Sunday, March 23, 2014

Guest article by Shellie Babich, Healthcare District Chair

March 23, 2014 
As many readers are aware, Sutter Health has taken action to downsize and take ownership of Sutter Coast Hospital.  Today's newsletter by Shellie Babich, Physician Assistant and Chair of the Del Norte Healthcare District, informs our community on the steps our elected leaders are taking to preserve and expand access to hospital care in our region.  Past newsletters are available at

I appreciate all of your feedback, and encourage anyone with ideas on improving healthcare services in our region to contact me at 707-465-1126 or by email at   Please forward this newsletter to friends, post on your social media sites, and send me an email if you are not receiving these free newsletters but would like to add your name to our list of recipients.

Before we get to Shellie's article, and before you read anything about the hospital, please ask yourself two questions:

(1) Is the information from someone with a financial tie to Sutter?
(2) Did the person giving the information sign a confidentiality agreement for Sutter?

In my case, and for Shellie, the answer to both questions is "no."


Greg Duncan, M.D.
Your Healthcare District Takes Action to Save Medical Care for Our Region

by Shellie Babich, Chair, Del Norte Healthcare District

As a lifelong resident of Del Norte County, local healthcare provider, and Chair of the Del Norte Healthcare District Board, I write to inform readers on the history of Sutter Health in our region, and how your Healthcare District Board is working to preserve and expand your access to affordable healthcare.

Twenty eight years ago, the Del Norte Healthcare District invited Sutter Health to manage our locally owned hospital.  In exchange for a monopoly over hospital care in our region, Sutter Health promised to manage a locally owned hospital, governed by a local Board of Directors, with expanded services.  The Healthcare District promised to not compete with Sutter Coast Hospital.  For 26 years, this relationship served our community well.

Then, on November 3, 2011, the Board of Directors of Sutter Coast Hospital ("SCH") abruptly and unilaterally chose to end their relationship with this community.  Without engaging the public, notifying hospital medical staff or employees, or consulting with the Healthcare District, the SCH Board voted to transfer ownership and governance of Sutter Coast Hospital to a corporation located in San Francisco and controlled by Sutter Health. The transfer of ownership was part of a Sutter Health statewide strategy called "Regionalization." The SCH Board did not read the bylaws of the corporation which would become owner of Sutter Coast Hospital before they voted to transfer hospital ownership to that corporation, nor did they look at any options other than those recommended by Sutter Health executives and attorneys.

Why is hospital ownership so important?  Because under regional ownership, every future decision affecting our only hospital will be made by a Board of Directors in San Francisco.  One such decision, which was actually made by our local Board (at the recommendation of Sutter Health executives), is their recent choice to downsize Sutter Coast Hospital by 50% in order to qualify for higher payments for the care of Medicare patients, under a federally subsidized program called "Critical Access."

Sutter's decision to downsize the hospital to a Critical Access facility brings several guarantees:

(1)  More profits for Sutter Health.
(2)  More patients flown out to other hospitals.
(3)  A cap on future growth of the hospital.
(4)  Fewer local jobs.

When a hospital downsizes, the staff is also downsized, and employees without work will leave our county.  Just this week, Sutter Health announced that local hospital employees will have their jobs eliminated as part of a statewide Sutter plan known as "centralization," whereby local jobs are outsourced to Sutter's regional service centers.  Sutter claims all these changes are needed to stem financial losses.  In 2012, Sutter Health reported net profits of $735 million.
The Healthcare District opposes to Sutter's decision to outsource local healthcare related jobs.  In fact, in our Temporary Restraining Order filed against Sutter, we successfully blocked Sutter from transferring jobs out of the county, in order to protect hospital employees while the lawsuit was heard. 

If Sutter is permitted to "regionalize" us, every future decision affecting our healthcare will be made by a distant Board.  This includes whether or not to continue supporting current hospital service lines (such as Pediatrics, Obstetrics, and Intensive Care), surgical equipment (for orthopedic and general surgery, eye surgery, and urology), and diagnostic machines (MRI and CT scanners, nuclear medicine, and ultrasound). In addition, patient care policies, employee benefits, staffing levels, contracts with physicians and employees, and how much to charge for your care--all will be decided in a Board room in San Francisco, closed to the public. Many local residents who have received care at Sutter Coast have expressed concern over Sutter's high charges for care and aggressive collections practices.  If Sutter Health takes ownership of Sutter Coast, we will have no local recourse to address these concerns, and no authority over the future of the hospital, forever.

