A Starting Point in Negotiations

Eden District Director Calls Possible Sutter Proposal A ‘Starting Point” By Steven Tavares
Very little news has trickled out the past month with the Eden Township Healthcare District ‘s battle with Sutter Health over the fate of San Leandro Hospital. The reason according to numerous sources is the countersuit filed by the District March 10 forced Sutter Health to “stand down” as the District Chair Carole Rogers said earlier this month. The successful gambit by the District’s lawyers to allege conflict of interest by two members of the 2008 board along with Eden Medical Center’s CEO raised the stakes, according to one source in the county.

If the 2008 memorandum of understanding signed by the District and Sutter can be proven to have been signed within the realm of a conflict of interest by the alleged parties, the entire agreement is nullified according to state law. The District best outcome would be to wipe out the 2008 deal and revert to the far more favorable 2004 agreement that held Sutter responsible for rebuilding Eden Medical Center and, the most important part of the deal in the District’s mind, keeping San Leandro Hospital open for the next 20 years.

After nearly two years of hardball tactics by Sutter, the District’s countersuit has for the first time pushed the Sacramento-based health care provider to make an offer. According to sources familiar with the propsal, Sutter has floated a plan for which they would provide $1.5 million towards the $6-9 million annual subsidy needed to keep the hospital operating. Sutter would complete the $5 million in capital improvements laid out in the 2008 MOU (This point is referenced in Sutter’s response to the District’s countersuit with Sutter in agreement) and keep the hospital open until 2013. Nothing is news about the first two points. The possibility of Sutter, the county, the District and the city of San Leandro splitting the subsidy has been mentioned before, but never with any sort of timetable. A spokesperson for Sutter knew nothing of the plan, but sources believe the idea did not come from the District or county, but Sutter. District Director Dr. Vin Sawhney, who is one of three who sit on the exclusive negotiating team dealing with Sutter denied any knowledge of Sutter’s proposal, but said it “would be a good starting point.”

Such a deal would appear to be advantageous to Sutter. The reconstructed Eden Medical Center would be near completion by 2013. In addition, the new Kaiser Permanente campus in San Leandro would be a year away from operation, possibly eliminating one of the main concerns of residents–the lack of a nearby emergency room. It would also quiet the vociferous band of citizens who many believe have stymied Sutter’s efforts to close the emergency room for over a year.

Another concern on the horizon involves San Leandro Hospital’s operating license expiring Oct. 31. It was previously reported the lease would lapse at the end of June, but this is not the case, according to a source. The issue of the hospital’s expiring license poses numerous problems to all sides of the conflict. The dueling lawsuits between Sutter and the District show few signs of being solved this summer and Alameda County Health Services has indicated several options could be applied to the license. The worst case scenario, though, would be allowing the license to lapse. According to the ACHS, reapplying for a state license would cost up to $30 million; money the county doesn’t have or burdening the hospital with an additional large expenditure added to any possible purchase of the facility.

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