By Steven Tavares

The president and CEO of St. Rose Hospital thinks he may have the silver bullet needed to save San Leandro Hospital while remaking how health care is dispersed in the Eden Township Healthcare District. Before that happens he’ll need to convince the county board of supervisors and then cajole Sutter Health to drops its claim on the hospital. Not an easy task.

Michael Mahoney gave the public its first glimpse of his proposal to form a “two-hospital system” within the current Eden Township Healthcare District and composed of St. Rose Hospital and San Leandro Hospital without losing any of the services each facility provides to local residents. Mahoney told the District Board of Directors, the conceptual plan could be employed in a sustainable fashion with the use of federal matching funds.

“It is possible to run the organization in a profitable, sustainable manner,” said Mahoney. “It is not without its challenges. A lot of hard work, a lot of commitment needs to be shown from the medical staff and everyone down the line. But, I think we have shown we can do that.”

Much of concept is centered around creating a larger economy of scale in the District by St. Rose joining the District along with San Leandro Hospital. Both would be under the auspices of the current District board, while the facilities would combine their front offices and management. Each hospital would continue to perform their current functions highlighted by two round-the-clock emergency rooms. The issue of functioning ERs has been the main sticking point for supporters of San Leandro Hospital who feared many lives would be lost by Sutter and the county’s decision to potentially shut down the ER and convert the hospital to an acute rehabilitation facility.

Mahoney believes the union of the two hospitals can be funded in the long-term with inter-governmental transfers from federal funding. St. Rose brings in $7 million annually in transfers under its designation as a “disproportionate share” hospital since it handles more lower-income patients using MediCal than surrounding facilities. San Leandro Hospital, though, does not currently qualify for such inter-governmental transfers, but Mahoney is encouraged by a pending state senate bill allowing for the designation if a disproportionate hospital is contained within a district. That is where St. Rose’s possible move to the Eden Township District become one of the proposal’s fulcrum points.

It has long been assumed by the Alameda County Healthcare Services that any plan to operate San Leandro Hospital over the long-term would necessitate a consistent subsidy between $6-9 million. With fluctuating inter-governmental transfer between $7-14 million per year, the all-important financial aspect of the deal may suffice, but the problem for the District continues to be Sutter’s unwavering desire to follow through with its attempt to gain ownership of San Leandro Hospital and lease it to the Alameda County Medical Center for much-needed acute rehab beds.

When Mahoney was asked how his proposal might entice Sutter into abandoning its claim on the facility, he dodged the question. “The people that run Sutter Health are good people,” Mahoney said while noting a long professional relationship with Sutter CEO Pat Fry.

“They have the same interests that we have—they have it on a different scale. What we need to do is work with Supervisor Chan, who is passionate on this issue and [Alameda County Healthcare Services Director] Alex Briscoe and work with the county and other community groups to get the opportunity to engage the public process to bring this to the point where the health committee of the board of supervisors has an opportunity to understand that we are passionate, but also diligent and understanding this is an operation that needs to be sustained by the income it generates. I’m confident we will get a result that is in the best interest of the community,” said Mahoney.

Part of the work will include adding to the support of Supervisors Chan and Nadia Lockyer on the Alameda County Board of Supervisors. Such support would presumably entail a majority of the board to rescind its current offer to allow acute rehabilitation beds from the seismically-deficient Fairmont Hospital to be moved to San Leandro Hospital. The previous board was never able to attract a third vote for such a move.

Eden Township Director Les Friedman said he worried there could be labor troubles in combining St. Rose and San Leandro Hospital. The powerful and vocal California Nurses Association, which has been such a catalyst in organizing not only its rank-and-file, but the community at-large, has already voiced a willingness to deal with St. Rose management if Mahoney’s plan is successful. CNA does not represent nurses and technicians at St. Rose.

“This may require sacrifices,” said Friedman, “but in order to keep those jobs, which are essential, would rather than take a minimum hit than a total job loss. I think that just makes sense every single time. If people have open minds we can get that two-hospital system going and the community will be better for it.”

Even if the long battle to save San Leandro Hospital were to come to a successful ending, other important health care issues would still exists such as the need to replenish acute rehab beds along with psychiatric services in the county. According to Mahoney, Briscoe says the county has land to provide for a rehab hospital if an investor is interested in constructing a facility.

In the meantime, the District and Mahoney will be spending the summer and early fall working to save San Leandro Hospital on two fronts: one in the courts—the District’s suits are entering the appellate stage, while predictably lengthy negotiations will continue with the county and Sutter for the next few months at the minimum.