Valley Health execs OK vote to sell hospitals

The Press-Enterprise Board members of Riverside County’s largest hospital district on Wednesday night approved holding a Nov. 6 election that could result in the sale of practically all assets, including hospitals in Hemet, Sun City and Moreno Valley.

About 200 people attended a public meeting in Hemet on Wednesday night to express both support and derision for the plan to sell to Select HealthCare Solutions.

The Del Mar-based hospital-development group wants to buy the district’s assets, including Hemet Valley Medical Center, Menifee Valley Medical Center and Moreno Valley Community Hospital.

Glen Newman, a Hemet resident, described the deal as a “giveaway.”

“This contract is so prone to favor the buyer that it stinks,” he said.

For the sale to be finalized, it has to be approved by a simple majority of district patrons.

Among the provisions of the sale agreement:

The purchase price is set at $135 million and includes substantially all the district’s assets, including the three hospitals; Hemet Valley HealthCare Center, a skilled nursing facility; and the Medical Arts office building in Hemet.

Select would make a deposit of $14 million, which would be used for operating capital and to meet obligations. Of that amount, $9 million would be nonrefundable if Select did not complete the transaction, including if voters reject the sale.

If voters do not approve the sale, Select will buy Moreno Valley Community Hospital for $47 million, with the $14 million deposit credited toward the purchase price. If Select fails to close the purchase on that hospital, Valley Health will retain the entire $14 million deposit.

Valley Health System would no longer continue to exist as a local health care district, which would not provide community health services similar to those provided by other districts that operate hospitals.

Dr. Kali P. Chaudhuri, chairman of the current hospital-management company, and his affiliates would  be allowed to have a role in the new management for at least five years, and they would be having voting control over the new hospital operations for at least five years.

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