Daly City community is split over Seton hospital sale

DALY CITY, California — As the first Asian to become chief of medical staff at Seton Medical Center, Dr. Herminigildo Valle faces an extraordinary challenge.The largest employer in Daly City, Seton, is being handed over by the Daughters of Charity Health System (DCHS) to Ontario, California-based Prime Healthcare Services in an acquisition that is polarizing the community.

Filipinos comprise 60 percent of Seton’s employees, many of whom are members of the Service Employees International Union – United Healthcare Workers West (SEIU-UHW), which is staunchly opposed to the takeover by Prime Healthcare and has asked Attorney General Kamala Harris to veto the deal.

Valle believes such a veto would have dire consequences.

“If the sale doesn’t go through, these hospitals will close. It’s a loss for everybody. The union says, ‘We have the political influence.’ But that’s not what we need. We need somebody who knows the business, has the money to be able to do it and to continue doing what we’re doing. It may not look perfect in terms of a transaction, but it’s the only way to move this hospital forward,” he told Manila Mail in an interview at his clinic in Seton.

DCHS owns five other facilities in California, namely Seton Coastside in Moss Beach, O’Connor Hospital in San Jose, Saint Louise Regional Hospital in Gilroy, St. Vincent Medical Center in Los Angeles and St. Francis Medical Center in Lynwood.

As chief of the medical staff, Valle is responsible for the continuous delivery of high-quality services at Seton. He has been involved in the bidding process that DCHS began in February last year amid losses running into $10 to $14 million a month since 2013.

About 70 potential buyers were considered during the bidding, from which Prime Healthcare emerged as the only choice late last year.

According to Valle, SEIU alleged that Prime Healthcare has “some business practices that are not fair,” which led it to support the bid of Blue Wolf Capital Partners, a Wall Street investment firm.

“I met with this buyer [along] with four other doctors, together with Dave Regan who’s the president of the SEIU Western Region,” Valle said.

“They presented their facts on this alternative. We looked at it, but the offer is not viable. They’re not going to be able to run the hospital because what they offer is a management service. It’s not taking over the hospital. They don’t have the capital. They don’t have the experience. It’s an investment company, while Prime is a healthcare company that has 29 hospitals. They are multi-awarded in quality care and most importantly they’ve turned around distressed hospitals.”

Battle of heavyweights

Operating 15 acute care hospitals in California alone, Prime Healthcare specializes in saving hospitals from bankruptcy. It is the largest for-profit operator of hospitals in the state. Its network includes six charity hospitals and two indigent community clinics managed by Prime Healthcare Foundation. It is also present in Pennsylvania, Indiana, Kansas, Michigan, Nevada, New Jersey, Rhode Island and Texas.

But in acquiring DCHS, Prime Healthcare is pitted against the largest healthcare union in California, which boasts a membership of 150,000 workers across three of Prime Healthcare’s hospitals, four DCHS facilities, five Sutter hospitals and at Kaiser Permanente, the state’s largest health system.

One of the largest healthcare unions nationwide, SEIU-UHW has drawn widespread support in its campaign against Prime Healthcare. Its supporters include State Controller John Chiang, 18 members of the California congressional delegation, 61 current and former state legislators, a majority of the county supervisors in LA and Santa Clara, Kaiser Permanente, San Francisco Mayor Ed Lee, and numerous community organizations

The major concern is that the takeover would undermine access to healthcare for low-income people and lead to significant layoffs among health workers, according to SEIU-UHW.

In its labor complaint filed earlier this month, SEIU-UHW accused DCHS of coercing its employees into accepting the sale by threatening bankruptcy and the closure of its hospitals.

As far as Valle is concerned, the risk is very real. “If the sale is not going to happen, patients will die because wala nang hospital dito [there is no nearby hospital]. Next one is San Mateo, which is a very small community hospital. Seton Coastside is the only emergency room within the 50-mile stretch from Half Moon Bay to Santa Cruz, so it’s really catastrophic if we close.”

Divided

Debir Arzadon, executive board member at SEIU-UHW’s nursing home division and employee of a skilled nursing facility near Seton, warned that Prime Healthcare has a bad reputation.

“Prime Healthcare threatens the Medi-Cal and safety net hospitals in the Bay Area. Union members at Prime Healthcare have gone over four years without wage increase. It is the future risk in the Bay Area for violating labor workers and for unfair labor practices under the National Labor Relation Act. Therefore, I strongly oppose the sale to Prime Healthcare,” she said.

But clinical lab technician Allan Tubig, who works at Seton and is also an SEIU-UHW member, has a different view.

“My take on this as an employee is I am in favor of the hospital because Prime Healthcare promises to fund our retirement and keep the hospital services open. For the community, it will keep the hospital open,” he said.

Valle noted that Prime Healthcare is committed to this. “No one is going to lose their job. That is part of the commitment of Prime Healthcare. At least for the next five years, all services will be open. They will spend $150 million in capital expense. They will build a new tower here. You know they can do it ‘cause they have the money, they have the capital. They have the experience and they have the capability of doing it.”