Your elected Del Norte Healthcare District Board believes both of Sutter's decisions (Critical Access and Regionalization) were made for the benefit of Sutter Health, and are not in the best interests of this community.  On January 28, 2014, the Del Norte Healthcare District unanimously resolved that Sutter Coast Hospital should remain a locally owned acute care hospital, not a Critical Access hospital owned and governed from San Francisco.  Since it is clear Sutter Health is determined to enact its corporate plans, and end its longstanding relationship with our community, the Healthcare District is taking action.

To date, three healthcare systems other than Sutter Health have expressed an interest in a closer affiliation with our community.  In addition, a Healthcare District subcommittee initiated discussions this week with a national healthcare firm which has evaluated our market and stands ready to assist in any capacity the District requests.

In any challenging environment, a trustworthy partner is essential.  Sutter Health, with their closed Board meetings, mandatory confidentiality agreements, inconsistent statements, and refusal to honor county requests to release documents, is no longer a trusted partner.  I understand healthcare is changing, and our community needs to adapt to those changes.  But our primary mission must be to serve our citizens, not a distant corporation.

The Del Norte Healthcare District, in collaboration with other county and city leaders, is committed to providing accessible and affordable healthcare to the 42,000 residents and thousands of yearly visitors to the hospital service area.  We appreciate your input thus far and look forward to working with you in an open, honest, and transparent manner in the years to come.


Shellie Babich
Chair, Del Norte Healthcare District

Saturday, March 15, 2014

The Future of Healthcare in Our Region

The Future of Healthcare in Our Region

Today's guest editorial is written by Dr. Kevin Caldwell, a local Family Practice physician and frequent recipient of Del Norte County's "favorite physician" award.
Before we get to Dr. Caldwell's article, I would like to thank everyone who responded to the request by the California Department of Public Health for community input regarding Sutter's decision to convert Sutter Coast Hospital into a Critical Access facility. In addition to the letters you sent separately, I forwarded 115 letters of opposition to Critical Access, written by residents of Del Norte and Curry Counties, to the Calif. Dept. of Public Health last week.
Please forward this newsletter to anyone who may be interested, and post it on social media.  I also appreciate your emails with ideas on this issue, and how to improve transparency and affordability of healthcare.
Gregory J. Duncan, M.D.

Our Healthcare Decisions Must be Based on Fact  and Transparency

by Kevin Caldwell, M.D.
As a current Del Norte Healthcare District Board member, three term former Chief of Staff and Board member of Sutter Coast Hospital ("SCH"), and local physician for the past 29 years, I would like to clarify some information published in last week's Del Norte Triplicate which may have left readers confused as to the ownership of SCH.  As you read articles on Sutter's plans for our community, please ask yourself if the information was written by someone who receives money from Sutter Health.  I have no financial ties of any kind with any Sutter corporations.

First, a definition of Regionalization:  a Sutter Health statewide policy to transfer ownership of community owned Sutter affiliated hospitals FROM local ownership TO regional ownership.  In our case, Regionalization would transfer ownership of Sutter Coast Hospital (which has always been owned and governed locally) FROM Del Norte County TO Sutter West Bay Region in San Francisco. 

Sutter Coast Hospital is currently owned by the corporation of Sutter Coast Hospital, and is governed by a Board of Directors, the majority of whom reside locally.  SCH is affiliated with, and managed by, Sutter Health.  How do I know this?

(1) The settlement agreement between Sutter Health and the Del Norte Healthcare District states, "Sutter Coast Hospital owns Sutter Coast Hospital."  In the first draft of the settlement agreement, Sutter attorneys inserted the statement, "Sutter Health owns Sutter Coast Hospital," but the Healthcare District made Sutter Health remove that statement, because it was false. Nevertheless, SCH CEO Linda Horn continued to spread the false claim that Sutter Health owns SCH.

(2)  Sutter West Bay Region President Mike Cohill, in a recorded meeting held in Del Norte County on 8/2/12, stated that Sutter Coast Hospital is owned by Sutter Coast Hospital.  

