ALAMEDA -- Alameda Hospital may join a network of East Bay medical facilities known as the Alameda Health System, a move that proponents say is necessary for the financially troubled hospital to stay open.
The affiliation, which the leadership of both the hospital and the network have agreed to explore, would clear the way to share resources and would provide the hospital with additional money, including for ongoing maintenance and seismic upgrades.
The Alameda Health System includes San Leandro's Fairmont Hospital and Highland Hospital and the John George Psychiatric Hospital in Oakland.
"This affiliation will ensure Alamedans that the hospital will be here whenever we're needed," said Deborah Stebbins, CEO of Alameda Hospital. "Our patients will be able to continue to see the quality doctors and nurses they've always enjoyed, and our employees will be able to continue working here."
No layoffs or reduction in service is planned if the merger goes forward, Stebbins said.
The boards of both organizations have about 90 days to gather public input and finalize details.
As part of the proposed deal, the board of directors of the Alameda Health Care District -- which oversees Alameda Hospital -- will retain control of all its assets and leases. The network's board, in turn, will take over financial management, quality oversight and other responsibilities from the district.
The parcel tax currently collected from Alameda property owners to support the hospital will remain earmarked for the facility, a requirement by law.
On Monday, the hospital board voted unanimously to pursue a nonbinding letter of intent to explore joining the network. The move followed a June 12 letter from Wright Lassiter, the CEO of the Alameda Health System, that offered possible terms.
"(The network) has reached the conclusion that community hospitals like Alameda Hospital will need to affiliate with larger systems of care in order to obtain efficiencies of scale and the necessary financial strength to weather the transformation that our health care system is currently undergoing and will undergo over the next several years," Lassiter said.
The hospital on Clinton Avenue was "a natural partner" for the network, Lassiter said.
"Both organizations have a long history of providing quality essential health care services to our respective communities," he said.
Alameda Hospital's financial woes, including the loss of $10 million in net revenue after its contract with Kaiser Permanente to perform surgeries expired in April 2010, is forcing the local facility to join a broader network, Stebbins said in a background report.
The hospital "will not be sustainable even in the near term without entering into an affiliation," she said.
The recent opening of the Kate Creedon Center for Advanced Wound Care, the acquisition of the Waters Edge Skilled Nursing Facility and the launch of the Bay Area Bone and Joint Center isn't enough to keep the hospital going, Stebbins said.
The hospital can boost revenue by joining the Alameda Health System because the network needs more beds for patients and space for surgeries, which the hospital can provide, she said.
The move to join the network follows the hospital cutting pay for workers and putting off paying bills, Stebbins said.
"These strategies, while necessary for financial survival, are also not sustainable or fair to our employees and vendors over the long term," she said.
The public can comment about the possible affiliation of Alameda Hospital with the Alameda Health System during meetings set for 6:30 p.m. June 27 at the hospital, 2070 Clinton Ave.; 9:30 a.m. July 23 at Mastick Senior Center, 1155 Santa Clara Ave.; and 6:30 p.m. July 29 at Harbor Bay Isle Community Center, 3195 Mecartney Road.