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September, 2002

Marin General Hospital Update
By Norman Carrigg, M.D.

Although Marin General Hospital was built for and paid for by the residents of the Marin Healthcare District (all of Marin except Novato), many residents still have the notion that it's their local hospital. It was, in fact, until it was quietly privatized in 1985.

Although five 1985 elected district directors approved leasing the hospital to a shell corporation for 30 years, there always has been dissent. However, until November 1996, the majority of the elected directors was pro-management and showed less than adequate concern for patient welfare. That all changed November 1996 when a nationally-recognized consumer advocate, Sylvia Siegel, was elected and swept in with her Linda Remy. What with Dr. Diana Parnell already on the board, consumer advocates outnumbered management sycophants 60% to 40%. For almost one year, the elected board attempted to work with the privatized hospital to up-grade patient care and correct lease deficiencies. Mediation didn't work.

Late October 1997, the elected board filed suit in Sacramento Superior Court to void the lease and return the hospital to community control. Their venue was chosen because Sutter Health, the Sacramento-based hospital chain, had acquired the 30 year lease early 1996. The lease was written late 1985 by the hospital attorney, Quentin Cook, and its CEO, Henry J. Buhrmann. Both men were public employees who assumed similar positions in the privatized hospital. The crux of the lawsuit is that Buhrmann and Cook allegedly violated Section 1090 of California Government Code which prohibits public employees from making contracts to benefit themselves. In a preliminary ruling, a Sacramento judge found the suit tardy. The statute of limitations has been exceeded. Not so, say Healthcare District Attorneys who point out that by case law there is no statute for public property. What happened in 1985 is not in dispute.

On August 23, at the appellate level, judges will hear oral arguments about the statute dispute. No matter the outcome, I expect that outcome will be appealed to the California Supreme Court. When MGH returns to community control, as I expect will happen eventually, Sutter Health will lose one of the most productive cash cows in its hospital herd. Expect Sutter to be tenacious in its fight to retain MGH.

Sutter talks about its "not-for-profit mission." True, as MGH and Sutter Health are structured, the hospital and Sutter Health pay no taxes. But profits can be siphoned to for-profits. Siphoning may not be ethical, but it's legal. Millions of dollars of patient revenue have been siphoned since lease inception. Some monies even made it to the Cayman Islands on one-way trips. Siphoned monies are monies unavailable for patient care.

The 1985 lease written by the lessees, not surprisingly, is lopsided. Matters became worse early 1996 when at the behest of Henry J. Buhrmann, MGH joined Sutter's "obligated group." Obligations include the right of Sutter to sweep hospital funds whenever there is more money in the till than needed for 14 days operation. Sutter decides. MGH also became one of the guarantors of Sutter's aggregate debt (well over $1 billion). It took the vote of three directors to make this possible: Dr. Larry Bedard, Valerie Bergmann and Suzanna Coxhead. Bedard and Bergmann are history. Coxhead still is a director and probably will ask to be re-elected this November. As the elected board is now constituted, four directors are strong consumer advocates.

 

 

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