The Sonoma County, Calif., Board of Supervisors is negotiating with Sutter Health Foundation of Sacramento to lease Community Hospital in Santa Rosa for 20 years.
Meanwhile, the hospital's unions, fearing for members' jobs and futures, are trying to mobilize public opinion to oppose the lease.
The 117-bed hospital has been losing money for several years. According to HCIA, a Baltimore-based healthcare information company, it lost $4.1 million in 1994 on $50.7 million in net patient revenues. More than 44% of admissions are Medicaid.
The supervisors want to affiliate with an organization that will make the hospital more competitive in seeking managed-care contracts. The hospital also needs substantial capital investment.
If the negotiations are successful, the Santa Rosa hospital would fill out Sutter's provider network in the north San Francisco Bay Area. Sutter is in the midst of completing a merger with California Healthcare Systems that will make it the second-largest player in northern California after Kaiser Permanente.
Columbia/HCA Healthcare Corp. also submitted a proposal, but supervisors thought Sutter offered a better commitment to charity care and a more substantial commitment to physical plant upgrades, said Jimmy Knight, the hospital's chief executive officer.
Sutter has pledged to spend $4 million for new equipment and improvements in the first two years, and a total of $12 million to upgrade facilities and equipment in the first 10 years. It will replace the facility by 2008. Various parts of the building date from 1932, 1938, 1956 and 1972.
Sutter will pay monthly rent of $16,000 and share profits with the county. It will participate in Sonoma County's medical program for indigent care. The supervisors wanted to continue the hospital's mission of caring for AIDS patients, women's health services and family planning.
Sutter has agreed to care for indigent patients and to retain all employees, including management, Knight said.
Nevertheless, Service Employees International Union Local 707, which represents 800 hospital employees, opposes the lease with Sutter. The union is working with local activists on a Campaign to Save Community Hospital. They have gathered nearly 30,000 signatures on a petition calling for a referendum to approve or reject the lease.
A poll by the Santa Rosa Press-Democrat newspaper showed that 74% of respondents think the lease agreement should be submitted to voters.
"There's two sides to it," said Mary Fromer, a Local 707 activist. "On the one hand, the union has to continue to represent the workers up there and negotiate with Sutter. At the same time, the union is part of the community coalition that feels the hospital should maintain its level of public service and public ownership."
Michael Allen, SEIU Local 707 general manager, said: "We just didn't look at the hospital in isolation. We have a totally integrated public health system. We have clinics, outlying clinics, visiting nurses, a home-health agency. We see this as the first step to dis-integrate, to rip up that integrated system. We're going to come up with an alternative. It's not good enough to say no. We have to put forward our own vision, and then ask people to vote on it."
The union said the indigent clientele will not receive the same level or amount of care once the hospital changes hands.
Sutter spokesman Bill Gleeson responded: "We believe (the charity- care provision) is absolutely sufficient and will more than address the need in that county. The hospital will provide care to anyone who seeks it there regardless of ability to pay. That is the system policy of Sutter."
The unions also are distressed that although Sutter has pledged to hire existing employees and recognize the four union contracts, it won't assume the contracts as written. The unions will have to bargain with Sutter to arrive at new contracts.