Saint Agnes owner Trinity Health calls off purchase of ‘distressed’ Madera hospital

Trinity Health, the operator of Saint Agnes Medical Center in Fresno, said it cannot move forward with acquiring the “financially distressed” Madera Community Hospital due to additional conditions imposed by California Attorney General Rob Bonta.

Bonta last week announced he had approved the sale of the Madera hospital to Trinity Health. At the time, Saint Agnes officials told The Bee they were reviewing Bonta’s report and would comment after they finished going through the details.

“Trinity Health, Saint Agnes and Madera entered into this process with every intention of reaching a positive outcome. Unfortunately, given the complex circumstances and the additional conditions imposed by the AG — outlined in the final report issued last Thursday — it became clear we could not move forward,” Nancy Hollingsworth, president and chief executive officer for Saint Agnes, said in a news release provided Thursday to The Bee. “Therefore, the difficult decision was made to terminate the agreement so Madera could begin making plans for its next steps.”

It wasn’t immediately clear what additional conditions prevented Saint Agnes from moving forward with the purchase. It was also not immediately clear what this would mean for the Madera hospital.

The California Attorney General’s Office and Rep. Jim Costa, D0-Fresno, on Thursday called Trinity Health’s decision to not move forward with the purchase of the Madera hospital disappointing.

“It is disappointing that Trinity Healthcare has chosen to leave residents in need by walking away from this deal, which took more than a year to craft, without any effort to engage,” the Attorney General’s Office said to The Bee in a statement. “We are actively working with Madera Community Hospital to explore every option to help keep the hospital open for residents.”

Bonta’s office said under terms of last week’s conditional sale, Bonta had a list of requirements that included Trinity Health to maintain services in good faith, such as the hospital, the emergency room, and the rural clinics, for five years. That would ensure services wouldn’t be “cut off on a whim.”

It also required Trinity Health to accept price caps to ensure continued affordable care for Madera residents, but allowing necessary price increases as part of the turnaround of the hospital; ensuring continued certification of the hospital as a Medi-Cal and Medicare facility; providing charity care, financial assistance to patients, as well as, community benefits; complying with nondiscrimination rules in healthcare services; and providing emergency reproductive healthcare services, and notice to the public about nonemergency reproductive healthcare not provided, as well as information for alternative license providers and transportation.

“These conditions were set to protect the communities in Madera and Madera County and their access to affordable healthcare,” Bonta’s office said. “Many of them are from lower-income communities who rely on Medicare, Medi-Cal, charity care, and the financial assistance that we placed as conditions, and who rely on the essential services provided by the hospital and the rural clinics.”

Bonta’s office said those “minimal conditions were necessary because without them, the communities could not be assured of even basic essential services, as they could be shut down at any time.”

“Any deal without those conditions would make the hospital one that would not serve or help the people,” Bonta’s office said. “In addition, the conditions allowed for the flexibility necessary for any turnaround plan.”

Costa issued a statement on Thursday after The Bee reported Trinity Health had called off the purchase of the Madera hospital.

“It disappoints me greatly that Trinity Health decided to walk away from its affiliation agreement with Madera Community Hospital,” Costa said in the statement. “For more than 18 months we have worked with Madera Hospital and its Board of Directors, the California Attorney General, and state and local leaders to help maintain access to Madera Hospital and the full services that only this acute hospital provides in Madera County.”

Costa said he believed Bonta’s conditions were reasonable, but unfortunately, they didn’t meet the needs of Trinity Health.

“I am hopeful that we can find another solution — another partner — who can come in and continue the necessary medical coverage the citizens of Madera County deserve,” Costa said. “The people of Madera County should not have to travel more than 30 minutes for healthcare. We must find a way to help.”

Affiliation talks began in February

In February, Saint Agnes confirmed it was exploring a potential affiliation with the Madera hospital. Saint Agnes is a member of Trinity Health, a not-for-profit Catholic health system that operates 92 hospitals in 22 states. Saint Agnes’ footprint in the Fresno region includes the main hospital and 21 primary, specialty and urgent care clinics, as well joint ventures with Fresno Surgical Hospital, Summit Surgery and Renaissance Surgery Center.

Madera Community Hospital is a general acute care, private, not-for-profit hospital with 106 inpatient beds. The hospital has expanded since its opening in 1971 and offers a wide range of health care services, according to its website.

The Madera hospital, Hollingsworth said, is facing financial and operational challenges from the pandemic like other hospitals in the country. Both entities began the process for a permanent affiliation, given their “shared goal to ensure continued availability of essential services to Madera residents,” she said.

Both entities did a full due diligence, and the process culminated last week with Bonta’s approval.

“Although we are deeply disappointed that the affiliation could not be completed, it was not without significant effort from both parties,” Hollingsworth said.

The Madera hospital provides vital medical services to more than 150,000 residents in the city and surrounding communities.

“When it comes to accessing emergency healthcare, every minute counts,” Bonta said in last week’s announcement. “Having a hospital in the neighborhood can make the difference between life and death for a patient. Maintaining access to critical healthcare for our communities is always our top priority.”

Trinity had committed to making certain investments under the terms of the sale. Those investments, according to the announcement, included $45 million for a new medical records system and seismic upgrades to the hospital facilities.

Trinity had also committed to spending $3 million per year on needed hospital investments, such as equipment upgrades.