Rep. Eric Swalwell has agreed to lead a blue-
ribbon commission to alleviate Hayward’s
St. Rose Hospital and its finances.

Alameda County Supervisor Richard Valle said Monday that a blue-ribbon commission, already supported by Rep. Eric Swalwell, should be created to help solve the worsening financial condition at St. Rose Hospital, a facility viewed as crucial for continuing safety net health care services for the poor in Hayward and surrounding Central Alameda County.

Including unfunded liabilities, St. Rose Hospital’s annual deficit is between $20-22 million, said its CEO Aman Dhuper on Monday. The facility’s financial woes, however, have been longstanding. Numerous entities including the county, Eden Health District and Kaiser Permanente, among others, have contributed annual stipends in recent years to keep the hospital afloat.

The potential commission to be led by Swalwell would be another potential solution for finding a suitable plan going forward amid additional uncertainty over the future of the Affordable Care Act, Valle said during a meeting of the Alameda County Board of Supervisors health committee.

St. Rose Hospital needs roughly $8 million
in additional annual subsidies for operations.

The primarily focus of the commission would entail encouraging Sutter Health to forgive the $19 million judgment it received from the Eden Health District following its lawsuit over control of San Leandro Hospital. The strategy is notable since it was a similar gambit used initially by Alameda County Supervisor Wilma Chan to divert the proceeds from Sutter Health’s judgment for operations at San Leandro Hospital, which like St. Rose, is located within the boundaries of the Eden Health District (formerly known as the Eden Township Healthcare District.)

Instead, Sutter Health agreed to turn over San Leandro Hospital to the Alameda Health System, while Chan, Assemblymembers Rob Bonta and Bill Quirk threatened the Eden Health District over dissolution, which now appears unlikely. Meanwhile, Valle is offering a collaborative tone to the Eden Health District in hopes of possibly using its tax-revenue ability to help fund St. Rose Hospital.

Valle proposed a partnership with the Eden Health District during one of its meetings last month and its elected board of directors agreed to form a subcommittee to discuss its role in aiding St. Rose Hospital. “We’re here to help,” said Eden Health District Board Chair Roxanne Lewis, who also supports the proposal for Sutter Health forgiving the legal judgment against the district and redirecting the roughly $2 million annual payment to St. Rose Hospital. “I want to put the past behind us and move forward with a solution for St Rose,” said Lewis.

However, Valle told the health committee, $8 million per year subsidy is likely needed to keep St. Rose Hospital continually afloat. The figure could likely reached by cobbling together a number of differing funding sources. Supervisor Chan proposed one method is to increase St. Rose Hospital’s allocation of revenues from the voter-approved Measure A half-cent sales tax intended for county health care from $1.5 million annually to $3.5 million for the next three years. The infusion of funding would help the hospital during increased uncertainty over the next few years at the state and federal level over the future of the Affordable Care Act and MediCal, said Chan.

The Eden Health District has explored various versions of a parcel tax to prop up the finances of St. Rose Hospital, and before that, San Leandro Hospital in 2012. Lewis said a proposed parcel tax to help St. Rose Hospital last year, though, was met negatively by city leaders in Hayward and San Leandro. In addition, a countywide revenue-generating ballot measure would be costly and difficult to win since it would only affect a portion of Alameda County.

Nevertheless, the financial situation at St. Rose is dire and with limited number of viable solutions, said Dave Kears, a former director of Alameda County Healthcare Services and member of the St. Rose Hospital Sustainability Task Force. In a sometimes brutally honest assessment of the hospital’s financial future, Kears said, almost all of St. Rose’s payer mix includes patients with government-subsidized health insurance. “We might as well accept who are,” said Kears, who said the hospital is open to a variety of partnership models, but also added, “We have no illusion of growing ourselves out of this problem.”

In addition, the county taking over St. Rose Hospital from its current operator, Alecto Healthcare, is not financially feasible, said Kears, and would require significant upfront costs ranging between $60 million and $100 million. Instead, a wide-ranging partnership may be better suited for St. Rose Hospital. “It’s a quality hospital, but it’s struggling,” said Kears. “But we’ll get through this with a little from all of our friends.”