A San Francisco Bay Area hospital is in limbo as three parties and irate community members disagree over its future.
Triple play by the bay
Parties debate San Leandro's future, ER closure
San Leandro (Calif.) Hospital, just south of Oakland, is slated to be converted to an acute rehabilitation and urgent-care center next year under a new lease agreement, but community members, a powerful nurses’ union, local politicians and some members of the hospital district board are opposing the deal because it means shuttering the emergency department.
In late July, Sutter Health, a large not-for-profit hospital chain based in Sacramento, Calif., exercised an option in its lease agreement to purchase San Leandro Hospital from the Eden Township Healthcare District, Castro Valley, which owns the facility. San Leandro has 93 staffed beds, according to Sutter.
Sutter Health then signed a lease a month later with the county hospital system, the Alameda County Medical Center, Oakland, to convert the hospital to a physical rehabilitation center. The county medical center agreed to put in $25 million in repairs and seismic upgrades, and operate an urgent-care center on-site under the 22-year lease. However, county officials said they could not keep the emergency department open because that unit loses between $6 million and $10 million a year.
But in a 3-1 vote late last month, the Eden Township Healthcare District board voted against the sale to Sutter Health and said it would seek outside legal help to explore its options.
Local politicians, too, are pushing back. In a letter to California Attorney General Jerry Brown dated Aug. 28, 13 local representatives requested an investigation into Sutter Health’s business practices. “Residents want to know why Sutter is not listening to them,” said Democratic state Sen. Ellen Corbett, who represents San Leandro and is leading the fight against the emergency room closure.
The state Legislature in recent weeks passed a bill sponsored by Corbett that would extend the timeframe in which hospitals must notify the state they are closing their emergency rooms to 120 days from 90 days. Gov. Arnold Schwarzenegger has not said whether he would sign it.
Bill Gleeson, spokesman for Sutter Health, called the accusations made in the letter to the attorney general absurd. He said the system has invested $30 million into San Leandro Hospital. “Sutter Health has a unilateral right to acquire the hospital under the agreement,” he said.
Officials from the California Nurses Association, which is also opposing the hospital sale, disagree. The union, which has held numerous rallies over the matter, says because the district is the lawful owner of the hospital, the board’s vote overrides any lease agreement.
The issue dates back to 2004, when the Eden Township Healthcare District took over the struggling hospital from Triad Hospitals, and leased it to Eden Medical Center, which is operated by Sutter Health and is located about five miles away. Eden Medical Center, which has 178 beds, is now undergoing its own significant expansion project. Last year, the San Leandro Hospital lease agreement was amended, requiring service enhancements and other changes while Sutter Health continued operations until at least June 2009.
Meanwhile, the Alameda County Medical Center is seeking to enhance local rehabilitation services. The medical center offers these services at its Fairmont campus, also in San Leandro, but because of the state’s seismic safety laws, Fairmont would have to be completely rebuilt to keep operating after 2013.
The deal with Sutter Health “will save ACMC money, which means it will save the community money,” said Wright Lassiter, CEO of the Alameda County Medical Center.
About two-thirds of the patients seen at San Leandro Hospital’s emergency department could be safely treated at an urgent-care center, Lassiter said, while 5,000 to 7,000 ER visits would be rerouted annually to three other nearby hospitals.
The Eden Township Healthcare District doesn’t have the resources to operate the hospital independently, said Dev Mahadevan, CEO of the healthcare district. The district has $26 million in cash on hand, and has put $30 million over the past five years into the facility, he said.
Ultimately, there’s little the district can do to halt the sale to Sutter Health, Mahadevan said, adding, “A deal’s a deal.”
But Gleeson said the district still has not turned over the hospital to Sutter Health, and called it “a fluid situation.”
He added that Sutter Health would be willing to participate in a mediation process over the matter.
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