Historic Background
In 1946, community leaders called for a study which recommended that a hospital district be formed for the purpose of building and maintaining an acute care hospital to serve the local residents. Later that year, a majority of voters in these communities agreed to form a hospital district and be assessed a property tax.
In 1947, bonds were sold and construction of Sequoia Hospital was commenced with the dedication occurring on October 10, 1950. The hospital provided a full range of acute care services and grew in increments from its initial 106 beds to 592 with addition of its internationally renowned cardiac and orthopedic programs.
Beginning in the early 1990s the health insurance industry began to change the manner in which they paid for health care services. The advent of managed care and the development of Health Maintenance Organizations (HMOs) began to affect the health care delivery system dramatically. By 1994, the District’s Governing Board began analyzing its options to ensure the continuation of the community’s hospital. Review of a major study concluded that hospitals of the future would be smaller, supported by state-of-the-art technology, seismically constructed, and part of large systems in order to achieve economies of scale.
In 1995, the Board solicited proposals from national healthcare companies to manage or purchase the hospital. Upon completion of a bidding process, the Board recommended to the voters that a transfer of assets agreement with Catholic HealthCare West (CHW) be approved. The agreement provided for CHW to pay the District $30 million dollars in return for transferring the hospital to a non-profit public benefit corporation to be known as Sequoia Health Services. The terms of the agreement included CHW’s right to manage the hospital for a period of thirty years and the district’s right to have 50% of the votes on the hospital governing board, the right to approve changes in key services and the requirement that in the event of a sale, all proceeds must be given to the District.
In 1996, the District voters approved the transfer of assets to SHS with a 96% affirmative vote. On October 1, 1996, the hospital began operating as Sequoia Health Services (SHS) under the management of CHW, which now owns or operates approximately 40 hospitals in three states. District Board members continue to appoint Directors to Sequoia Hospital’s governing board.
