ALAMEDA -- Alameda Hospital could begin providing outpatient surgeries for individuals connected with Alameda Health System as early as next month now that the hospital's affiliation with the network of East Bay medical facilities has been approved.

The leadership of the network backed the affiliation Tuesday, a move that followed trustees with the Alameda Health Care District, which oversees the hospital, voting to join the network on Nov. 21. The affiliation clears the way for the network and hospital to share resources, and it is expected to provide the hospital with additional money, including for ongoing maintenance and seismic upgrades.

No layoffs or reduction in service is planned as the merger goes forward, according to hospital officials.

Alameda Health System, which took ownership of San Leandro Hospital on Oct. 31, also includes the Fairmont Hospital, Highland Hospital and the John George Psychiatric Hospital. The process of transferring Alameda Hospital's license to the network is estimated to take at least 90 days.

"This affiliation will ensure that Alameda Hospital will remain an acute care hospital with an emergency room now and into the future," said Deborah Stebbins, the hospital's CEO. "We have worked diligently to create an affiliation that meets the needs of our patients and our community. We're looking forward to making a transition that results in improved access and quality of care for residents in Alameda and our neighboring communities."


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The hospital's financial troubles, including the loss of $10 million in net revenue after its contract with Kaiser Permanente to perform surgeries expired in April 2010, prompted the need for the facility to join a broader network, Stebbins said in a background report for district trustees.

The hospital on Clinton Avenue "would not be sustainable even in the near term without entering into an affiliation," she said.

The opening of the Kate Creedon Center for Advanced Wound Care in July 2012, the acquisition of the Waters Edge Skilled Nursing Facility and the launch of the Bay Area Bone and Joint Center have not generated enough revenue to maintain the hospital, according to hospital officials.

The facility 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.

The deal worked out with the network calls for it to provide funding for facility improvement, new technology and state-mandated seismic upgrades. The Alameda Health Care District will retain ownership of the property and leases connected with the hospital under the agreement, while the network will assume responsibility for day-to-day management.

The $298 parcel tax currently collected annually from Alameda property owners since 2002 to support the hospital will remain earmarked for the facility, a requirement by law.

"This marks another significant milestone in Alameda Health System's vision for expanded access to quality, affordable care throughout the East Bay," said Wright Lassiter III, the network's CEO. "Alameda Hospital will continue to support the health care needs of the community through its provision of quality care by world-class providers who are close to home."

As part of the deal, Alameda Hospital employees will remain district employees for an initial transition period of at least one to two years, with no change to seniority, work location, benefit or pension plans, according to district officials. "Floating" of staff between facilities is not anticipated, and the medical staff at the hospital will be kept separate from those at the network.

While outpatient surgical services for network patients could start starting as early as next month, services for inpatients could begin in January.

Contact Peter Hegarty at 510-748-1654. Follow him at Twitter.com/Peter_Hegarty.

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