Thursday, February 19, 2015



by Kevin Caldwell, M.D. and Donna Sund, D.O.

Many readers are aware of the new local EPO Health Plan being offered by Sutter Health, Anthem, and CalPERS.  You may or may not be aware that Redwood Medical Offices and several other local offices are not currently listed on the provider panel.  Here's why:

The new EPO plan is an "Exclusive Provider Organization."  This means that in order for you to be treated, you have to go to an approved provider and an approved hospital.  None of the local independent (non-Sutter affiliated) providers we contacted were offered an opportunity to join the provider panel before the initial plan roll-out on January 8.  We learned of the plan in the middle of January, when patients approached our office with letters from Sutter Health/Anthem Blue Cross/CalPERS, offering them a new health plan in our area.  We knew nothing of the plan until patients brought us these subscriber letters, and our patients obviously had many questions and concerns.

In the past, when a new health plan was made available, especially to large local employers, the plan administrator would contact us before the roll-out to offer us an opportunity to be on the provider panel.  However, this time the list of participating doctors included only Sutter-affiliated providers (two of whom have already left the area). The only hospital on the approved list is Sutter Coast Hospital. For 30 years, Redwood Medical has always been offered participation in local health plans, and we have been providers for CalPERS/ Anthem since its onset.  In fact, we provide a significant amount of the local primary care to these many employees and their families, and have done so for decades.

When we realized our office was not on the EPO provider list, we immediately contacted Anthem to learn why not. This was the reply from Anthem Senior Managing Consultant Mark Johnson:  "Sutter is taking the lead on adding additional Del Norte County physicians into their EPO plan network providers."  Mr. Johnson added that he would forward our concern and request to be listed on the provider panel to Sutter, but we never heard back from Sutter or Anthem until later that month.

On January 27, Sutter Coast Hospital CEO Mitch Hanna told the hospital Medical Staff that he understood providers who are on Anthem's PPO list of providers were eligible to be on the EPO provider list.  He invited Medical Staff members to call him if they were interested in joining the plan. So we contacted Mr. Hanna's office the following day, indicating our interest in joining the provider list and asking for more details.  But our inquiry to Mr. Hanna about the plan's terms and restrictions has gone unanswered.  Now, halfway through the patient sign-up period, we are still not on the panel, and have not received any further information from Sutter or Anthem about the plan.

Some of our unanswered concerns about the EPO include:

(1) According to the letter sent to plan subscribers, the plan offers "no charge for inpatient or outpatient" hospitalization (as long as you go to Sutter Coast Hospital).  But according to the actual EPO Disclosure Form, there is a $250 co-pay charge for endoscopy, cataract surgery, and spinal injection, and $50 co-pay for an emergency room visit.   

 (2) According to letters from Sutter Health/CalPERS/Anthem sent out on Jan. 8 and Jan. 19, "members do not need to select a primary care physician."  Those same letters also state that the "EPO Plan is specifically designed to not require a primary care physician." But according to an email sent to a local doctor by Nora Nunn Powers, Anthem Regional Director of Provider Contracting, "the structure of the product requires that any request for referrals outside of the established/approved EPO panel need to be directed back to the primary care physician for referrals to other specialists."

 (3)  If patients present emergently to Sutter Coast Hospital and require transfer, either due to specialized needs, such as a heart attack, or because our local hospital is "full"and unable to admit more patients, can these patients be transferred, as has been traditionally done, to the closest available facility (most often Rogue Valley Medical Center), or will they be transferred to a Sutter facility at a much further distance in order to stay within the Sutter network of providers?  In addition, many patients are referred from our office to specialists in southern Oregon or Humboldt County.  Will the new EPO make it impossible for patients to see these usual specialists?

As of today, Redwood Medical Offices is still not on the EPO provider list.  We have made several attempts to learn the details of the EPO plan, but we continue to wait for answers from both Sutter and Anthem.  We hope these answers will be forthcoming, and that we will be able to continue to provide our many long-time patients with the excellent health care they deserve.


Kevin Caldwell, M.D.                                                        Donna Sund, D.O.
                                      Redwood Medical Offices
                                           1240 Marshall St.
                                      Crescent City, CA  95531

Highlights of Town Hall with hospital CEO Mitch Hanna

For those who missed last night's Town Hall debate with me and Sutter Coast Hospital ("SCH") CEO Mitch Hanna, this newsletter has the highlights. Although the hospital Board of Directors have still held no public meetings since they voted to downsize SCH to Critical Access and transfer hospital ownership out of Del Norte County, I appreciate Mr. Hanna's willingness to attend last night's event.  

Prior hospital articles available at
Past newsletters available at
More information available at
Summary of Opening Statement by Greg Duncan, M.D.

