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Another Catholic hospital goes for-profit

Special to the National Catholic Reporter

To the dismay of the local bishop and the consternation of the hospital staff, Columbia/HCA Healthcare Corp., the nation’s largest for-profit health care chain, has acquired the Alexian Brothers’ 204-bed hospital in San Jose, Calif.

“The decision of the Alexian Brothers has occasioned shock and deep concern in the diocese of San Jose,” Bishop Pierre DuMaine said in an official statement.

The bishop said neither he nor the Catholic and health care communities of San Jose and Santa Clara had been consulted about the transaction. He said he feared that Columbia would not continue the hospital’s commitment to Catholic values and the poor.

DuMaine’s concerns typify those voiced in the growing national debate over purchases of Catholic hospitals by for-profit corporations. Controversy over the sale of Jesuit St. Louis University Hospital to Tenet Health Care, the second-largest chain after Columbia, has provoked discussion for the past year about the role of Catholic health care and the conflict between pleasing investors and serving the sick and poor.

Alexian Brothers Hospital is the only hospital serving a large low-income, ethnic area on San Jose’s east side. There are no guarantees that it will not be absorbed into other facilities already owned by Columbia, which now has a dominant role in health care delivery in San Jose. The city’s remaining Catholic hospital is O’Connor Hospital, operated by the Daughters of Charity of St. Vincent de Paul.

No decisions have been made about the long-term future of Alexian Brothers Hospital. However, Bill Gilbert, CEO at Columbia’s San Jose Medical Center, has said his facility and Alexian Brothers are expected to consolidate operations. According to Gilbert, the hospital, which is located about two-and-a-half miles from San Jose Medical Center, will not necessarily close. However, he did not rule out the possibility. He added that there would be a fair process should there be a future need to change the way the facilities are staffed.

Alexian Brothers Hospital has 1,200 full- and part-time employees. It has collective bargaining agreements with two nurses’ unions and an engineers’ union, agreements that are guaranteed in the transfer agreement, according to Leslie Kelsay, director of community relations for the Alexian Brothers.

A swap of properties was involved in the transfer of ownership. The hospital’s parent company, Alexian Brothers Health System of Elk Grove Village, Ill., will take over two of Columbia’s facilities, Hoffman Estate Medical Center and Woodland Hospital, in suburban Chicago. Alexian Brothers will also pay Columbia an undisclosed amount of cash.

Roberta Ward, director of media relations for the San Jose diocese, told NCR that California state law mandates that when a for-profit health company buys a nonprofit organization, a portion of the funds must go into the public health care trust fund, the amount being based on the benefits enjoyed by the nonprofit during its life.

When Columbia acquired the Good Samaritan Hospital in San Jose two or three years ago, an $87 million charge for the health trust fund was established. However, as the acquisition of the 33-year-old Alexian Brothers Hospital is in the form of a swap, Ward says, it is unclear what Columbia will be expected to pay.

Kelsay said the Alexian Brothers maintain that because Columbia is a Texas corporation, the transaction does not come under the provisions of the state law. The brothers, however, “as a demonstration of concern for the continuance of the mission and values here,” will make a gift, the amount of which has not been determined.

Whether Alexian Brothers Hospital will continue to treat large numbers of poor people or provide other religion-inspired services is the question being asked by many of the hospital staff and the large body of volunteers.

“Betrayal is how they describe the situation, even though they are frightened to express their outrage publicly,” said Br. Jim Johnson, one of three brothers who work at the hospital.

Johnson said that staff and volunteers, many of whom are Vietnamese and Filipino, “are shocked at the expected disappearance of all Catholic symbols from the hospital. They wonder if there will still be a daily Mass for patients and staff. Will nurses be expected to participate in abortions, which they regard as murder?”

Another question is the fate of the chaplaincy, now staffed by two priests, two nuns and several lay people, Johnson said. “They know what happened at the Good Samaritan when Columbia took it over,” he said. “It had a full-time [chaplaincy] staff of seven headed by a Lutheran pastor and a Catholic priest. The first Columbia budget provided for one part-time chaplain working 20 hours a week.”

Similar concerns were voiced to NCR by Ward. The community interest in the hospital is strong, she said. “Many of the volunteers do what they are doing because they believe in the brothers’ mission. They had very innovative programs. It is all very tragic.”

National Catholic Reporter, September 18, 1998