Eden Township Healthcare District Ordered To Pay Sutter Health $17 Million In Damages

SAN LEANDRO HOSPITAL | An arbitrator ordered the Eden Township Healthcare District to pay Sutter Health over $17 million in damages to compensate for losses the health care provider incurred during a two-year span while ownership of San Leandro Hospital was in legal dispute.

The District filed a lawsuit in 2010 in order to block Sutter’s option to purchase San Leandro Hospital and convert it to an acute rehabilitation facility. The lawsuit was seen as a critical step in keeping the hospital and its emergency room open for the next two years. An Alameda County Superior Court judge ultimately sided with Sutter and awarded it the hospital last year.

The gambit could have come at great cost to the District, however, Sutter will allow for the payment to be allocated towards operations at San Leandro Hospital, said Carole Rogers, the chair of the Eden Township Healthcare District Board of Directors. Last week, the District approved $20 million in subsidies to fund operations of the emergency room for one year.

Sutter had initially sought over $28 million in damages it said resulted in operating losses at San Leandro Hospital from April 2010 to April 2012. Although the District offered $11 million in damages, the arbitrator nearly split the difference.

In the past few months, movement on the future of San Leandro Hospital has come at feverish pace. In May Sutter offered to transfer title of the facility to Alameda Health Systems along with $22 million in subsidies. A letter of intent was subsequently signed allowing for the hospital to maintain the status quo with emergency room and without job losses.