By Mike Harris Monday, April 22nd, 2024

Nonprofit Adventist Health, which has donated generously to communities throughout the state, is expected to also do so in San Luis Obispo County, where it recently acquired two hospitals.

Japhet De Oliveira, a spokesman for Roseville-based Adventist, which operates nearly 30 hospitals in California, told the Business Times April 15 that the likely contributions will be determined as part of the organization’s Community Health Needs Assessment.

The acquisitions in February of Sierra Vista Regional Medical Center in San Luis Obispo and Twin Cities Community Hospital in Templeton will benefit area communities, he said in an email.

As a not-for-profit hospital system, Adventist by law conducts its needs assessment every three years, De Oliveira said.

“That will be followed by community health implementation strategies to address the top priority health needs in the communities we serve and to identify resources available to address those needs,” he said.

De Oliveira said that as part of the evaluation, Adventist will work with area community-based groups and public health organizations to ensure it reaches the full community. 

He said Adventist will conduct an assessment for each community it serves in the next year. 

Upon completion of the analysis, an implementation strategy will be co-created outlining how the hospital proposes to address unmet needs over the following three years, De Oliveira said.

In 2022, Adventist provided more than $1 billion across its network in Medicare, Medicaid, subsidized health services, charity care, education and research, and community health improvement, according to its website.

Adventist bought Sierra Vista and Twin Cities for $550 million from for-profit Dallas-based Tenet Healthcare.

The move enabled Adventist to expand into the Central Coast.

The two medical centers, plus related physician practices and imaging centers, formally joined Adventist effective March 29.

Adventist’s entrance into the San Luis Obispo County market could see it competing with fellow nonprofit Dignity Health Central Coast for philanthropic donations.

Dignity Health Central Coast is the largest hospital system in the tri-county region. It includes two San Luis Obispo County hospitals — French Hospital Medical Center in San Luis Obispo and Arroyo Grande Community Hospital.

Healthcare sector veteran Ron Yukelson, who sits on Sierra Vista’s board, said that for the last 20 years, Dignity has had a clear path to all the hospital philanthropy in the area.

Yukelson briefly worked for San Francisco-based Dignity.

“And now with Adventist entering the market, it will be interesting to see how it levels the playing field,” said Yukelson, emphasizing that his remarks are his personal opinions, not as a Sierra Vista board member.

De Oliveira declined to comment on whether Adventist feels it may be competing with Dignity for charitable dollars.

A Dignity spokesperson did not respond to a request for comment.

Since 1991, Dignity has made 3,700 grants totaling $86 million, according to its website.

Yukelson, who previously was chief strategy officer for Tenet Central Coast, said he was surprised Tenet sold Sierra Vista and Twin Cities.

“I would not have guessed that given the success of the two hospitals, that Tenet would be interested in a sale,” said Yukelson, who currently is business development director for San Luis Obispo law firm Carmel and Naccasha.

De Oliveira said that as a nonprofit, Adventist evaluates the availability of property tax exemptions as part of its acquisitions. 

Nonprofits in general aren’t required to pay property taxes.

“For the two recent acquisitions in San Luis Obispo County, we believe if Adventist Health meets the county’s requirements for an exemption, we will apply to the county tax assessor for an exemption,” he said.

In fiscal year 2023-24, Sierra Vista and Twin Cities, still owned by Tenet, paid $1.4 million in property taxes to the county, its cities, special districts, and schools, according to the county’s annual comprehensive financial report.

Jim Hamilton, the county’s auditor-controller-treasurer-tax collector, said that if the two Adventist hospitals are exempted from paying property taxes, it wouldn’t have a significant impact on the county’s budget.

The county’s property tax revenues are projected to increase by $8 million going into the next fiscal year, he said.

“The county’s share of those two hospitals would only be about $360,000,” Hamilton said.

That’s the approximate amount the county received from them in 2023-24.

“Not that I want to minimize it,” Hamilton added. “You know, $360,000 is $360,000.”

Unveiled April 11, the county’s proposed budget for 2024-25 is $852 million.

The county’s cities, special districts and schools would also lose hundreds of thousands of dollars in property tax revenue if the two Adventist hospitals were exempted.

In fiscal year 2023-24, cities and special districts received $208,000 in property tax revenues from the two facilities. Schools received the lion’s share, $854,000.

“For any dollar of property taxes that my office bills for, receives, and distributes, 60% of that goes to schools,” Hamilton said.

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