Board’s New Course Fraught With Danger


The Citizen

Now that the Eden Township Healthcare District has cut ties with its legal counsel the board has effectively charted a new course in its bid to save San Leandro Hospital. The question becomes what exactly happens if the pursuit of a legal solution drags into the spring and summer months?

According to the Director of Alameda County Health Services Alex Briscoe, the move by the Eden board represents a risky gamble that may hamper the hospital’s ability to function past July 1. “I think there’s a faction on the board saying we are going to ignore the 2007 agreement,” said Briscoe. “I hope the board has good legal advice from their lawyers that they can win and I don’t know, maybe they do.” The 2007 Memorandum of Understanding between Sutter Health and the District ensured the reconstruction of Eden Medical Center and gave San Leandro Hospital two years to reverse alleged financial losses. The agreement also gave Sutter the option to purchase the hospital which was pursued earlier this fall and blocked by the District. The dispute led to the filing of a lawsuit by Sutter in early November.

Briscoe agrees with statements made this week by San Leandro Mayor Tony Santos and Eden Chair Dr. Rajendra Ratnesar saying the firing of long-time counsel Craig Cannizzo negatively influences any current deal to save the hospital. “They may have overstated it, but you would have to be a fool not to see this action could blow up in the board’s face.” Briscoe hesitated sounding the alarms on the hospital’s demise but said, “Litigation could jeopardize any option at the hospital.”

A day after the District’s first attempt to remove Cannizzo, the attorney quickly scrambled to put together a deal involving the District, county and Sutter Health. Ratnesar told The Citizen, Sutter listened to the proposal out of respect for their long relationship with Cannizzo and the District. Sources, though, say Sutter has never had interest in entering into any arrangement with the hospital. Without confirming any talks with Sutter on a deal involving a hybrid medical facility at San Leandro Hospital, Briscoe said, “In the absence of real dollars, there is no deal.” Briscoe has long maintained two studies confirm any hybrid option would need a yearly subsidy of between $6-9 million.

Stacey Wells, a spokesperson for Sutter Health, reiterated the health providers stance on the ownership of the San Leandro Hospital saying, “We have exercised our contractual right to acquire title to the property and we are pursuing title through the appropriate processes, given the District’s refusal to convey title. This is an ongoing legal matter and anything further would be speculation.”

Briscoe says the issue of the hospital’s operating license becomes “critical to any plan” starting July 1 with or without a settlement of the hospital’s ownership. When the county drew up plans months ago in advance of a possible transfer of the hospital, he says, part of the deal entails a short-term suspension of the hospital’s license to avoid large additional capital expenses to the transaction’s price tag instead of starting the licensing process from the beginning. What occurs if the current legal stalemate continues into the summer is unknown or whether an extension could be granted. Any announcement by Sutter to shutter the facility must occur 90 days before their year-long option to purchase the property passes July 1.

Santos told The Citizen Wednesday afternoon he supports the city procuring various government grants to keep the hospital open and says he has spoken with Rep. Pete Stark’s office on the chance of receiving federal dollars. Santos, though, hesitated in supporting any allocation of city funds likely to run more than $1 million a year. Any deal involving city money would be difficult to come by in an already tight budget with drastic cuts on the horizon, Santos said.

Briscoe says the county will be willing to join any funding possibilities with the District and the city to add leverage to any plan against Sutter. He also indicated financial help to both entities could be discussed down the line, but fell short on indicating its likelihood in the current situation.