FACT CHECK: SUTTER HEALTH’S CLAIMS ON REGIONALIZATION TAKEOVER

FACT CHECK:  SUTTER HEALTH’S CLAIMS ON REGIONALIZATION TAKEOVER                                                   OF SUTTER COAST HOSPITAL

Background: On November 3, 2011, the Sutter Coast Hospital Board of Directors voted to turn over control of Sutter Coast Hospital to Sutter Health and its Sutter West Bay Hospitals Board of Directors, a process called “Regionalization.”

Sutter Claim:  “The local community, healthcare workers, and Del Norte Healthcare District were included in the decision to Regionalize.” (source: Eugene Suksi, CEO of Sutter Coast Hospital)

            FACT: The Sutter Coast Hospital Board, appointed by Sutter Health, and against the objection of Chief of Staff Kevin Caldwell, decided to exclude all of the interested parties in the discussion, information, and decision-making sessions prior to the vote to Regionalize. (source: Kevin Caldwell, M.D.)  Sutter Coast’s Board did not seek the advice of Medical Staff, Sutter Coast employees, Healthcare District Board members, or the community at large.

Sutter Claim: Sutter Coast Hospital is not guaranteed any seats on the Regional Board, which will take over control of our hospital, because Sutter’s rules forbid any such guarantee. Mr. Suksi stated to the Del Norte County Board of Supervisors on 2/28/2012, “I want to remind you that no affiliate is given any particular guarantee.”

            FACT:  In Sonoma County, prior to their decision to Regionalize Sutter Medical Center of Santa Rosa, six Regional Board seats were guaranteed. The Sonoma County Board of Supervisors’ report states “The West Bay Regional Board will include 6 members who are residents of Sonoma County.” (source: County of Sonoma Agenda Item Summary Report, 9/29/2009)

Sutter Claim: When questioned about local representation on the Regional Board, Mr. Suksi stated, “it starts from the Community Advisory Board, and then you kind of poll and nominate.” (source: E. Suksi, presentation 2/28/2012)

            FACT: Mr. Suksi failed to mention that Regional Bylaws state “Directors shall be appointed by the General Member” (the General Member is Sutter Health). (source: Regional Bylaws, Section 5-1, H.) “Any appointed member may be removed from the Board by the General Member without cause.” (section 5-1, I.) So, Regional Board Representation is entirely at the pleasure of Sutter Health.

Sutter Claim: “Sutter has always put more resources into (Sutter) Coast than they’ve drawn out.” (source: E. Suksi, Del Norte Triplicate, 2/29/2012)

            FACT:  For 26 years, Sutter Coast Hospital has been profitable, despite an annual management fee of $750,000 paid to Sutter Health. 2010 profits at Sutter Coast were $5.2 million. An additional $5.8 million was reported as “inter-company transfers” to Sutter Health.  Sutter Coast has never been subsidized by Sutter Health. (source: California Office of Statewide Health Planning and Development)

Sutter Claim: “Decisions regarding the affiliates’ medical staff including medical staff privileging will remain at the affiliate level.” (source: E. Suksi, presentation 2/28/2012)

            FACT:  Sutter Health has violated Sutter Coast Hospital physician bylaws by introducing patient care policies without physician review or consent (source: Kevin Caldwell, M.D.)  Under Regionalization, the Regional Board would have authority to “make decisions regarding all clinical policies and procedures.” (source: Bylaws of Sutter West Bay Hospitals, section 8-5, B2) 

            Sutter Administration has also misrepresented the credentials of a physician for appointment at Sutter Coast. This physician’s credentials did not meet Sutter Coast Medical Staff requirements, and the appointment was blocked by local physicians. Regionalization gives Sutter Health broad control over our Medical Staff appointments. Regional Bylaws state that the Regional Board can “review, evaluate, and make decisions relative to all applications for appointment or reappointment” (of medical staff).  (source: Bylaws section 8-6, B5)

Sutter Claim: “Prior to our November 2011 vote, the Sutter Coast Board contacted the Administrative and Advisory Board Leadership at Sutter Lakeside Hospital, a similarly sized Sutter affiliate located in Lakeport, California, to discuss their experiences with Regionalization. The Lakeside leaders stated that outcomes had been favorable without the loss of local input.” (source: E. Suksi, presentation 2/28/2012)

