SAN LEANDRO HOSPITAL | On Tuesday morning, Alameda County Supervisor Wilma Chan was trying to get ahead of news reports detailing an impending deal to save San Leandro Hospital leaked to a business reporter the night before.
However, while the report laying out the framework of proposed deal allowing Sutter Health to transfer title of the health care facility to Alameda Health Systems along with a $22 million one-time subsidy hit the airwaves, very few local public officials were aware of its imminent execution. Not fellow Supervisors Nate Miley, Keith Carson and Scott Haggerty.
Curiously, not even the Eden Township Healthcare District, which Chan said Tuesday may be on the hook for funding the second year of the hospital’s operation with its own one-time $20 million subsidy.
“It’s news to us,” said Carole Rogers, the chair of the district’s Board of Directors. “You know more than us.”
Dev Mahadevan, the district’s CEO, said no official representative has formally brought the proposal to the District for discussion. In essence, Mahadevan added, good luck in getting the money. The District doesn’t have it.
In the aftermath of the protracted legal fight that ended with the District losing title to San Leandro Hospital to Sutter Health, the government body founded in 1948, has been forced to tighten its financial belt just as its real estate holdings suffer in the current economy and while it fights for tenants at its newly-constructed medical office building in Castro Valley.
Since the healthcare district has not been a tax-collecting body since 1975, it’s inability recently to generate cash flow forced it to reduce the amount of grants it gives out to various health-related entities within its district. And, without a hospital to oversee, its basically functions as a charity organization.
The issue of the District’s viability as a health care district has been raised in the past by Chan, who angered its board of directors last year when she hung the specter of dissolution over the body if it did not contribute to a multi-entity proposal similar to the deal announced Tuesday requiring Alameda County, the city of San Leandro and the District to pay a 3-year/$3 million subsidy to help offset costs for Alameda Health Systems to run the hospital.
But, the District countered by pledging to contribute its expected cash revenue in the next two years, topping out next year at over $1 million to the pool of money. That deal fell apart after Wright Lassiter, the CEO of Alameda Health Systems, pulled the plug on the proposal.
Although, the District may be cash poor, it also owns potentially lucrative real estate in Dublin with the Gateway Medical Center, along with its medical office in Castro Valley. Ironically, the District bought the property less than a decade ago to block a threat by Sutter Health to close Eden Medical Center in Castro Valley for potential greater returns in the Tri Valley.
Chan, however, may be again using the threat of leveraging the District’s future to obtain what she called a “sizable” subsidy. In fact, the Alameda County Local Agency Formation Commission (LAFCO), which Chan is a member, has raised the possibility of determining the district’s efficacy as a government body over the past few months. On Tuesday, Chan again raised the issue of LAFCO and the District at a Board of Supervisors meeting in Oakland.
The District isn’t taking the threat lightly. Mahadevan reiterated previous statement any attempt by LAFCO to strip the District of its authority would meet stiff opposition from health care district’s across the state who are in a similar situation; existing without a traditional hospital facility to oversee. Mahadevan said such a move by LAFCO would be unprecedented and could be met by a stiff legal challenge.