Healthcare District Files Appeal; Offers New Revelations At Sutter

The Eden Township Healthcare District filed a writ of mandate request Dec. 2 with the California Court of Appeals in San Francisco

By Steven Tavares

Eden Medical Center CEO George Bischalaney, according to an appeal filed by the Eden Township Healthcare District, attempted to game both sides of now infamous 2008 Memorandum of Understanding between Sutter Health and the District’s attempt to save San Leadnro Hospital from closure.

District lawyers filed a writ of mandate Dec. 2 with the California State Court of Appeals, First District hoping to overturn the superior court ruling last month. “The respondent court abused its discretion and erred as a matter of law,” said the District’s lawyers in court papers.

Last month, Alameda County Superior Court Judge Marshall Whitley ruled against the District’s countersuit versus Sutter alleging Bischalaney and a former District boardmember Dr. Francisco Rico violated Government Code 1090. The law prohibits public officials from negotiating contracts when they possess a financial conflict-of-interests. In the ruling handed down in November, Whitley found neither defendant was proven to have received a “kick-back” of any kind and fell short of working for “two masters.”

Lawyers for the District argue Sutter plans to quickly convert the emergency room services at San Leandro Hospital upon receiving title to the property. “The adverse impact on the public would be immediate and severe,” the District cautioned.

The recent court filing reveals new testimony and shocking allegations never before made public. The 57-page documents paints a deceitful and cunning Bischalaney gaming the 2008 negotiations against the District. Bischaleney acted as CEO of Eden Medical Center while concurrently holding the same position for the District.

Bischaleney admitted in testimony that he was in a position to glean information from both sides of the negotiating teams and says its function was “to understand where the parties stood on issues that separated them.”

In Nov. 2006 after District served Sutter with a Notice of Default that preceded negotiations in 2008, Bischalaney notified the District of his “conflict,” but continued to participate as the lead negotiator for Eden Medical Center. Lawyers allege Bischalaney participated in District-only strategy sessions and dialogues, including closed-session board meetings.

  • April. 25, 2007, Bischalaney attended a closed session meeting on a proposed term sheet regarding Eden and San Leandro Hospital. He was present they say in a closed session hearing highlighting the District’s positions on issues later to be negotiated with Sutter.
  • Additionally, the court filing reveals more to the immense distrust some of the current Eden Township Board of Directors, including Chair Carole Rogers and Dr. Vin Sawhney had towards their former legal counsel led by Craig Cannizzo, who was fired late last December. District lawyers revel a disturbing alliance between Cannizzo and Bischalaney, who at times, appeared to be working in tandem with Sutter management against the District. Cannizzo is alleged to have given Bischalaney a copy of legal memorandum his firm had drafted for the proposed MOU with Sutter, which included legal analysis and opinions.
  • On Mar. 7, 2007, Bischalaney presented a PowerPoint presentation to Sutter management titled, “Eden Medical Center, Strategic Proposal for Partnership Renewal, Redevelopment and Growth.” The presentation, however, was created by the District and revealed their goals and objectives in negotiating with Sutter.

While the District’s lawyer are undoubtedly showing evidence of Bischalaney’s dual role at both entities, the District is conversely, attempting to prove his actions reveal he participated far more greatly than Sutter admits for the opposite side. The other defendant, Rico, is barely acknowledged in the Dec. 2 appeal. It does reveal the anesthesiologist derived all of his income from a doctor’s group, of which he is a partner, and accounts for 90 percent of its income from Sutter. It is also the sole provider of anesthesia at both Eden Medical Center and San Leandro Hospital. There is no timetable set for the decision on appeal. In the meantime, operations at both facilities will continue indefinitely.

7 thoughts on “Healthcare District Files Appeal; Offers New Revelations At Sutter

  1. Dr. Rico, you may NOT be a defendant in this litigation but it does seem you are as dirty as Bisch. Just so you know. It's called “perception is reality.”


  2. CORRECTION: I am NOT a defendant in this litigation. Read the court filings. They are accessable on the court's web site.


  3. This story boggles my mind. How in the world can a judge say Bischelany and Rico did not have a conflict? The judge had to be paid for by Sutter. It looks like George was just sticking his middle finger at decency during his whole time on the township board of directors.


  4. kaiser is only more profitable because they figured put a long time ago that having in house insurance is money in the bank. add to that, they keep their insurance rates down by turning down aplicants who have any type of illness. kaiser wins big time because most of their insured patrons never use their services.

    here's something to think about sutter:

    kaiser helps themselves make money by placing themselves next to public hospitals (ie: kaiser Hayward to st. rose as well as kaiser Oakland and highland). sutter, you're already on your way to inhouse insurance, if you don't want anything to do with SL the very least you should be doing is walking away and just let it exist. in turn it will continue to obsorb all your undesireables and Eden can make all the money you dream of


  5. Well, here is the deal, Sutter:

    You want to be the only game in San Leandro proper? Keep SLH running. The more beds you have, the more market share your enterprise steers away from looming Kaiser competition. It goes against the grain of business to try to succeed by contracting, unless the business is folding. It obviously isn't. You made almost 1 billion dollars in net profits in 2009, and I'm sure 2010 will be just as kind to your bottom line as the previous.

    Furthermore, converting SLH to hybrid use with 40 beds as rehab, and the rest roughly 85 beds as acute and ICU, you will have a facility running at 90% capacity AT ALL TIMES. The administrator's dream, is it not? And your spanking new facility up on the hill will be spared of the barrage of redliners and living-under-the-bridge undesirables coming your way if you close SLH.

    Oh, yeah, and the icing on the cake? Bisch may end up doing time, SLH nurses with 30-year seniority will displace Eden nurses. Fun! Nurses hating one another, half of them interlopers, and half the staff in training mode for 6 months. Med errors, lousy service. It's going to be a good start for the spanking new facility. The fallout? More customers deserting you, heading for Kaiser. Is this Pat's winning formula? I certainly hope he is a slightest bit smarter than that.

    So, stop the nonsense, Sutter, stop wasting yours and District's money on lawyers, and attend to the important business of running two wonderful facilities. Bury the hatchet. Think long term. Or Kaiser will chop your head off with it.


  6. None of the “shocking and duplicitous” testimony is new or previously not well known to the actual participants on both sides. This continues to be a waste of money by the Eden Medical District and a winfall for the coffers of the attorneys on both sides. It is time for all to fold their tents and skulk off to oblivion. Get on with it already. Julian.


Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s