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San Joaquin hospital planning clinic move to VA building amid capacity squeeze and contract talks
Summary
CEO Castro said specialty clinics will move to a VA clinic site after flooring delays; hospital is operating above licensed adult bed capacity leading to hallway placements; county and CommonSpirit are negotiating management services agreement changes and oversight options ahead of a March 2025 Board briefing.
CEO Castro updated the committee on the specialty clinics move and broader hospital capacity issues, saying the clinics’ move has been delayed by flooring work and now is expected between January and March. Most surgical specialty clinics — orthopedics, general surgery and gastroenterology outpatient services — are slated to relocate to the former VA clinic building, and the county plans a procedural room there for certain outpatient procedures.
Castro said the hospital’s licensed bed count sits at 152, which includes about 25 NICU and 25 MGU/prison beds; that leaves roughly 120 adult beds. Over the last month, Castro said the hospital’s average daily census ranged from about 181 up to 194, requiring use of overflow spaces such as the towers, hallways and waiting rooms. The towers plan to house lower-acuity patients, but a waiver request for tower use was denied, forcing the hospital to find additional patient space.
Castro described long-term retrofit and expansion challenges. He said one single-level building (the cafeteria) will require replacement rather than retrofit and estimated that replacement cost at about $30 million; by contrast, retrofitting a three-story building such as the referenced Damron property could be “anything less than $100 million” — he described that as speculative. Castro estimated a full expansion could total about $150 million.
On management and governance, the county administrator’s office reported the current management services agreement (MSA) expires June 30, 2025, and recommended an extension in the current phase with no structural changes. County staff and CommonSpirit are discussing requested flexibility to operate the hospital more like a private hospital (procurement, contracting and personnel rules), and the creation of an oversight board for credentialing, licensing and quality metrics. The county plans a target presentation to the Board of Supervisors in March 2025 on the MSA options.
Other operational notes: a clinic call center will move into tower space vacated by the clinics (the space the VA previously wanted), Federally Qualified Health Center (FQHC) partners may expand into vacated clinic space, and county leaders noted ongoing capacity pressures will be a multi‑year issue requiring capital planning.
