SAN LEANDRO | Feb. 10, 2012 | Although the Eden Township Healthcare District’s special public meeting was held in San Leandro last Wednesday, the real impetus for the gathering was to describe the District’s efforts to extend a lifeline to the beleaguered St. Rose Hospital in nearby Hayward. The two groups are exploring a plan to transform the privately-run facility into a public institution under the umbrella of the District.

St. Rose’s inability of late to provide services to some of the largest numbers of uninsured patients in Alameda County has nearly reached a breaking point. Last summer, St. Rose secured a $3 million line of credit from Cal Mortgage to maintain operations. The loan, though, came with certain conditions; namely putting the hospitals operational and financial structure under the microscope of an independent auditor. In August, it received an additional $3 million loan to cover its payroll. It defaulted on the loan in December before issuing a payment schedule that runs through this March.

In addition, there was a fear as early as last August that St. Rose’s inability to pay its obligations could have attracted the attention of the Office of Statewide Health Planning and Development (OSHPD), which has the right to take over the facility and institute across-the-board changes to its management structure.

Later this month, the Alameda County Board of Supervisors may approve a $325,000 to fund the 18-month salary of chief turnaround officer to install various changes to the hospital’s operations as prescribed by a report issued last November. Most notably, they include steep cuts to staffing, which auditors said was too high as compared to facilities of equal size.

Michael Mahoney, the CEO of St. Rose, urged residents last Wednesday to approve the potential merger, if and when, an agreement is secured with the District. Any addition of St. Rose under the auspices of the District would require a vote by referendum. Adding St. Rose would allow the hospital to benefit from state and federal dollars as a public facility that it could not otherwise obtain as a private entity. Such a deal would also the District to float a potential parcel tax that could secure additional revenue for St. Rose sometime thereafter.

“Access for the most vulnerable in our community is very strained,” said Mahoney. “The safety net has many holes in it. What we’re talking about is re-stitching the state’s safety net to make sure those gaps and holes are filled in. We cannot do that if you don’t talk to each other and commit to looking at resources and restructuring in a way that is designed to meet the need of the people we serve and not designed to meet the needs of the institutions we may work at.”

With the future of San Leandro Hospital very much in doubt, critics point out the District’s ability to survive as an elected body without a health care facility to oversee, could be hard to justify, especially during harsh economic times.