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Published on 07/14/1997 All articles from this issue

El Camino Hospital negotiates to divest its dialysis centers

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By Clyde Noel / Town Crier Staff Writer

After months of negotiations, El Camino Hospital leaders recently entered into an agreement to sell the Kidney Dialysis Centers to TCG LLC, an affiliate of El Camino Renal Medical Group of Mountain View, and Satellite Dialysis Centers of Redwood City.

The terms of the purchase agreement are still being negotiated, but a recommendation is expected to be brought to the next El Camino Hospital District Board of Directors meeting at 7 p.m., Aug. 13, in the basement of the El Camino Hospital.

When the agreement is approved, El Camino's dialysis business will be transferred to a joint venture of TCG LLC, the hospital's renal medical group and the Satellite Dialysis Center, a not-for-profit dialysis management company for management and operations.

The three dialysis sites included are: the El Camino Hospital site in the Oak Pavilion, the Evergreen Dialysis Center and Rose Garden Dialysis Center, both in San Jose.

The dialysis centers will remain in place in order to maintain the convenience for patients and produce a lease revenue for the El Camino Hospital District. Officials said the physicians and the staff will continue to provide the same service that has always been associated with the dialysis center at the hospital.

"This agreement will be keeping with today's trend in health care for acute care hospitals to divest their dialysis services," said Richard M. Warren, El Camino Hospital chief executive officer. "We are always mindful of the marketplace and are flexible to change direction when needed to benefit the community."

The divestiture of the dialysis centers was started more than a year ago when officials from Camino Healthcare, the former hospital management, wanted to sell the center to balance the hospital budget.

When the hospital returned to public control Jan. 1, the new administration continued the process of divesting the centers and the parties have agreed on a conceptual framework subject to reaching a fully developed purchase agreement.

The letter of intent was signed last week and is subject to an execution of a definite purchase agreement and an acceptable due diligence review.