Dignity Health to pay $19M to California hospital over ownership transfer dispute

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Dignity Health, now part of Chicago-based CommonSpirit Health, will pay $19 million to Sequoia Healthcare District to settle a dispute over the ownership transfer of Redwood City, Calif.-based Sequoia Hospital, The Daily Journal reported Nov. 19. 

The settlement will be combined with $3.4 million from an unrelated audit issue and paid out in increments over 20 years, according to the report. 

Under the settlement, half of the funds will be used to implement "innovative and impactful" programs in the hospital district, and the other half will be spent with Dignity Health on other projects in the district. 

The Sequoia Healthcare District funded the construction of Sequoia Hospital in 1950. After consecutive operating losses, the district decided to merge the hospital with Dignity Health. In 2007, Dignity Health took full ownership of the hospital and helped pay to rebuild the hospital to meet seismic regulations. The district also helped fund the project in return for sharing profits for 40 years. 

"Reaching this mutually-beneficial agreement with Dignity Health will greatly benefit the communities we serve," Pamela Kurtzman, Sequoia Healthcare District's CEO, said in a statement. "Every dollar of this settlement will be dedicated to further supporting the health and well-being of the district’s more than 230,000 residents."

"Despite changes throughout the years — including changes in ownership — both Sequoia Hospital and the Sequoia Healthcare District have never wavered in their firm commitment to provide health and wellness," Sequoia Hospital President Bill Graham said, according to the report.

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