Sutter Health's conduct in Crescent City is key to understanding how it created a healthcare monopoly in northern California
Last
month, after offering to work with Sutter Coast Hospital to provide
quality, affordable healthcare, Dr. Kevin Caldwell and I met with the
hospital Board of Directors.
The
meeting was positive. When I asked the hospital Board who they
represent--Sutter Health or our community--several Board members stated
they represent the community. The Sutter Health executives on the
Board--hospital CEO Mitch Hanna and regional CEO Grant Davies--did not
answer the question.
The
question of representation is key to understanding the conflict which
Sutter Health brought to our community, and to the creation of Sutter's
monopoly. What is good for Sutter Health is not always good for
communities. A brief history:
In 2011, behind closed doors, Sutter Health tried to take ownership of Sutter Coast Hospital. Is transferring hospital ownership to Sutter Health good for our community?
In
2013, in an effort to collect more fees from Medicare patients, Sutter
Health tried to downsize Sutter Coast into a Critical Access facility. Are higher fees and fewer beds good for our community?
Sutter
Health claimed transfer of ownership and Critical Access were a
financial necessity. One Sutter executive threatened to close the
hospital if Sutter's plans were not enacted (I still have the audio
recording and meeting record). But after Sutter Coast posted millions in
profits, without transfer of ownership or Critical Access, Sutter's dire financial claims were proven false.
Dr.
Caldwell and I asked the hospital Board to reassure the community that
transfer of ownership and Critical Access are off the table.
Now for the unexpected guests at our recent meeting:
After
the introductions of everyone present. I noticed a speaker phone in
front of my chair, but no one had announced their presence. I asked if
anyone was on the line. To my surprise, two attorneys from Sutter Health were listening in.
I
asked the Sutter Health attorneys who they represented--Sutter Health
or Sutter Coast Hospital. The attorneys declined to answer, stating it
was Sutter Health policy to not disclose the nature of their legal
representation to private parties. But Dr. Caldwell and I are not
"private parties." We are members of a California Special District,
elected to represent our constituents, attending the meeting in an
official capacity.
I
believe the Sutter attorneys did not want to discuss their legal
representation because Sutter Health's attorneys played an important
role in the creation of their healthcare monopoly.
Normally,
one attorney does not advise two parties during a change of property
ownership. Nevertheless, during Sutter Health's statewide hospital
merger known as "Regionalization," Sutter Health attorneys advised
hospital Boards to transfer hospital ownership to Sutter Health. Sutter
Coast Hospital (a separate corporation from Sutter Health) did not have
its own independent lawyer. Without their own attorney, how could a community Board make an informed decision about hospital ownership?
In
2012, I was a Board member of Sutter Coast Hospital. At that time, a
Sutter Health attorney confirmed he represented Sutter Health--not
Sutter Coast Hospital. I was troubled by the fact that Sutter Health
was using its executives and attorneys to convince the Sutter Coast
Board to dissolve itself and transfer hospital ownership to Sutter
Health's regional corporation. I thought Sutter Coast should have its
own attorney, as described in the hospital bylaws. Nevertheless, Sutter
Health was using its salaried attorney-executive to transfer ownership
of Sutter Coast to Sutter Health.
It
appears Sutter Health used its own attorneys to transfer ownership and
control of its statewide affiliated hospitals to Sutter Health's
regional corporations. Sutter Health's merger coincided with higher
prices to consumers and vast increases in executive pay. Are higher prices and higher executive pay good for communities?
Today,
thanks to thousands of local residents who opposed Sutter's
Regionalization plan, Sutter Coast remains the only locally owned and
governed hospital in the Sutter Health system.
Feel free to forward this letter to interested parties, and post on social media. We will keep you up to date with future newsletters, and please visit our website at delnortehealthcare.org.
Sincerely,
Gregory J. Duncan, M.D.
Chair, Del Norte Healthcare District