Health care giant Providence is in exclusive talks to transfer ownership of Napa County’s largest hospital, Queen of the Valley Medical Center and related assets, to Solano County-based nonprofit NorthBay Health.
Garry Olney, chief executive of Providence Northern California, announced the planned transaction Thursday in a memo to staff. Neither he nor a Providence spokesperson specified if the prospective deal would involve a sale or some other form of transfer.
“We have entered into a Letter of Intent, which is the first step in this process,” Olney wrote. “Pending a definitive agreement and regulatory approval, we anticipate this transition will occur by the end of 2026.”
Queen of the Valley Medical Center in Napa is a general acute care hospital licensed for 198-beds. It has total net inpatient revenues $138 million and $204 million in net outpatient revenue, according to the latest data from the California Department of Health Care Access Information. After factoring in operating expenses, the hospital recorded a $5 million loss in 2023-24.
About 1,000 caregivers and staff work at the hospital.
The turnover comes at a difficult time for operators of hospitals nationwide as Medicaid reimbursement cuts enacted last year in President Donald Trump’s tax and spending bill, along with other business trends, have pushed many facilities to the brink.
“Health care is evolving rapidly across the country, and moments like this call for long-term vision and commitment,” said NorthBay Health President and CEO Mark Behl. “Our goal is to help ensure that health care in Napa continues to grow stronger — expanding access to high-quality services, advancing innovation, and building a system that will serve this community for generations to come.”
NorthBay Health, in business for 67 years, operates hospitals in Fairfield and Vacaville.
For Providence, the move follows a recent series of cuts, including elimination of its labor and delivery unit at Petaluma Valley Hospital and the planned closure this month of its inpatient pediatric unit at Santa Rosa Memorial Hospital.
Providence said there “are no active discussions” involving the transfer or sale of any of its other Northern California hospitals. In addition to Queen of the Valley, Petaluma Valley and Santa Rosa Memorial, Providence also operates Healdsburg Hospital. It operates more than 50 hospitals across seven western states.
With Queen of the Valley, Olney said Providence’s move followed a “months-long, thoughtful process” of deliberation. A spokesperson said discussions, while exclusive, are in the still in the early stages.
“We recognize this announcement may raise questions and emotions, and as we get closer to a definitive agreement, we will have resources available to help our caregivers absorb and process the news,” Olney wrote.
In its press statement, Providence provided little information beyond what Olney said in Thursday’s announcement.
“NorthBay Health is a California-owned, locally governed and community-based health system, and we are confident it is the right organization to shepherd The Queen into its next chapter,” Providence said.
“Our focus right now is uninterrupted patient care and supporting our caregivers and the community through this potential transition,” the Providence statement said.
A large share of the medical center’s staff, about 432 employees, are represented by the National Union of HealthCare Workers. They include medical technicians, respiratory therapists, nursing assistants and housekeepers.
Vanessa Coe, NUHW secretary-treasurer, highlighted the key role the medical center plays is Napa County.
“Queen of the Valley is a seminal institution in Napa with dedicated caregivers that have served their community for generations,” Coe said in an email. “We look forward to getting to know NorthBay Health, and expect it to be a good steward of the hospital that invests in local care and the workers who provide it.”
Olney, in his announcement, said the transition still requires “many steps” and that “nothing changes today.”
“We will create opportunities, including town hall conversations, for you to hear more about the potential transition and what it means for you as we move into a definitive agreement,” Providence wrote.
Behl, in his statement, said as “a California-owned, locally governed health system, we believe health care is strongest when decisions are made close to home — by people who understand the communities they serve and are accountable to them.”
“For decades, families in Napa have relied on Queen of the Valley not only for high-quality care, but also for compassion, stability, and a deep commitment to the community,” Behl said. “That legacy matters, and it deserves to be honored and strengthened.”
You can reach Staff Writer Martin Espinoza at 707-521-5213 or martin.espinoza@pressdemocrat.com. On Twitter @pressreno.