Court. That plan would transfer the Madera hospital’s operations to American Advanced Management, Inc. through a management services agreement.
AAMI’s promise, since its efforts to acquire the hospital became public, was that it could wipe away up to $30 million of the hospital’s debt — a favorable proposal for the long list of companies that the Madera hospital owes money to.
AAMI’s executives were not immediately available to respond.
It’s unclear how the creditor’s committee would view a potential deal to purchase the hospital outright. Fresnoland reported earlier that the hospital facility was valued at around $39 million, according to court documents.
Back in November, Adventist Health bowed out of negotiations to take over the Madera hospital, citing how it needed more funding from the state to take it over. At the time, the state offered more than $50 million in loans through its new Distressed Hospital Loan Program.
Neither Gunasekaran or Heinrich shared more details other than their plans to submit a purchase bid imminently.
Additionally, Madera hospital’s bankruptcy lawyer Riley Walter has not heard from either UCSF Health or Adventist Health about a potential purchase bid from them.
“As of right now, I have seen nothing about this from the County or UCSF,” Walter said over email. “All I have are news reports. Until I see something in writing I am not able to comment.”
