Cash-strapped Palm Drive Hospital, which filed bankruptcy last week and is scheduled to close at month's end, will likely receive two proposals next week to keep the Sebastopol facility alive but scale back its services.

A proposal offered by the Palm Drive Health Care Foundation and former hospital board member Dan Smith will come with a contribution of $700,000 or more to underwrite the downsized facility, Smith said this week.

The hospital board voted unanimously Friday to issue a request for detailed proposals, including a "comprehensive business plan" to continue services at west Sonoma County's only hospital.

Proposals are due by noon April 18 and the board's evaluation of them will begin that afternoon, officials said.

The board also voted to accept a $1.8 million loan from Sonoma County to cover post-closure operations, using part of the hospital district's property tax revenue to repay the loan.

The loan, scheduled for approval by the Board of Supervisors on Tuesday, would essentially advance the district tax revenues it would receive in the future.

"Time is our enemy here," said John Moise, a citizen member of the committee that will initially screen the operating proposals.

With the April 28 shutdown date looming, hospital employees need to know what their future holds, he said.

Smith, describing his role as a "philanthropist," said the foundation intends to maintain Palm Drive's emergency room, surgery, laboratory, imaging and pharmacy services, along with a five-bed ward, primarily for post-surgical care.

The hospital is licensed for 37 beds, but cannot sustain that number with a patient census of about eight, Smith said.

Hospital officials have blamed their cash crunch on declining patient numbers and low reimbursements from Medicare.

Dr. Jim Gude, now director of the intensive care unit, would become chief of staff under the foundation's plan, Smith said.

Gude, who sat next to Smith during the board meeting last Friday, said the current emergency room staff would continue to work under the foundation's plan, effective April 29, if that plan is accepted.

The foundation's group includes Dr. Jorge Gonzalez, head of the emergency department.

A group led by Dr. Michael Bollinger, an orthopedic surgeon, is also expected to submit an operating plan, Smith said.

Members of both groups met Friday in an attempt to forge a unified plan but did not come to an agreement, Smith said.

"We wanted to make it easier for the district (with one proposal)," Smith said. But no matter what happens, the two groups of doctors will "work together as a team," he said.

Smith said the Palm Drive Health Care Foundation will put up $200,000 and a charitable foundation he is involved with will contribute $500,000.

The health care foundation is a nonprofit created in 1999 when a group of local investors saved Palm Drive from a shutdown.

Smith, a Sebastopol high tech entrepreneur, has previously donated $2 million to keep the hospital open.

(You can reach Staff Writer Guy Kovner at 521-5457 or