SAN LEANDRO -- Ownership of beleaguered San Leandro Hospital transfers to Alameda Health System at the end of the month, the latest development in a lengthy fight by local officials to keep the struggling hospital open.

"I'm really excited, because the emergency room and other acute-care services will remain open," said Alameda County Supervisor Wilma Chan, who brokered the deal between Alameda Health System, an independent operator of county health facilities, and Sutter Health, which owns the 93-bed hospital. "We've been working on this for a long, long time."

The community had feared for years that the money-losing hospital would close.

"We're very hopeful the hospital can stay open as a full-service community hospital for the foreseeable future," Chan said.

San Leandro Hospital on May 14, 2013.
San Leandro Hospital on May 14, 2013. (Aric Crabb/Staff file)

Alameda Health System has committed to keeping the emergency room and other acute services open if it receives financial help, Chan said. Sutter Health donated the hospital and its equipment to Alameda Health System, plus a $22 million subsidy, she said.

Alameda County and the city of San Leandro each have pledged subsidies contingent on keeping the emergency room open.

In June, Eden Township Healthcare District board members voted to give the troubled hospital up to $20 million to help keep the doors open. How the district will come up with the money is being negotiated by attorneys for Eden Township Healthcare District and Sutter, said Carole Rogers, president of the district board.

"I'm delighted that the efforts of the district have paid off," Rogers said. "We have, along with our political friends, kept San Leandro Hospital open for the community."

Alameda Health System will keep things as they are at the hospital for the first year and restore some services, Chan said. Meanwhile, architectural plans will be drawn up to convert the vacant fourth floor of the hospital to a rehabilitation center, she said.

The struggle to keep the hospital open has been long and convoluted.

Eden Township Healthcare District bought the hospital in 2004 and leased it to nonprofit Sutter Health, with an option to buy the hospital. In 2009, Sutter exercised its option, with plans to lease it to Alameda Health System, then called Alameda County Medical Center.

Alameda Health System, which runs seven other medical facilities throughout Alameda County, said it would close the emergency room and acute-care services at San Leandro Hospital and convert the building to a rehabilitation center. It proposed moving its rehab center from the seismically unsafe Fairmont campus to San Leandro Hospital.

The planned closure brought an outcry from city leaders, politicians and nurses, who said San Leandro Hospital was essential to meeting the health care needs of the community.

Sutter sued to enforce the right to purchase San Leandro Hospital, and Eden Township Healthcare District countersued Sutter to halt the transfer. In 2012, the state Supreme Court ruled in favor of Sutter, which then took title of the hospital.

In June, an arbitrator ordered Eden Township Healthcare District to pay Sutter $17 million to compensate for losses the nonprofit hospital operator accrued keeping the hospital open while the court case dragged on. The hospital has been losing about $2 million a month for quite some time, said Stacey Wells, a Sutter spokeswoman

In 2012, the San Leandro Medical Center emergency room served 26,478 people and had 3,599 inpatient admissions, she said. In the first half of this year, 54 percent of its patients were on Medicare, 24 percent on Medi-Cal and 3 percent had no insurance.

Chan brought Sutter and Alameda Health System to the negotiating table earlier this year. Those talks produced the agreement that led to the upcoming title transfer.

On Tuesday, nurses at the hospital ratified a contract with Alameda Health System. The new pact continues most of the terms of the nurses' previous agreement with Sutter, with improvements in retiree health coverage and pension benefits, according to a release from the California Nurses Association.

"We have won a tremendous victory. San Leandro Hospital will remain open with all acute care services in place," said Lisa LaFave, a recovery room nurse, in a statement.

San Leandro plans to celebrate the hospital staying open, though a date has not been set, Mayor Stephen Cassidy said.

"We're very excited to see the continuation of emergency medical care at the hospital," he said.