Chan Makes A Run At Sutter’s Tax-Exempt Status; Hospital Responds With Full-Page Ad

SAN LEANDRO HOSPITAL | Alameda County Supervisor Wilma Chan’s latest attempt to turn the legislative screws on Sutter Health and its likely attempt to shutter San Leandro Hospital may result in further scrutiny over the health care provider’s lucrative non-profit tax exemptions.

At a well-attended forum featuring Board of Equalization member Betty Yee, Chan and others questioned whether Sutter Health and other large health care providers are indeed, providing relevant charitable work that is legally required in return for tax breaks that totalled over $30 million statewide for all hospitals in 2011. In Alameda County, where chains like Sutter and Kaiser Permanente rule the roost, the exemptions equalled $1.2 million.

While the 90-minute public meeting again verged into a rallying cry for the community to continue opposition to the potential closure of San Leandro Hospital, a few notable employees of the hospital spoke out against some of Sutter’s practices and raising troubling questions over the trustworthiness of its general accounting. Sutter has long stated San Leandro Hospital is hemorrhaging money and unsustainable.

Eden Township Healthcare District Chair Carole Rogers told the group Sutter’s touting of charity work is woefully inflated. Many were angered Friday over a full-page color advertisement placed by Sutter in newspapers, including the San Leandro Times. In an obvious attempt to blunt criticism from Friday’s scheduled meeting, the ad boasts of donating $756 million in charity work over the years. Rogers, as a former Sutter employee, said she and others were periodically asked to document volunteer work performed on personal time. Rogers presumes the cards were used to artificially inflate Sutter’s charitable requirements for state tax breaks.

Procuring independent reports on Sutter’s books is nearly impossible since it is not only a private hospital, but because San Leandro Hospital’s license is shared with nearby Eden Medical Center in Castro Valley. Rogers also repeated a notorious story often mentioned by supporters of San Leandro Hospital who scoff at Sutter’s accounting of the facility when Eden donated a CT scan to San Leandro Hospital, but later charged it over $1 million for installation. Critics say the accounting arrangement was common and allowed Sutter to positively and falsely enhance the financial situation at Eden, while showing a loss at San Leandro Hospital. On the District’s legal front, Rogers said she was limited in what she can say publicly, but added, “San Leandro Hospital is still open and we’re in negotiations.”

Even though the tax exemptions are reserved for non-profit hospitals, the law allows for them to maintain a 10 percent margin on top of operating expenses, said Yee. In those cases, the surplus must be used for large-scale construction projects or expansion. Yee added there are a myriad number of ways a hospital provider like Sutter can find loopholes around their charitable requirements outside of quantifiable donations to actually charities–some as simple as publishing a small booklet, say, for children.

“These tax breaks come with responsibilities,” said Chan, who has long been a thorn in Sutter’s side going back to her stint in the State Assembly. Chan said Sutter was asked attend Friday’s hearing, but they did not respond to her invitation. Chan suggested legislation or changes in how the Board of Equalization deals with these types of tax exemptions. “When a non-profit closes a hospital, it needs a higher standard,” she said.

“They don’t get a pass on paying their taxes,” said Mike Brannan, a labor representative for the facilities California Nurses Association. “Their decisions are based on profits and not based on what’s good for the community.”

At the conclusion of the hearing, Yee, who is contemplating a run for state controller in 2014, was so unnerved by the potential for hospitals skirting their end of the tax break bargain, that she will write a letter to Sutter questioning their exemption.

In the meantime, the community continues to hope it can save its hospital. “What are we going to do if that hospital closes?” said Dr. Robert Gingery, a 30-year veteran of the hospital. “This is a health crisis. Some people will die.” Gingery said his physicians’ group performed over 1,000 surgeries at the hospital last year and he was scheduled for 3 that night. “It’s a busy place, but they tell us it’s not making money.”

One of San Leandro Hospital’s most ardent supporters again served as a cheerleader Friday. “Papa John” Kalafatich, who is also an employee at the facility, tearfully recounted for the audience news that his wife was rushed to the emergency room at San Leandro Hospital a few weeks ago. “If we didn’t have that ER, she might not be here today,” he said. “We have to stick together. You’re sticking up for me, my wife and yourself.”

Categories: Betty Yee, board of equalization, Carole Rogers, CNA, Eden hospital, mike Brannan, non-profit, Papa John, S.L. Hospital, Sutter, tax, Wilma Chan

14 replies

  1. Poppycock! Chan, Yee and loser Rogers should be spending their time on something else other than this loser of theirs. Also how is district going to reimburse Sutter for its legal fees and costs and other damages-therde are negotiations all right on how to get the district to reimburse sutter's costs-papa john and brannan are concerned because if hospital reverts to county they no longer will be involved in union-union will be SEIU. Dr. Gingery is full of it also-doctors were obstacle to potential settlement in '09 due to their not wanting to share hospital with county doctors. not every one out there has clean hands. By the way, my family and I and many others have visited hospitals outside area for ER care-due to our being kaiser patients. all interested in settlement? return to the possible 2009 potential settlement agreement. Tony Santos


  2. “may result in further scrutiny over the health care provider's lucrative non-profit tax exemptions.”

    Are they also looking at Kaiser's lucrative profits since Kaiser's building in San Leandro? Probably not since the Kaiser model is more politically correct and they are positioning themselves to benefit from Obamacare.