He also pointed out that some union members have supported the change.org petition urging the attorney general to approve the sale.

“It’s not like you can’t do anything. This is an opportune time for people to stand up and be heard. You have to participate actively in the community as the only way to predict the future is to create it yourself,” Valle said.

The change.org petition has garnered close to 30,000 supporters as of press time.

SIDEBAR:  Home beckons to Seton’s first Asian chief of staff

He made history as the first Asian to become chief of medical staff at the Seton Medical Center, the largest employer of Daly City, Calif. – home of the largest concentration of Filipinos in the United States. Because of that feat, you might think Dr. Herminigildo Valle would remain in this county for as long as he lives. Not really. The Davao-born cardiovascular doctor has his eyes set on retirement back in his native Mindanao.

“I would really like to establish a healthcare institution in the Philippines,” he told Manila Mail. “I already have a piece of property there. I’m just trying to get funding from a hospital that is connected here.”

Valle graduated from Far Eastern University in 1986, a tumultuous year in Philippine history. This was also a turning point for his family, which moved to the U.S. But before coming to America, he first took the board exams and passed it with flying colors.

“This was really our parents’ dream, for all of us to finish education and work in the States,” recalled Valle.

His first job was in New York’s Mount Sinai Hospital. But since his family is in California, he moved after working there for four years. Plus, “I want to self-actualize all my potentials.”

In 1992, he accepted a job offer from Seton.

“I came back in 1992 right after my specialty training at Cleveland Clinic. I did internal medicine and surgery training. I specialize in vascular diseases especially those with diabetes and problems in circulation.”

Valle has been working at Seton for the last 23 years and in July last year, he became medical chief of staff not by appointment, but election among the physicians.

“I was nominated and the medical staff elected me to be their chief,” he said.

Seton has 450 resident doctors, all of them now under Valle’s leadership.

“It’s a once-in-a-lifetime opportunity to be able to participate in a meaningful manner in the activities of the patients, nurses and professionals – and the whole community in general.”

Valle has a term of two years. As chief of staff, he directs Seton’s educational programs and chairs board meetings of the medical executive committee, the highest medical staff committee in the hospital.

“I develop a vision for the hospital in terms of healthcare changes, reimbursements, loss of access and Obamacare,” he said. “These become very expensive if we don’t take care of it. We have to come up with a good information system and advance in technology, knowledge and practice.”

At the core of his vision is a “culture of safety” that could restore what many consider a fragmented healthcare system in the U.S.

“We’re here to take care of patients, sometimes we forget that. Patients can be harmed by our inattention or carelessness. Sometimes it’s not totally our fault because the healthcare system is just so complicated, and you don’t know everything. The information is sometimes not available to you and it’s very expensive. So I hope to develop a culture of providing safe care that is effective and based on science; efficient, meaning you’re not wasting resources; patient-centric, recognizing the culture of the patient; and then equitable – [whether the patient is] young, old, male, female, rich or poor, you treat them equally. Those are the five aims that I look forward to, the basis of whatever I do. Safe, effective, efficient, patient-centric and equitable – that everybody is treated fairly with or without insurance.”

Valle is a former president of the Philippine Medical Society in Northern California. He will serve as the organization’s president again in 2016.

During his term in 2008, he led the largest medical mission to the Philippines with 230 volunteers traveling to Davao to perform heart surgery, neurosurgery, and a lot of cleft lip orthopedic procedures.

The organization will hold its medical mission in Bohol this month, while Tarlac is lined up for next year. About 150 doctors have volunteered from nine counties for this year’s trip.

Valle said this is a community service of doctors who have roots in the Philippines.

“When we go to missions, we usually take over a hospital. This is all voluntary. We pay for our own airfare and hotel accommodations. Our hosts provide us dinner. This is a great effort and I hope it continues for a long time.”

The FilAm doctor specializes in treating circulation problems. Working in the Wound Care Center, he said he sees patients with “wounds that don’t heal because of poor circulation, blood clots in the lungs or pressure ulcers”.

What does he think about the healthcare lifestyle of Filipinos?

“It depends on which generation. For first-gen Filipinos where they come from the Philippines, they have a different mindset. There is a high smoking rate and a high number of patients not getting regular healthcare. I don’t think as a community, we are maximizing or optimizing the benefits of an aggressive healthcare. You’re here, it’s a land of opportunity. But then what happens when we get sick? You’re here because you want to help people in the Philippines. So you have to be in good health and be productive, and the only way to do that is to have a very healthy lifestyle.

“So going back to my thinking, you self-actualize. Your potential as a productive member of society, you can only [reach] that if you are physically, spiritually, philosophically and psychologically stable or adequate. You don’t have to be super, just [have] the basic requirements of being productive in this community.” –ELTON LUGAY