Stanford Health Care's acquisition of ValleyCare Health System was completed Monday with new signs identifying the new owner now in place, including at the medical center in Pleasanton.
"The transaction with Stanford is now complete," said John Sensiba, chairman of the ValleyCare board. "We closed (Monday) as scheduled and the new signs are uncovered on the Pleasanton campus."
The merger, which puts Stanford Health Care in charge, ends a year-long effort by the governing board of directors of ValleyCare to find a partner as the health system plunged deeper into debt.
The merger agreement, approved by California Attorney General Kamala Harris last month and Monday by Stanford and ValleyCare boards, requires that the Pleasanton-based health system must continue providing medical services here for at least five more years, including its 24-hour emergency medical operation and most other services now available.
The day-to-day operations of the new Stanford Health Care will be led by Scott Gregerson, President, who had previously served as president & CEO of ValleyCare Health System. Gregerson will report to Amir Dan Rubin, president and CEO, Stanford Health Care.
"While our new signage is one of the more visible indicators of the change already underway at the new Stanford Health Care ValleyCare, there is so much more to come," Gregerson said.
He added: "For more than half a century, ValleyCare has ensured that Tri-Valley residents have had access to quality care. This new partnership with Stanford Health Care, which enjoyed the tremendous support of our community, clinicians and staff, will enhance those efforts by bringing truly preeminent care to the Tri-Valley.
"ValleyCare is a great hospital and is now poised to be far better than it has ever been. I would be remiss if I didn't thank the employees and physicians for their unyielding efforts to serve this community during a challenging time and we are awed by the potential this partnership will bring."
"We are looking forward to serving the region with distinction for at least another 50 years and we hope our friends and neighbors will join us at our Medical Center in Pleasanton on June 9 from 4-6 p.m. as we celebrate our new partnership."
As part of the merger agreement, Stanford will provide a capital commitment of $50 million during the first three years and will be co-obligated on, or guarantee, VCHS's $85 million revenue bonds in order to resolve the current bond covenant compliance issues.
Although ValleyCare will remain in existence as a nonprofit, public benefit corporation, it will operate as a subsidiary of Stanford. It's new name is Stanford Health Care, with "ValleyCare" in smaller letter below.
Stanford Health Care will take control of the ValleyCare board of directors by creating a new board that will have 11 directors, consisting of three Class A directors who will be chosen by ValleyCare's current board from among its current members, and eight Class B directors. As vacancies occur, the Class A directors will select replacement directors, whose appointment will be subject to approval by Stanford.
Class B directors will be selected by Stanford from a slate of candidates submitted by a nominating committee appointed by Stanford.
The agreement also gives the Charitable Foundation an oversight responsibility to protect the community's interests by monitoring Stanford's satisfaction of certain commitments under the Affiliation Agreement for a period of five years. The amended governing documents of the Charitable Foundation will give members the opportunity to elect the Charitable Foundation's board of directors from among nominees approved by the new VCHS Board.
For its part, Stanford will provide fundraising expertise and a charitable contribution of $3 million to the foundation. VCHS will continue to provide meeting space necessary for the foundation to carry on its fundraising functions. The sole purpose of the foundation going forward will be to support VCHS and further the charitable purposes it serves.
It's expected that the ValleyCare Medical Foundation, a separate nonprofit corporation that contracts with ValleyCare Physician Associates to provide medical services in the foundation's clinics., will eventually be folded into Stanford's Bay Area physician network.
Stanford leadership also will assist and provide support to ValleyCare and its medical staff in clinical care currently offered at the ValleyCare hospital and medical facilities in Pleasanton and Livermore as well as support the development and operation of a broad geographic network of health care providers and facilities in collaboration with Stanford Health Care and the Stanford University and its School of Medicine.
This effort will further the charitable, scientific and educational purposes of the university as well as develop, sponsor and advance services and programs that address the physical and mental needs of the community at large.
An analysis of ValleyCare's service area, which was reported in the attorney general's letter of approval documents, shows the hospital's market share in in Pleasanton and Livermore at 40%, in the mid-30 percent range in Dublin, and then mostly in the single digit range for patients from other Tri-Valley cities. The exception is a 19.5% market share in unincorporated Sunol.