DAVIES MEDICAL CENTER: To Be Acquired By California Pacific Medical Center
The Castro District's Davies Medical Center, "one of only three remaining independent hospitals in San Francisco," is being bought by California Pacific Medical Center. The San Francisco Business Times reports that Davies, "a nationally renowned AIDS treatment center ... has been searching for a financial savior," having accumulated more than $9 million in losses in the last two years. Meanwhile, California Pacific "posted an estimated $34 million in 1997 net income," which "set the stage for the unexpected merger." The hospitals, which have discussed terms "sporadically" since February 1996, have agreed to merge their systems into a "three-campus medical center that ensures Davies' long-term future and gives overcrowded California Pacific room to expand." Specific terms of the deal, expected to close June 30, are still being discussed.
A Complementary Picture
"CalPacific is bursting at the seams," reports the Business Times, while the 361-bed Davies is staffing less than half of its beds, averages about 75 patients and "has lots of space available." In addition, Davies brings with it "orthopedic rehabilitation, HIV-AIDS and microsurgery programs," while CalPacific can share its load of pediatric and obstetric patients. "The goal is to continue acute-care services (at Davies), to grow some services and hopefully to add some services," said CalPacific CEO Dr. Martin Brotman. Davies reportedly turned down other suitors that wanted to acquire "parts of the hospital, but were unwilling to commit to retaining its status as an acute-care facility" (Rauber, Business Times, 4/6).