Corporate Shenanigans, Greed And The Will To Fight Back

The issue of San Leandro Hospital and its six-year-long association with Sutter Health, along with the facilities possible closing has been a long and wild ride for health care workerS and a band of rabid community activists. Here is a timeline of events starting with the pivotal 2008 Memorandum of Understanding between Sutter and the Eden Township Healthcare District AND leading to this week’s ruling in Alameda County Superior Court:

FALL 2008 – Sutter Health and Eden Township Healthcare District agree to memorandum of understanding guaranteeing the rebuild of Eden Medical Center and allowing a two-year window for finances at San Leandro Hospital to improve. Many believe San Leandro Hospital is saved, but a group of nurses and doctors are wary of Sutter’s tactics at other Northern California facilities.

WINTER 2009 – Sutter makes overtures with Alameda County to close San Leandro Hospital and convert it to an acute rehabilitation facility to replace the seismically-deficient Fairmont Hospital. Critics rail against Sutter saying the corporation did not give the hospital time to improve its bottom-line. Others suggest Sutter negotiated in bad faith and had designs to close the hospital, thereby eliminating competition to its planned state-of-the-art hospital in Castro Valley.

MAY 2009 – Doctors, nurses and community activists flock to the Alameda County Board of Supervisors claiming their approval of the Eden Medical Center Environmental Impact Report, in effect, will lead to the closure of San Leandro Hospital.

Supervisor Nate Miley lambastes the group for turning the hearings into a discussion of San Leandro Hospital and not the EIR. Supervisor Scott Haggerty famously wads up a letter from the San Leandro City Council asking to save San Leandro Hospital and theatrically slams it in a waste basket.

Neither the city or the county has jurisdiction over the hospital. It rest with the Eden Township District Board of Directors and I’ve been involved with them for the past year. I have told them repeatedly, look, you folks need to come up with some alternative plan to keep this facility operating. It’s up to you — San Leandro Mayor Tony Santos says in May 2009.

JUNE 2009 – A Southern California hospital chain with a recent history of taking over bankrupt community hospitals tells a large group of residents at the San Leandro Library that Prime Healthcare can fix the hospital. Dr. Prem Reddy, the charismatic owner of Prime, gets a standing ovation from the throng, but Sutter wants no part of having San Leandro Hospital in the hands of a competitor known for playing hardball with insurers and labor groups.

The next day, the board of supervisors approve Eden’s EIR allowing Sutter to break ground on the project. Miley tells Eden CEO George Bischalaney to negotiate with Prime. He says yes, but the two groups never talk.

The entire District board is notified before a community hearing at the library they all may have a conflict-of-interest in any decisions involving the District and San Leandro Hospital. This issue will return with more focus a year later.

Supervisor Alice Lai-Bitker saying the county only approved Sutter’s plan to convert San Leandro Hospital to rehab when there were no other options, tells the third of heavily-attended public meetings at the library, that she will ask her colleagues to rescind the offer. Ultimately, Lai-Bitker does not have three votes on the board to make it happen–only Miley stands with her–and the plan dies.

They are going to try to do this deal with the county despite what you heard here tonight. I really don’t think this is over. There are factions in the county who want that to happen and they are lobbying for that to happen — Mike Brannan, California Nurses Association.

Assemblywoman Mary Hayashi, via video, tells supporters keeping San Leandro Hospital is her “number one priority.” She is never heard from again.

JULY 2009 – Sutter breaks ground on $320 million rebuild of Eden Medical Center.

Community awaits word on whether Sutter will announce the closure of San Leandro Hospital. It could be as early as Sept. 30, 2009.

Hayashi fails to vote for her own co-sponsored bill with rival, state Sen. Ellen Corbett, scuttling possible legislation that would have aided the hospital’s cause.

Corbett obtains a waiver from the state extending until 2020 the deadline for Fairmont Hospital to be seismically retro-fitted. The previous 2013 deadline was a talking point of those in favor closing San Leandro Hospital.

A “hybrid model” of various services at San Leandro Hospital gains steam. Lai-Bitker gives her support. The plan has drawbacks as county officials say an annual subsidy between $6-9 million is needed to operate the plan with a full-service hospital, rehab and surgical services. She asks the District for $2 million to keep the emergency room open. In the current economy, nobody has funds for such an expenditure.

Alameda County Health Services Director Alex Briscoe tells supervisors Sutter’s figures regarding urgent care at San Leandro Hospital is way off. As an argument against the need of the ER, Sutter claimed 80 percent of its patients could be treated in urgent care, the real figure is 59 percent, in line with other hospital of its size.

