DISTRICT'S COMPLAINT MAY LEAD TO SUMMER FACE-OFF OVER CLOSINGBy STEVEN TAVARES
THE DISTRICT v. SUTTERThe relationship between Sutter Health and the Eden Township Healthcare District is best viewed in phases. The Pax Eden ended in 2004 when the District purchased the hospital and leased it to Sutter. Within two years, seeds of corporate bullying began to emerge. It's the great girlfriend who became the monster wife. The ill-advised purchase of a Hummer followed by $5-a-gallon gasoline and the tattoo on your lower back that seemed like a good idea way before those two kids popped out. The Buyer Beware analogies could go on forever and everywhere along the line. Since 2004, Sutter has held all the cards by shrewdly gaining leverage over the District by dangling the rebuild of Eden Medical Center as both the carrot and the stick, that is, until this week.
The District's lawsuit alleging a conflict of interest against three members of the group who negotiated the 2008 memorandum of understanding is a gamechanger. It's the moment when the District can possibly begin to erase the deal that in its shocking simplicity, effectively gave Sutter total control over the future of the District's two main assets--Eden and San Leandro Hospital.
Assuredly, there have long been voices shouting the lawsuit's same transgressions against Dr. Rajendra Ratnesar and Eden Medical Center CEO George Bishalaney and, to a lesser extent, former boardmember and vociferous defender of the MOU, Dr. Francisco Rico. Proving all three had blatant conflicts of interest does not seem hard to see. How anyone in 2008 thought having Bischalaney, who was the CEO of both Eden and the District, directly involved in its execution is preposterous and only conjures up a flood of conspiracy theories centering on the deep-seated perception Sutter, indeed, controlled previous incarnations of the District board and its recently deposed legal counsel.
In addition, Ratnesar was and is currently cozy with Sutter, although he denies impropriety by telling the local paper when it comes to any conflict of interest the righteousness of his heart apparently negates the rule of law. Rico, although amazingly eloquent and thought-provoking, was also uniquely tied to Sutter through a parntership in a medical group with ties to Sutter. It seems to beg the question, why wasn't anyone paying attention to this obscene flouting of the public's trust?
What this lawsuit illustrates is Sutter engaged in a surreptitious and massive takeover of a local government entity in the interest of increased profits and reduced competition in the area with profound implications to the residents of the community. Sutter's moves were made with such deftness that many did not see the signs until it became apparent the plan was to trade San Leandro Hospital for a shiny new hospital in Castro Valley. A call to action gained steam in the early part of last year, but it was nearly too late and gave Sutter a huge upper hand that it still enjoys. At every battle since, Sutter has merely plowed forward with reckless abandoned. Most infamously, they invoked their right under the 2008 MOU to purchase San Leandro Hospital and quickly leased it to the Alameda County Medical Center, bluntly saying 'I'll take that and do whatever I want with it' and attempted to do without paying a single dime. That certain amount of arrogance, though, may have been muted by the District's lawsuit this week.The presence of the District's lawsuit could likely keep the hospital running for months after the deadline and only heightens Sutter's greatest fear of all: an outside operator, namely an entity like Prime Healthcare flirting with the District.______________
Explicitly what it does is potentially reset the clock both backwards and forwards. It seeks to void the disputed 2008 MOU, which would allow the more favorable 2004 MOU (to San Leandro Hospital) to gain precedence once again, but it also may mute persistent worry over what happens after the hospital's license expires after June 30. County officials and San Leandro Mayor Tony Santos have been asking recently what the newly-energized District board plans to do about the possible lapse of the license. Allowing it to lapse could take up to $30 million to renew, the county has said. The presence of the District's lawsuit could likely keep the hospital running under the current license for months after the deadline and only heightens Sutter's greatest fear of all: an outside operator, namely an entity like Prime Healthcare flirting with the District. Both Boardmembers Carole Rogers and Dr. Vin Sawhney has strategically mentioned recently someone other than Sutter entering the fray. To Sutter's ears, such talk is akin to burning your 'tween daughter's poster of Taylor Lautner (for Gen-X women, insert Corey Haim. RIP.)
The roadmap to the future of this conflict is right there in the District's complaint. It is likely the District's lawyers are preparing for Sutter's next move, which would be to hang their hat on the arbitrator's decision last week which granted them the title of San Lendro Hospital and move forward with closing the emergency room and bringing in ACMC. Within the , though, is the threat of an injunction by the District is Sutter chooses this route. With the entire conflict tied up in a legal dispute, it is difficult seeing a judge siding against the District. If Sutter were to do the very act an overwhelming number of residents oppose and provoke an injunction by the District, it will only embolden a recently quiet group of supporters to grow into the determined and fairly large group we saw last summer. That group's actions are widely credited with giving the District breathing time to reorganize its plans and the content of its board. It also told Rogers, Sawhney and, to a lesser extent Dr. Harry Dvorsky, the community had their backs.
What we have now is the very first time, supporters for San Leandro Hospital have pushed Sutter on to their collective heels. The lawsuit against Sutter is compelling and will likely force them to actually negotiate with the District, instead of the slash-and-burn technique we have seen the past six years. If the lawsuit succeeds, the third phase of coexistence between Sutter and District might look more like the first six years, rather than the tumultuous last half dozen.
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