Credit: Google Street View
Verity Health System is gearing up to potentially sell some, if not all, of its six hospitals as it works to address financial problems that have plagued the company for some time, the company said this week.
The health system, based in Redwood City, California, has gone through its share of ownership changes, and at one point was attached to the controversial Patrick Soon-Shiong, MD, whose company NantWorks acquired a majority stake last year in Integrity Healthcare, the company that manages the nonprofit Verity.
Verity Health employs more than 6,000 staff statewide. Their hospitals include 1,650 inpatient beds, six active emergency rooms, a trauma center and medical specialties including tertiary and quaternary care.
The system's Southern California hospitals include St. Francis Medical Center in Lynwood and St. Vincent Medical Center in Los Angeles. Their Northern California facilities are O'Connor Hospital in San Jose, St. Louise Regional Hospital in Gilroy, Seton Medical Center in Daly City and Seton Coastside in Moss Beach, Verity said in a statement.
Verity said its board has not yet made any financial decisions related to strategic options, though the company is considering a range of options.
"Pursuant to Verity's strategic plan, we are exploring a number of options to deleverage our balance sheet and address challenges our hospitals face after a decade of deferred maintenance, poor payor contracts, and increasing costs," said Verity CEO Rich Adcock ina statement. "As the board and management team work together to evaluate these options, the interests of our patients, employees and communities remain paramount."
As recently as November, Soon-Shiong was scrutinized for allegedly boosting sales by citing positive experiences from three doctors who are on the payroll of one of the many companies in the biotech mogul's network. A Politico report at the time found that sales of Soon-Shiong's flagship product, the GPS Cancer genetic test, were being bolstered by purchases made from hospitals and clinics with doctors were financially tied to his mass network.
In fact, the report found that of the 1,286 tests sold in 2016, more than 100 were made by organizations linked to three doctors who had at one point been on the payroll of the biotech mogul's companies.
Soon-Shiong has even drawn celebrity ire. In January, singer Cher filed an amended lawsuit against Soon-Shiong in an update to her claim filed against the biotech mogul in October 2017. The new suit amended the initial complaint, which claimed Soon-Shiong allegedly duped Cher into selling her shares of Altor Biosciences, a promising drug company, at a fraction of their value. According to the suit, Altor's management hid valuable HIV and cancer research from shareholders.
As a result, Soon-Shiong bought shares of the company from Cher and other stakeholders at a significantly lower price without sharing the company's true value to shareholders. Two D.C. attorneys and former Altor shareholders, Adam Waldman and C. Boyden Gray, filed a similar lawsuit in June 2017.