(3)  Sutter Coast Hospital currently has its own Board of Directors, bylaws, Articles of Incorporation, and tax I.D. number, all of which are dissolved with Regionalization.   

In last week's Del Norte Triplicate, editor Richard Wiens quotes the following from the Settlement Agreement between Sutter Health and the Del Norte Healthcare District: "Sutter Health has been the sole general member of Sutter Coast Hospital, with the right to exercise control over it, since its inception."  I suspect few readers understand the meaning of that statement.

The "General Member" is Sutter Health. In some corporations, the General Member is all-powerful.  In our case, the General Member is not--Sutter Coast has a number of powers over Sutter Health.  "Control," in the sense used here, is a legal term which means Sutter Health has the power to appoint the majority of the SCH Board.  "Control" does not mean Sutter Health can do whatever they want--their powers are limited by SCH bylaws, Sutter Health bylaws, Medicare regulations, Joint Commission standards of hospital accreditation, and California law.  Evidence of Sutter's repeated violations of these regulations, and California law, will be detailed in future articles.

According to Mike Cohill, Sutter Health and SCH are separate corporations, each with its own unique powers (which Mr. Cohill calls "reserve powers"), as defined in the bylaws of each corporation. One of SCH's reserve powers is the authority to approve and disapprove of mergers.  In other words, Sutter Health cannot transfer ownership of Sutter Coast out of Del Norte County (Regionalize) without the approval of the Board of Directors of SCH.

The SCH Board did vote to Regionalize on 11/3/11, over my objection. I advised my fellow hospital Board members that we should not vote on something we did not understand.  The Board had not read the Regional bylaws before voting to Regionalize, although three hospital Board members falsely stated they had read the Regional bylaws in advance of the Regionalization vote.  I know this because the Regional bylaws were not distributed to the SCH Board until 11/8/11, five days after the vote to Regionalize. So, the hospital Board voted on a policy they had no way of understanding.  Does a Board have a responsibility to cast an informed vote?

In 2011, Sutter Regional executive Larry Dempsey, Esq., re-wrote the bylaws of SCH, weakening many of the hospital's reserve powers over Sutter Health.  Mr. Dempsey did not explain this fact to the SCH Board, which had no independent legal counsel. On 2/3/11, following minimal discussion, Mr. Dempsey's 1300 changes to the SCH bylaws were approved by the SCH Board. 

The California State Bar is the agency which oversees attorney conduct.  It is a Bar rule that one attorney cannot represent two parties without the written informed consent of both parties. Sutter Health  attorneys never obtained consent from SCH before re-writing the SCH bylaws or asking the SCH Board to dissolve themselves and transfer hospital ownership to San Francisco.  Dr. Duncan and I filed a complaint regarding two Sutter Health attorneys to the State Bar, which is currently under review.   

The fact is, despite overwhelming community opposition to Sutter's plans for this region, Sutter refuses to budge.  Sutter Health is determined to end their 28 year relationship of managing a locally owned, Acute Care hospital in Del Norte County. The SCH Board refused to rescind their Regionalization vote. Regionalization remains SCH Board policy.  Sutter will not release any Board meeting minutes. Last May, SCH CEO Linda Horn announced in a televised meeting that "Critical Access is not being discussed," even though the SCH Board had just approved a $170,000 study on the hospital which mandated an analysis of Critical Access.  In December, the SCH Board voted for Critical Access. Last month, they filed the application.

The SCH Board refuses to discuss community letters of concern in the Board room, which remains closed to the public.  Sutter Coast's ongoing secrecy and high prices have compelled many in our community to seek care at distant hospitals, resulting in a steady decline in our hospital census over the past year.

During our 1/28/14 meeting, the Del Norte Healthcare District voted unanimously to oppose Critical Access and Regionalization.  The Triplicate did not report on that resolution, so the District ran the announcement as a paid advertisement.  We believe our community deserves options for their healthcare. Three other healthcare systems have offered to provide capital to develop an affiliation with our hospital.   Please share your thoughts with me and my fellow  Board members at: The Del Norte Healthcare District, 550 E. Washington Blvd., Crescent City, CA  95531.  We want to hear from you.

Kevin J. Caldwell, M.D.
Redwood Family Practice
Crescent City, CA