Los Gatos facility closes, will re-open as El Camino extension in July.

The Community Hospital of Los Gatos has seen her last day.

El Camino Hospital’s $45 million acquisition of the struggling facility closed escrow April 11, earlier than planned. The hospital’s longtime operator, Tenet Healthcare, ceased operations at 1 a.m. on April 10.

The closing ran smoothly, with the last patients being transferred to other facilities on April 6. The emergency room remained open until the final moments.

Though the facility is slated to re-open in mid-July and will operate as a sister site of El Camino Hospital in Mountain View, Vaughn is one of an estimated 450 Community Hospital employees who lost their jobs in the shuffle. All employees — even ones hoping to continue work at the facility under El Camino — had to reapply to the El Camino Hospital system as new employees.

El Camino has begun hiring many positions, posted 93 new job openings and expects to post still more jobs in the next few weeks. To date, the hospital has already received over 200 physician applications, many from Community Hospital doctors.

When the hospital reopens, Eric Pifer, M.D., a Monte Sereno resident, will act as the new president. Pifer previously served as chief medical officer for El Camino Hospital.

“The hospital will reopen as El Camino Hospital Los Gatos,” Pifer said. “El Camino Hospital hopes the name makes it clear that the Los Gatos campus is a sister site to El Camino Hospital in Mountain View, yet retains its importance as part of the Los Gatos community.”

El Camino staff will run the Los Gatos hospital upon its reopening. The facility will offer basic services including an emergency department and operating rooms. Orthopedic, spine, heart and vascular care, cancer and urology departments will also be on site at the Los Gatos facility.

“This is an end of the era when El Camino Hospital is just one campus,” hospital CEO Ken Graham told the board of directors during its April 8 meeting.

But the dawn of the El Camino empire came with a hefty price tag.

Though the property purchase rang in at $45 million, cost estimates of the acquisition have since skyrocketed past the $100 million mark, hospital officials say, including $22 million in seismic retrofitting work required by the state and millions more for legal and consulting fees, equipment, pre-opening costs and capital costs over the next five years.

Buying the hospital allows El Camino to meet its strategic goals by moving southward, Graham said. Taxpayer funds will not be used for the new purchase, nor will the Los Gatos project impact the opening of the new El Camino Hospital in Mountain View, scheduled for Nov. 15, said El Camino Chairman Dave Reeder.

But according to a report in the Mountain View Voice, El Camino will see a return on its investment almost immediately. The hospital’s financial model shows a $1 million net income in the first year of ownership of the Los Gatos facility, with $9 million in earnings the second year and $10 to $11 million in each of the following three years of operations.

Achieving those numbers will require an average of 42 patients per day in the first six months and 39 patients per day for the rest of the year, said Pifer.

The 42-patients-per-day model is a realistic goal, considering Los Gatos will re-open with 113 beds. The hospital also has a 30-bed rehabilitation center, and officials are weighing the possibility of opening it soon – perhaps even before the hospital’s reopening in July.

Under Tenet, business at the facility had slipped into the red in recent years, but Pifer said the hospital averaged more than 60 patients per day several years ago.

The plan “is primarily based on getting back to numbers the hospital has had over the last several years,” he said.

In order to accomplish this, the hospital absolutely must re-open this summer and must do so with a focus on maintaining and growing physicians’ relationships in Los Gatos, Pifer said.

Meanwhile, former Community Hospital CEO Gary Honts praised his staff as he bid farewell to the hospital.

“It’s been up and down with emotions all over the board,” Honts said. “But the staff has been exceptional and very professional through the whole process. It’s sad to go through this, but there’s optimism because El Camino has started hiring and they know the hospital is re-opening.”

Any requests for patient records, lab test results or x-rays should be directed to (925) 275-6027.

By Rebekah Stone

Rebekah Stone is the editor of the Healthcare Journal.