Monday, October 26, 2015

Headline Article Debunks Sutter's Prior "Gloom and Doom" Forecast

October 18, 2015 
In This Issue
Headline Article Debunks Sutter's Prior "Gloom and Doom" Forecast

For those who missed the 10/1/15 headline article in The Del Norte Triplicate, and were unable to attend yesterday's Town Hall meeting, here is "the rest of the story" on Sutter's financial claims  . . . . 

Background:  In late 2013, Sutter executives told us that downsizing Sutter Coast Hospital to Critical Access status was necessary to stem Sutter Coast's financial losses. Former hospital CEO Linda Horn publicly announced the hospital had not had a positive operating margin since 2008. (Ms. Horn's statement is contradicted by Sutter's own data, which shows operating income of $7 million for years 2009 plus 2010.)

The Camden Group (a consulting firm paid by Sutter) and Linda Horn both projected heavy losses at Sutter Coast through 2018. Those dire predictions were used to justify removing half of the hospital's beds from service, which hospital officials conceded would necessitate an increase in mandatory patient transfers (due to the 25 acute care bed cap imposed by Critical Access).  But in the face of the projected losses, Critical Access would allow Sutter Coast to triple its payments from Medicare. (source: Linda Horn, NewsPlus," 1/17/14.)  Thus, the downsizing was portrayed as a necessary trade off in the face of predictions of steep losses ahead.
Fast forward to 2014:  The Del Norte Triplicate's headline article 10/1/15 reported Sutter Coast Hospital's profits were $10.8 million in 2014, and according to Sutter Coast CEO Mitch Hanna, expected to be roughly $11.9 million in 2015 (without Critical Access). (source:

Sutter's gloomy 2013 forecasts turned into huge profits the next year. These profits are not surprising--Sutter Health is nationally renowned for its high prices and profiteering--see the following New York Times article, which discusses Sutter Health:

Critical Access news for 2015:  The Sutter Coast Board of Directors, noting an influx of patients seeking treatment, voted to hold off converting Sutter Coast to Critical Access, but hospital officials "declined to share the census numbers for 2015 that prompted reconsideration of the Critical Access application." (source:

Hospital CEO Mitch Hanna later confirmed Sutter Coast's Critical Access application has not been withdrawn, so the hospital Board keeps open the option of Critical Access at Sutter Coast, behind the veil of secrecy of Sutter Coast's closed Board room.  

Why Is This Important to You?  Because if Sutter Coast downsizes to Critical Access, there will be 50% fewer available beds, more mandatory emergency patient transfers, plus, higher out of pocket costs and higher secondary insurance premiums for Medicare patients. (sources: Office of Inspector General Report Oct., 2014, and Kaiser Health News, 10/7/14)

How you can help address Sutter's high prices, conflicting statements, and closed Board rooms:

1. Write The Del Norte Triplicate, letters to the editor, 312 H. St., Crescent City, CA 95531, or by email at   Be sure to include your phone number, which is not published.

2. Contact me at if you would like more information, or if you have any information on hospital charges or patient transfers.

3. Join the 4,000 others who have signed the petition at my office, opposing Sutter's plans to move ownership of Sutter Coast Hospital out of our county.

4. Please read the editorial below, published 10/15/15 in The Del Norte Triplicate, also available at this link:

Thank you all for your continued support,
Gregory J. Duncan, M.D.
Diplomate, American Board of Orthopedic Surgery
Sutter's Profiteers Cause for Dismissal
By Curtis Bower

October 15, 2015

(reprinted with permission from The Del Norte Triplicate and Curtis Boewer) 

In follow up to the excellent headline article regarding Sutter Coast Hospital's multimillion dollar profits, published Oct. 1 in the Del Norte Triplicate, please consider the following: 

Hospital finances: 

When it benefited Sutter Coast to show losses (as the hospital board attempted to convince our community that hospital downsizing was needed for financial reasons), Sutter Coast showed losses. When it benefitted Sutter Coast to show profits (as the healthcare district considers purchasing Sutter Coast through an eminent domain action), Sutter Coast shows profits. It seems Sutter can make its books show whatever Sutter wishes.

Do the hospital employee salary reductions Mr. Hanna oversaw apply to him? IRS filings show his 2013 compensation was $645,399, plus other income described as "deferred in prior form 990." Was Mr. Hanna's salary reduced in 2014? Hopefully, he will fulfill his promise made earlier this year to return to a town hall meeting and discuss hospital finances.

Hospital utilization:

Mr. Hanna repeats the claims of the last two CEOs - the number of patients using Sutter Coast is declining. Let's think about reasons why fewer people would be going to Sutter Hospital. Could it be the hospital's reputation, its high charges for care or the fact that in the past two years a Sutter surgeon general, a Sutter orthopedic surgeon and a Sutter family practice doctor have left our area to work elsewhere? Dr. Duncan and Dr. Davis offer surgery at Mad River Hospital, where charges to patients are much lower. It seems Sutter administrators are responsible for the fact fewer patients are choosing to receive care locally.

Hospital profits:

Our community should know that the profits taken in by Sutter Coast are transferred every two weeks to Sutter Health in Sacramento, where Sutter executives decide where to spend the money. This may explain why Sutter Health CEO Pat Fry saw his own salary increase from $2.4 million in 2007 to $6.4 million in 2012. I prefer those profits stay locally - for more staff and better wages for the hard working employees at Sutter Coast.

Finally, I ask two questions: 

Is Sutter Health trustworthy?

Which is a higher priority for Sutter Health executives - our health care or their salaries?

As a former hospital administrator, I support the Del Norte Healthcare District's effort to expand and improve local health care.

Curtis Boewer

Curtis Boewer of Crescent City, is a consultant, former administrator of Good Samaritan Foundation, vice president of Good Samaritan Hospital, both in San Jose, and a former administrator of Marion Medical Center in Santa Maria.

Gregory J. Duncan, M.D. | | | 1200 Marshall St.
Crescent City, CA 95531