Sunday, August 18, 2013

Sutter Coast Hospital Never Reports Annual Loss Until They Fire the CFO

August 18, 2013 
Sutter Coast Hospital Never Reports Annual Loss Until They Fire the CFO

The next time you hear that Sutter Coast Hospital (SCH) needs to downsize to a Critical Access facility because the hospital is losing money, please remember the following story:

After 24 consecutive years of profitability, SCH first reported a yearly loss in 2011.  It was also in 2011 that former Sutter Coast CEO Eugene Suksi fired the hospital's Chief Financial Officer (CFO), following which Mr. Suksi took responsibility for the hospital finances.  SCH bylaws specifically state the CFO cannot be the same person as the CEO.

The California Corporations Code requires Sutter Coast employ its own CFO, yet SCH has been operating without a CFO for over two years.   

After the hospital Board expressed increasing concern over the absence of a CFO, Mr. Suksi confirmed the appointment of Sutter Regional CFO John Gates as CFO for Sutter Coast in two emails, sent 5/29/12 and 9/14/12, both of which list Mr. Gates as a recipient. 

I remained concerned with the absence of a CFO because hospital bylaws stipulate the CFO perform specific duties, such as reporting to the hospital Board and working with the Chair of the Finance and Planning Committee.  The CFO is the financial professional charged with providing the Board reliable data at Board meetings, but these bylaws-mandated duties were not being fulfilled. 

Ultimately, I brought my concerns to auditors from Ernst and Young earlier this year, who confirmed to the hospital Board that SCH does not have a CFO.  After that announcement, interim hospital CEO Linda Horn notified the physicians that the position of CFO at Sutter Coast remains unfilled since July 2011.

Last week, Mr. Gates stated during a recorded meeting of physicians and hospital Board members that he was unable to answer the question of whether he was CFO for SCH.  

Sutter Health will not release any of this information to the public, but if anyone reading this sits on the hospital steering committee, the membership of which is being held confidential by Sutter Health, please ask if Sutter Health will allow you to view these emails, and I will send you copies. You may also wish to ask for the meeting minutes where the Finance and Planning voiced their concern that a CFO should be hired, and raised the question of whether the absence of a CFO could be a factor in Sutter Coast's revenue cycle issues.  With Sutter's permission, I will send you that information also.

I believe the hospital Board should delay our decision on Critical Access until Sutter Coast comes into compliance with California law, adheres to our bylaws and recruits a CFO, and has the opportunity to analyze reliable financial trends.  Anything less seems contrary to our responsibility to this community. 

If you also believe the County's only hospital should not downsize to a Critical Access facility and cut 50% of our beds, please write Calif. State Sen. Jim Nielsen, Assemblyman Wes Chesbro, U.S. Congressman Jared Huffman, and Attorney General Kamala Harris. Send me an email or stop by my office if you need contact information, or would like to add your name to the petition opposing Sutter Health's plans to take ownership and downsize our locally owned hospital. Or, send me your thoughts at and I will forward your comments to our elected representatives.

Thank you again for your support and encouragement.



Gregory J. Duncan, M.D.
Chief of Staff
Sutter Coast Hospital
(Please forward this email to anyone who may be interested).

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