Sutter exercises its right to purchase San Leandro Hospital. This is not good news for supporters of the hospital.

The future remains in doubt, but you can surmise from Sutter’s action that they do not plan to run the hospital as a private operation facility — Alex Briscoe, Director of Alameda County Health Services

AUGUST 2009 – Sutter’s pricetag for San Leandro Hospital: $0.

The District votes to block Sutter’s attempt to purchase San Leandro Hospital. The move sets the stage for the dispute to head to the courts.

Sutter quickly unveils its agreement with the Alameda County Medical Center to lease San Leandro Hospital for acute rehab without owning the property.

Corbett announces she will ask the attorney general to investigate Sutter for a pattern of abuse of its non-profit status, medical redlining and misrepresentation to local healthcare districts. Jerry Brown’s office responds to call for investigation. A determination is never made on the case.

SEPTEMBER 2009 – Eden CEO Bischalaney threatens to call the sheriff after a low-key group of hospital supporters demand a chance to speak during a public meeting of the District board.

Sutter and the District agree to mediation of their dispute. Odd pattern of obfuscation regarding some boardmembers aligned with Sutter begins to emerge. Boardmember Carole Rogers is denied access to the mediation, while another member Dr. Walter Kran plan to ditch her in a cloak and danger farce.

OCTOBER 2009 – Kran abruptly resigns from the District board citing competing pressures from the District and Sutter. A long held belief Sutter had threatened Kran with legal consequences comes again to the front of speculation. The resignation, though, leads to the start of a dramatic change in the board’s demeanor from pliant to Sutter’s wishes to defiance. Search for replacement begins.

NOVEMBER 2009 – Sutter sues the District in Alameda County Superior Court for the right to purchase San Leandro Hospital plus $5 million in damages.

The District approves the candidacy of Dr. William West to replace Kran. The retired podiatrist is seen as a strong supporter of the cause to save San Leandro Hospital. He becomes a crucial majority vote on the board along with Rogers and Dr. Vin Sawhney. The board is now poised to take a more aggressive stance towards Sutter.

DECEMBER 2009 – Boardmember Dr. Rajendra Ratnesar, who is Sutter’s last consistent voice on the board, pens a “letter to the community” asserting those in opposition to Sutter’s plan are a vocal minority. Corbett, Rogers and Sawhney angrily denounce the missive. Rumors begin to swirl that Sutter is the real author of the letter.

Three days before Christmas, the purge of those suspected at the District of having loyalties to Sutter continues. The board agrees to fire its long-time legal counsel Craig Cannizzo, who stomps out of the meeting after having choice words with Sawhney. Raises eyebrows when he says he will not cooperate in any transition to the board’s new lawyers. Sawhney says he did not trust Cannizzo.

JANUARY 2010 – Lai-Bitker, citing stress, announces she will not seek re-election to the Board of Supervisors. Comments made by Sawhney in The Citizen regarding Prime spook Sutter into sending a terse letter threatening legal action if it attempts to negotiate with the District.

Busted! Invoice to the District shows a Sutter employee is the author of Ratnesar’s controversial December letter. Sutter denies it.

FEBRUARY 2010 – District’s lawyers say West, Ratnesar and Sawhney have potential conflicts of interests after working for Sutter sometime in the past year. They ask to be recused from decision regarding San Leandro Hospital and Sutter. A month later, Rogers is also found to have conflict leading to an archaic drawing of lots to fill future three-member negotiating parties.

MARCH 2010 – District files a countersuit against Sutter alleging the now-contentious 2008 agreement with Sutter is null and void due to a conflict-of-interest among two members of the negotiating team. If found void, the original 2004 agreement keeping San Leandro Hospital for 20 years would be reinstated.

After voting against the District’s majority to authorize the countersuit against Sutter, Rogers calls for Ratnesar to resign since he is also named in the suit. Ratnesar refuses.

APRIL 2010 – Cries Sutter losing money at San Leandro Hospital fall flat after they post profits of $700 million in 2009.

JULY 2010 – Sutter is accused of moving $156 million out of the Marin Healthcare District as it transferred control of the hospital to the District. Since 2004, Sutter has made a total $50 million in equity transfers from Eden Medical Center to its general operating fund. Eden and San Leandro Hospital operate under the same license making it impossible to discern whether profits were stripped from San Leandro, Eden or both.

NOVEMBER 2010 – Alameda County superior court judge rules against the District’s countersuit alleging financial conflicts during the negotiation of the 2008 agreement.

The District votes to appeal the ruling. No timeframe is known for the fate of San Leandro Hospital, but operations will continue for the foreseeable future.