The process will take out both the salt and the hospital waste. Hospital waste is easy to take out just by passing the water through a screen. Taking out the salt is more difficult and needs large and expensive screens or membranes.

I can understand your concern.Taking the salt out of sea water to make it drinkable would probably be only one of the steps. Big things like hospital waste would be screened out and the water would be purified to prevent diseases. I'm sure you have noticed that the beaches sometimes have to close due to disease organisms in the water, so you wouldn't want to drink it either. For more information on Santa Barbara's desalination plant, see
http://www.ci.santa-barbara.ca.us/wresourc/bfsupply.htm,
click on desalination or browse through it.
Their main page,
http://ci.santa-barbara.ca.us/wresourc/
has general information on water in SB county. I don't know how they remove hydrocarbons (oil residue). You might contact your local water provider for information on that. Even without spills, we release a lot of oil into our water by not recycling oil in our cars.
Remember that only 1% of the world's water is fresh water, and only a fraction of that is drinkable, so we need to take care of it.

Thanks for asking.