Sutter Health and Sutter Coast Hospital both tax-exempt charities.  Sutter Health claims to "act openly and truthfully in everything we do."  As you evaluate both sides of the Sutter Health conflict, please consider three questions:

(1) Does Sutter act openly in everything they do? 

Fact:  Despite multiple requests from our elected leaders for Sutter Coast Hospital to release its Board meeting minutes and financial documents, Sutter has refused to comply with those requests.  SCH holds closed Board meetings.  Last night, SCH CEO Mitch Hanna once again refused to release Board meeting minutes.  Mr. Hanna said he would release some financial data, adding that Critical Access designation is expected to bring Sutter an additional $5 million in Medicare payments. 

(2) Does Sutter act truthfully in everything they do?

The following statement is found in the 12/6/13 issue of "NewsPlus," written by former SCH CEO Linda Horn:  "CY [calendar year] 2008 was the last year in which the hospital generated a positive operating margin."  The Camden Group stated the same--that 2008 was the last positive year, and that "Sutter Coast is expected to operate at a loss through Fiscal Year ("FY") 2018."

Those are dire statements.  They were used to justify downsizing SCH to Critical Access. But are they true?

Fact: Sutter Regional CFO John Gates reported that SCH had positive operating margins in 2009 and 2010.  In addition, earnings for both those years exceeded $5 million for each year.

What about the prediction of losses through 2018?

Fact:  Last month, Mr. Hanna reported SCH was profitable in 2014.

Finally, here is a quote by Linda Horn in her 4/10/14 NewsPlus:  "There has been considerable concern and misinformation expressed about limiting our in-use beds to 25."  "To change our bed capacity to 25 is "right sizing" the hospital. These beds are empty every day--and have been for years."  (emphasis added)

Fact:  Hospital census data shows 62 days during the period 1/1/12-6/30/13 where the number of hospitalized patients exceeded 25.  That's 62 days where people would have been flown out, at their expense, without their family or local doctor. 

(3)  When you hear information about the hospital, does the person providing it have financial ties to Sutter?

Although I am hospital Chief of Surgery and past Chief of Staff, I have taken no money from Sutter for those positions.  Dr. Caldwell accepted no money from Sutter when he was Chief of Staff.  (Note: public records indicate Mr. Hanna's 2012 salary was $729,754.  Sutter Health CEO Pat Fry's 2012 salary was $6.4 million). 

I present this information not to embarrass Sutter executives or question Sutter Health's integrity.  I do so because LIFE and DEATH decisions for this community are being made in closed Board rooms with false information.  I have more than 50 written or recorded false statements by Sutter Health executives.

I think our community deserves better. 

Highlights of Statements by Mitch Hanna, Sutter Coast Hospital CEO

  • 800 patients were transferred out of Sutter Coast Hospital in 2014 (note: 271 patients were transferred from Sutter Coast to other hospitals in 2006.  If nursing home transfers are included, a total of 368 patients were transferred out of SCH in 2006)
  • Due to the increase in the hospital census, Sutter is re-thinking its decision to implement Critical Access and is holding up the transition
  • When an audience member asked if the Critical Access application had been withdrawn, Mr. Hanna responded, "No."
  • The reason local independent doctors have not received contracts to participate in the Sutter Health/Anthem/CalPERS EPO is because Anthem, not Sutter is in charge of the contracts  (note: this contrasts with an email from Anthem senior consultant Mark Johnson stating, "Sutter is taking the lead on additional Del Norte County physicians" and "Sutter is entirely in charge of these discussions." 
  • Mr. Hanna confirmed earlier statements that SCH was profitable in 2014 (note: this is without Critical Access designation or transferring hospital ownership out of the county)
How You Can Help

If you believe healthcare decisions should be based on factual information in open meetings, please join our effort.

To add your name to the more than 4,000 residents who have signed the petition opposing Sutter's corporate plans, stop by my office on 1200 Marshall St.  Forward this information to your friends and post on social media.  Volunteers are needed to distribute newsletters to residents without internet access.

Most of all, please consider writing a letter to the California Attorney General, asking for an investigation of Sutter Health's activities in our region.  Our County Board of Supervisors, Del Norte Healthcare District, and City Council of Crescent City have already asked Kamala Harris to investigate Sutter.  Please consider repeating that request in a letter, asking the Attorney General to exercise her authority to open up Sutter's closed books and investigate Sutter's conflicting statements.

Please contact me if you would like to see more facts or have any ideas to share.

Here is the contact information for the California Attorney General:

The Honorable Kamala Harris
California Attorney General
Office of the Attorney General
1300 "I" Street
Sacramento, CA 95814-2919

Nathan Barankin, Esq.
Chief Deputy Attorney General 
Office of the Attorney General
1300 "I" Street
Sacramento, CA 95814-2919