  3. Fuck you tony. You have something to say? Show your ugly face next time and stand up in front of the mic and tell everyone in person


  4. How much do the executives at Eden make? Then tell us they are a non profit.


  5. This was all a dog and pony show. How come this didn't take place when Chan first started office? She's finally trying to look active on SL Hospital. Too little too late


  6. “Share hospitals with county doctors” Where did you come from? As a San Leandro Hospital doc and familiar with the practices at ACMC (I did my residency there) , their model of providing care is not consistent with our practices. I cannot admit a private pay patient to Highland. I cannot obtain medical privileges there. If the county takes over, all private docs will have to admit our patients to other hospitals. And we will move out of San Leandro.


  7. Well Well Well, Tony's back, and arent we so excited, now we can hear some of the stupidest things imaginable, Tony you are no longer Mayor, so get over it you bald headed old fool, I looked all over the hall for you, where were you ? at home thinking up things to say about something you know nothing about, as a Kaiser patient I would imagine they use you for expiramental studies, how could someone without a brain live so long, I did miss you at the meeting I even mentioned it, but any time there is something to benefit the hospital and the city of San Leandro you are absent, and then I thought I had read that no fools were allowed. so I would suggest from now on you leave San Leandro, in response to our clean-up the city campaingn, we dont need losers like you around, and when the hospital remains open I will be here and you can just come and kiss my you know what, why do you keep reading this site arent you afraid you might have a heart attack, and for you to make statements about the Doctors here at the hospital shows your ignorance, you wouldnt know facts if they hit you in the face, since I work here I know what our Doctors like Gingery and Williams are talking about and know what an excellent Doctor looks like, I dont know if they could treat you since I dont believe they have a veterinarians license, both of these Doctors are responsible for people in San Leandro to still be here today, and for a fool like you to say anything about them, well just another example of your stupidity. Well Tony I will have to sign off for now but I will still be around, so how about you just crawl back under your rock and stay there, it will improve the smell around town.


  8. Papa John get you to take the ugly fact that he lied in your comment section down Steven?


  9. What the hell is this comment above trying to say ????? who lied and about what ????? I think I know why your anonymous, most fools are, explain yourself or just shut the f–k up the only thing ugly is who the hell you are. Everything I have ever said is the provable truth, and as for Steven, he reports it like it is, so why dont you either shut your big yap or say what you mean and put your name behind it, just think about it stupid, would I put my name there if I were lying, I guess you must be another one of the under the rock crowd, making comments about meetings they never attend, see you at the next meeting. JOHN KALAFATICH ( PAPA JOHN )


  10. You have stated in the past you never left a job except by your own choice, I simply posted a link to the Appellate decision that proved that statement to be false.

    I also had a comment that said you do damage to your side by being stupid, dishonest, and irrational. Whatever the merits vis-a-vis Sutter vs ETHD, I want you to lose since you are such a troll.


  11. I agree with anonymous 10:30 pm. Papa is stupid. Above is just gross.


  12. I agree with anonymous 11:22pm.


  13. The job you might be referring to is when I was injured on the job and was unable to continue on and not by my choice this is how I became an eventual employee at SLH, I have nothing to hide, so all of you anonymous wimps who are so afraid to include your names, spew hatred and contempt for some unkown reason except maybe being Sutter employees in Sacramento, you would be the ones who would know of my past jobs, and you would also know that my past work history is one of a competent and dependable employee, so how about spending some time researching what skeletons Sutter may have in its closet, or better yet why not do what I have said earlier, get back under your rocks where you belong. I would stack my life and work history against any or all of you anonymous idiots any day of the week if you would be willing to say who you are, but I would guess you all are anonymous in life as well as on this site, afraid to admit who the HELL you are. So until then I will again sign off and again I will give my name. JOHN KALAFATICH ( PAPA JOHN )


  14. To anonymous 6/25 10:30 I have just been thinking, I wonder if I should be flattered that you would take time off of your nonlife to look me up on the internet. So did you notice how many John Kalafatich's there were, and did you go any farther down than the appellate ones, like maybe to the one that Said John Kalafatich Sr. well I would like to inform you that is me, because you see I have a son whose name also happens to be John Kalafatich, as do some in Missouri, but you were more interested in the other ones, well the one that says John Kalafatich Sr. is when I used to fish bass tournaments and unlike your portrayal of me I do believe in helping others just like I do want the hospital to stay open, and its not that like you accuse me of being stupid and a troll, its just who I am, my friends also dont think much of my giving money to people on the street who ask for it, if I should have it I will give it. And so mr anonymous let me make your day, yes the appellate ones are also me, but if you just read the few lines printed there especially the one you loved where it says terminated, well there is quite a long story behind it and if some day you should really be interested in hearing it I would be more than glad to tell it to you, and unlike some have accused me of a union man, well if you were to know the whole story of my termination you would know that is not at all the case I am not a fan of unions, or lawyers for that matter both union lawyers and non union lawyers, so if it should disapoint anyone my goal is just to keep the hospital open once that is done you will probably not hear from me. I hope I have helped you understand where I am coming from and a little of where I have been, actually half of my working life has been as a shop steward where I had worked, and the other half was in management, and both positions were in two separate companies, I was first shop steward, and then because of my work ethic and ability to have people work I was asked to become the warehouse manager so I know not only to be union but also how to be management well thats about it for now, I will sign off for now. JOHN KALAFATICH SR. ( PAPA JOHN )


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