DESPITE PAST OBJECTIONS, SUTTER HAS REASONS TO DEAL
By Steven Tavares
The dedicated folks who have successfully kept San Leandro Hospital open for over two years despite pressure from Sutter Health and others to close the facility have never been particularly interested in compromise.
Whether feasible or not the mission of this group of doctors, nurses and concerned residents has been to rebuff Sutter and maintain the hospital’s services just the way they stand today as a full-service facility with an emergency room. Despite their firm beliefs, the notion has really only been pie-in-the-sky until Wednesday.
Enter the well-groomed and charismatic president and CEO of St. Rose Hospital Michael Mahoney. His plan to consolidate his facility with San Leandro Hospital under the stewardship of the Eden Township Healthcare District is the proposal the community has been waiting. Not only would it make both hospitals self-sufficient, it would reorganize the manner in which the local healthcare district provides care to its residents. Make no mistake, the amount of political juggling needed by Mahoney and District Chair Carole Rogers is going to be enormous. Not only will they somehow need to convince Sutter Health this “two-hospital system” will not interfere with its bottom line with a gleaming new Castro Valley Medical Center sprouting up nearby, but it will need to convince the Alameda County Board of Supervisors of the plans merits.
Mahoney surely has a motive outside of the greater good of the community, but like any good deal, it spreads the wealth around. At the heart is the idea two hospitals can draw more federal funding than just one. To do that, Mahoney is banking on leveraging St. Rose’s status as a disproportionate hospital to help fund both facilities. It is not a coincidence that the amount of inter-governmental transfers Mahoney believes the plan could draw is $7 million annually, at the minimum. That is nearly the same figure county health experts believe is needed to subsidize San Leandro Hospital. Alameda County Healthcare Services Director Alex Briscoe has always been adamant that no matter where a subsidy comes from, it must be guaranteed for at least a decade or longer. Mahoney’s plan seems to put this problem to rest.
Any proposal to keep San Leandro Hospital operationally is all well and good, but the trail of lackluster ideas like the hybrid plan has always led to Sutter Health’s ambivalence towards dealing with the District. So, what makes this deal different?
Despite Sutter being the face of corporate greed run amok to its local critics, it could have some interest in making a deal. As one nurse said Wednesday evening, Sutter has no interest in supplying care to an influx of patients utilizing MediCal or possessing little or no health insurance. Sutter, of course, would never agree with the assertion it favors high-end customers, but the critique of it instituting medical red-lining is pervasive in Northern California and certainly fits the dynamic between payers in San Leandro and Oakland versus Castro Valley and the Tri-Valley areas.
Although, it was a bit disconcerting Wednesday when Mahoney was asked how his plan would entice Sutter’s approval, that he only could muster up a line saying he knew their CEO Pat Fry personally and thought they were good people. His interpersonal relationship, though, with Fry could be a boon for San Leandro Hospital. It could be said at this point after nearly two years of legal and personal tussling between Sutter and Rogers, there is need for a new face and approach to dealing with Sutter. Rogers may have been the right person for the right time in the struggle to save the facility, but because of the circumstances around the issue, namely a lawsuit and countersuit in the courts, Mahoney is better suited to become San Leandro’s version of the hard-throwing closer.
Sutter would also avoid having a vigilant competitor to its $300 million palace of a facility in Castro Valley. It became clear this was a considerable fear when Prime Healthcare, a Southern California hospital provider known for ruthless billing practices tried to add San Leandro Hospital to its growing portfolio. Mahoney’s plan ducks this dynamic and seeks to provide a segment of community underserved by Sutter.
Most importantly, there are few corporation more aware of keeping their public relations profile in excellent standing than Sutter. It is precisely the reason the incredible outpouring of protest by local residents two summers ago so greatly emboldened the District to take on Sutter in the courts. It also piggy-backed similar themes in San Francisco and Santa Rosa portraying Sutter as greedy corporate hacks bent on screwing over the poor.
With that, there should be some excitement with news of the Mahoney Plan, but of course, it should be tempered. There has rarely been a story in these part with more amazing and surprising turns of events than the this, but this is the deal you have been waiting so long to hear about.