            FACT:  Since Regionalization of Sutter Lakeside, 50 percent of the employees, or 300 people, have been laid off.  As recently as 3/30/2012, Sutter Lakeside announced a ten percent across the board staff cut. Their CEO said every individual at the hospital will feel the impact—from those losing their jobs to those who have to pick up extra responsibility due to the staff cuts. (source: Lake County News, 3/30/2012)  This is despite the fact that Sutter Lakeside had the highest Medicare revenue of any Critical Access Hospital in the nation for fiscal year 2009-10. (source: Billian’s Health Data, 11/9/2010)

            Some history on this crisis: In 2008, Sutter converted Lakeside Hospital from a 69 bed general hospital into a 25 bed Critical Access Hospital, claiming in a news release that this “will preserve the over 600 high quality jobs SLH provides in our community.” According to Lakeside staff, it was the first hospital in the nation to deliberately shrink to fit Critical Access status. “It (Critical Access) was originally designed for hospitals that had an average daily census of 12 or less.” (source: E. Suksi, presentation 2/28/2012)

            When the change to Critical Access Hospital was announced, Lakeport Fire Captain Bob Ray complained, “I’m unhappy that they’re being less than open about this.” Ray, a paramedic, stated that the reduction from 69 to 25 acute care beds could result in a “huge” impact for Lake County, because it was already not uncommon to have too few beds, and “my biggest thing is, we’ve been kept in the dark.” (source: Lake County News, 2/24/2008)

            Four months after Critical Access designation, the hospital CEO left to start a new job at parent network Sutter Health.  (Source:  Lake County Record-Bee, 7/24/2008) 

            In addition to the bed restriction, Critical Access Hospitals limits average patient stays to no more than 4 days. (Source: U.S. Health Resources and Services Administration)  Mr. Suksi, discussing the option of Critical Access status for Sutter Coast, stated “it isn’t determined that it makes sense for Sutter Coast. But we’ll look at it.” (source: E. Suksi, presentation 2/28/2012)

Sutter Claim: “And yes there is an initiative for us to take a look at our rates and make our rates more affordable for consumers because consumers are going to have to pay more of the freight.”

(source: E. Suksi, presentation 2/28/2012)

            FACT: Sutter Coast’s charges have always been much higher than those at surrounding facilities.  Sutter Coast charges over $3300 for a knee MRI scan, which is 3 times the cost of the same test in Medford, Oregon.

Sutter Claim: “It is certain that the Region exists to support the affiliates.” (source: E. Suksi, presentation 2/28/2012)

            FACT: On June 30, 2010, the Marin Healthcare District took back control of Marin General Hospital from Sutter Health, after cancelling Sutter’s management contract. Marin Healthcare District then sued Sutter Health, claiming that Sutter improperly transferred $180 million from Marin General to Sutter Health, between 1995 and 2010. (source: Marin Independent Journal, 1/17/2012) An analysis by the Marin Independent Journal determined that Sutter Health withdrew $74.6 million from Marin General, while contributing only $5.3 million, from 1995 to 2007. (source: Marin Independent Journal, 7/18/2008)

            Marin General Hospital now plans to build a new hospital. In June 2010, Sutter Health’s Regional President Martin Brotman, M.D. said “In 2005, provided our lease was extended to 50 years, Sutter offered to build a new $400 million hospital for Marin—at no cost to taxpayers or the Healthcare District.” (source: Marin Magazine, June 2010)  However, Healthcare District CEO Lee Domanico stated Sutter never offered to spend any of its own money to rebuild the hospital. Instead, Domanico said Sutter offered to “support Marin General Hospital spending (Marin’s) own $300 million to rebuild its hospital, and at completion the hospital would be owned by Sutter.” (source: Marin Independent Journal, 5/14/2010)

Sutter Claim: “If an affiliate is not plugged into a Region, support services cannot be efficiently obtained, and cost effectively, and some may not be able to be obtained at all.” (Source: E. Suksi, presentation 2/28/2012)

            FACT:  The supply chain for Regionalization has already been in place for 18 months, without Regionalization. (source: E. Suksi) Local jobs have already been lost due to Regionalized billing.

Sutter Claim: “Health care is local.  Success depends on honesty, integrity, and transparency.” (source:  Martin Brotman, Sutter Health Regional President.)

            FACT: Sutter Health violated the Bylaws of Sutter Coast Hospital by extending the term of Board Chairman Andy Ringgold past his 9 year limit. His term was extended in order to implement Regionalization without a change in leadership. (source: Bylaws of Sutter Coast Hospital, Section 5-1, H)

Final Question: Do we trust these people with our community hospital?