Sunday, August 18, 2013

Latest Information on the Future of Sutter Coast Hospital

Latest Information on the Future of Sutter Coast Hospital
August 10, 2013 
In This Issue
First, I write to thank the Board of Supervisors for sending another excellent letter to Sutter Health, reiterating the Supervisors' ongoing opposition to Sutter Health's plans to dissolve our local hospital Board of Directors, and transfer ownership and governance of Sutter Coast Hospital to a San Francisco based Board appointed by Sutter Health.  The latest letter, addressed to Sutter Health CEO Patrick Fry and Sutter Coast CEO Linda Horn, repeated the Supervisors' concerns with Critical Access, including the facts that "the program would eliminate 50% of our hospital beds, necessitating hundreds of emergency patient transfers every year to distant hospitals, at the patients' risk and expense, and without their family or local doctor at the receiving hospital."  The Supervisors also noted that Critical Access would precipitate significant layoffs at Sutter Coast.

Sutter Health's response to the Supervisors' latest request for records was blunt.  During last week's hospital Board meeting, Sutter Health Regional President Mike Cohill stated, "we will not be releasing our meeting minutes to the Board of Supervisors or anybody else."

I understand Sutter Health is not legally obligated to release our hospital meeting minutes, but I certainly agree with several Supervisors who requested Sutter Health release the data and meeting minutes.  I fully agree with Supervisor Finigan, who advised in open session, "If you really want an open discussion, then release the data."   

Together with the Board of Supervisors and the Healthcare District, I will continue to work to preserve a full service, locally owned hospital, and prevent downsizing to a Critical Access facility.

Second, we have identified another problem with Critical Access--it will increase costs to patients, and not just costs of transports to distant hospitals.  In order to reduce the number of emergency patient transfers imposed by the Critical Access bed limit, Sutter's consultant wrote the following:  "the Hospital [Sutter Coast] can aggressively use observation bed services; however, this may not be sufficient to allow the Hospital to eliminate the transfer of patients outside the community." 

Observation patients are short term patients, who are not counted as part of the patient limit imposed by Critical Access.  Observation patients may not be commingled with patients on the inpatient nursing units in Critical Access Hospitals, and are subject to higher charges than standard patients admitted to the hospital.  Here is quote taken from the 2012 Sutter Coast Hospital Critical Access study:  "The beneficiary may not be aware that observation stays fall under [Medicare] Part B and require coinsurance and possibly other CAH charges."  According to Medicare regulations, "the beneficiary in an observation status will be liable for a coinsurance charge equal to 20% of the CAH's customary charges for the services."
(Regulation 485.620(a), 6/7/13)  

One should also know unless the hospital elects to place their observation patients in some of the 25 available hospital beds, they will need to occupy a stretcher.  Only 25 hospital type beds are allowed in Critical Access Hospitals.  Of course, on busy days like June 28, when there were 36 inpatients plus two observation patients in Sutter Coast Hospital, it will be necessary for many patients to be transferred elsewhere, due to the 25 bed limit.  Our patient numbers are typically lowest during the summer months.  What will happen during the busier winter months, when respiratory illnesses are common?

The hospital Board also held a discussion on Critical Access during our 8/1/13 meeting, which Sutter Health executive Mike Cohill concluded by stating he believed the Critical Access program would inevitably be implemented here in Crescent City, while acknowledging he had not spoken to Asante or any other potential management firms.  

If you have ideas or comments you would like to share, please send them to me at the email address below, or stop by my office on 1200 Marshall St. to learn more or add your name to the more than 3,000 local residents who have signed a petition opposing Regionalization and Critical Access designation for Sutter Coast Hospital.  To join our email newsletter, just send me an email at

Next issue: The story behind the resignation of Sutter Coast's excellent former Chief Financial Officer, and the ensuing reports of financial losses for the first time in the hospital's history.



Gregory Duncan, M.D.
Chief of Staff
Sutter Coast Hospital

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).