By KATHERINE PETERSEN
Camino Medical Group last week announced a tentative deal with Camino Healthcare and El Camino Hospital District that enables it to reestablish itself as an independent business entity.
The medical group is made up of 150 physicians from Sunnyvale Medical Clinic and Shoreline Medical Group, which have been allied with Camino Healthcare for the past two years.
The agreement paves the way for returning control of El Camino Hospital to the elected El Camino Hospital District board, which had given responsibility for governing the hospital to Camino Healthcare about three years ago.
The transfer of control occurred in 1992, when the hospital faced fierce competition spawned by the managed care revolution sweeping the healthcare industry.
Camino Healthcare's board of directors and the district board have yet to finalize the agreement.
If approved by both boards, the agreement will end pending lawsuits filed by the hospital district against Camino Healthcare, as well as countersuits brought by Camino Healthcare and Camino Medical Group against the district board, according to a press release from Camino Medical Group.
"We are pleased to announce the overall terms of the agreement, and the end of the turmoil that has buffetted El Camino [Hospital] for the past 18 months," said Elizabeth Vilardo, chairwo-man of CMG's Board of Directors. "This agreement enables all parties to get off the complex and costly legal merry-go-round, and enables us to refocus our energies and efforts on the vital business of providing top quality, cost-effective healthcare to our patients."
Key components of the agreement hold that:
*Camino Healthcare will provide CMG with $4 million to $6 million to pay for the medical group to reestablish itself as an independent business entity;
*CMG will arrange for the repurchase of all buildings at fair market value;
*The District board will extend a one-year, $10 million line of credit at a commercial rates to CMG to cover ongoing operational expenses until the new independent business can stand on its own
*CMG will negotiate a new managed care contractual relationship with El Camino Hospital for in-patient services;
*Management and operational responsibilities of El Camino Hospital will return to the hospital district board later this fall.
District board member Mark O'Connor said the proposal looks promising, but the details have yet to be determined.
"This is a skeleton proposal of the deal. It needs to be fleshed out. This is probably the best deal the district will be able to make with these two parties," he added.
This article appeared in the Sunnyvale Sun, August 28, 1996.
©1996 Metro Publishing, Inc. All rights reserved.