Eden Township Healthcare District Board of

Directors at a meeting last year.

ETHD can pay $17m damages now; dissolve

SAN LEANDRO HOSPITAL | An old wound is being reopened in the years-long fight to keep San Leandro Hospital in operation. Alameda County and hospital officials say the community hospital, despite various subsidies, continues to incur monthly losses of up to $1 million, and they say the hospital could be forced to close unless the Eden Township Healthcare District hands over $17 million. However, Eden Township officials say the healthcare district can’t afford to pay the $17 million all at once, and being forced to so would bankrupt the public agency.

The dispute over San Leandro Hospital stems from a long legal battle between Eden Township Healthcare District and the nonprofit giant Sutter Health. Eden Township had long sought to keep the hospital open — along with its emergency room — and had sued to block plans by Sutter Health, which used to own the hospital, to close it and convert it to an acute rehabilitation facility. Ultimately, the case ended in 2013 — mostly in Sutter Health’s favor, but with an amicable solution. Eden Township was ordered to pay Sutter Health $17 million, but instead of shuttering the hospital that predominately serves uninsured patients and those on Medi-Cal from San Leandro and Oakland, Sutter agreed to a separate deal brokered around the same time by Alameda County Supervisor Wilma Chan to transfer ownership of the hospital to Alameda Health Systems (AHS).

Sutter Health also offered a $22 million subsidy to keep the hospital’s emergency room in operation for at least two years. In addition, the City of San Leandro agreed to pitch in $3 million, spread over three years. And Sutter pledged, with some fanfare at the time, to donate to the hospital the $17 million in damages it won from Eden Township. Most observers, in 2013, believed the announcement was an attempt by Sutter Health to salve the public relations disaster it endured when it had tried to close San Leandro Hospital. Back then, city and county officials also believed the infusion of cash would help the struggling hospital’s become profitable and later expand.

But Eden Township officials now say they were never involved in the talks with Chan and Sutter and that the healthcare district cannot afford to pay in one lump sum the $17 million it owes. In fact, Eden Township officials have petitioned the court to allow it to pay the $17 million over time.

“We were out of the loop,” said Lester Friedman, a member of Eden Township board of directors, referring to the 2013 talks with Chan and Sutter.