Alameda County Supervisor Wilma Chan

Healthcare district looking into parcel tax

HEALTH CARE | With the future of San Leandro Hospital still up in the air, Alameda County Supervisor Wilma Chan says its former operators–Sutter Health and the Eden Township Healthcare District–need to work together to solve the facility’s perennially poor bottom line.

“Both Sutter and Eden have the ability to end this,” said Chan. “But, right now, both are looking at each other to see what the other will do.” And, specifically, to the Eden Township District, Chan urged it to open its purse strings for the hospital’s operation, “I’m not telling them how to do their business, but I don’t think it’s an impossible act.”

Last month, Chan publicly proposed the Eden Township District allocate $2 million a year over the next 5 years, while also asking Sutter Health to add the $2 million in damages owed by the Eden Township to them to the pot. The extra $20 million would go far, said Chan, in keeping the hospital’s emergency room in operation for years to come.

In 2013, Sutter, was awarded control of San Leandro Hospital following a lawsuit by the Eden Township. Instead of shuttering the facility’s emergency room, Sutter, instead, donated San Leandro Hospital to Alameda Health System, along with a $22 million subsidy. Since Sutter Health was allowed to draw from the subsidy in the months before Alameda Health System took over, the amount of the subsidy is actually $14 million, said Chan.

Later, county officials hoped Sutter Health would also relinquish the roughly $20 million in damages in the judgment against the Eden Township. An Alameda County Superior Court judge last month agreed to allow the Eden Township Healthcare District to pay the damages in installments over 10 years. The first of the payments has already been paid to Sutter Health.

But Sutter Health, now says they never agreed to shifting proceeds from the lawsuit to San Leandro Hospital. “There was no agreement to donate anything collected on the judgment owed to us by the health care district,” said Stacey Wells, a spokesperson for Sutter Health. “We have been very clear and consistent: our generous contribution to Alameda Health System included the hospital plus the additional $22 million.”

Chan says the letter-of-intent to donate the hospital signed in June 2013 by Sutter Health and Alameda Health System officials says otherwise. But she notes the document was non-binding.

A section included in the letter-of-intent is somewhat ambiguous and details Sutter offering to “release the District from any obligation to pay damages…so long as District provides financial assistance to support the ongoing operations of the Hospital in an amount that Sutter reasonably deems to be sufficient support in light of the District’s financial condition.”

At the time, Eden Township officials said they were perplexed by the passage, particularly the word “reasonably.” In recent months, Eden Township officials have said they were never part of any deal regarding monetary damages due to Sutter.

Meanwhile, pressure continues to build on the Eden Township to offer additional funding for the operation of San Leandro Hospital, which Alameda Health System said last week lost $12 million last year.

The Eden Township Board of Directors may be feeling the heat. On Wednesday, they will discuss the potential of floating a hospital parcel tax next year to provide funding not only for San Leandro Hospital, but Hayward’s St. Rose Hospital (both reside within the health care district). The idea has been mentioned before by San Leandro leaders, but without any meaningful study.

Chan said she plans to apply political and community pressure on the Eden Township to encourage it to provide financial support. One step, said Chan, could come from Sacramento. A letter authored by Chan is already circulating among East Bay legislators, Assemblymembers Rob Bonta and Bill Quirk, and State Sens. Loni Hancock and Bob Wieckowski. San Leandro Mayor Pauline Russo Cutter said last week that the city will be signing the letter.

A legislative pressure point could involve the Eden Township’s unique situation as a health care district without a hospital to oversee and one which ostensibly functions only as a grant-giving body.

Eden Township officials have long maintained they have already expended millions to keep San Leandro Hospital since threats to close it by Sutter Health began in 2009 and with great detriment to its solvency. “I give them full credit,” said Chan, “but the hospital is still in jeopardy. Something needs to be done. It’s not over with.”