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August, 2004

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

Grand Jury Examines MGH

On June 4, the Marin County Grand Jury issues its report: "Marin General Hospital: Moving Beyond the Impasse." Its 16 pages are crammed with information, observations and ideas for improving what in the end is patient care. The report is thoughtful and meaningful for those of us in the Marin Healthcare District (all of Marin except Novato). Previous Grand Juries issued reports but I recall none this comprehensive.


Many Marin residents are unaware that MGH belongs to the public as do school districts, for example. District taxpayers paid for the hospital opened in 1952 on donated land. An east wing was added and more recently a west wing. The west wing is known to be seismically safe by current standards. Most of the inpatients are in that wing. The hospital additions were financed with revenue bonds. Since hospital bond revenue is not taxable, interest costs are acceptable.

For years MGH has been self-sustaining and profitable. In fact, it is a cash cow for its current operator, Sutter Health, the Sacramento-based hospital chain. Sutter acquired a 1985 hospital ease in 1996. The hospital is scheduled to return to community control in 2015 when the lease expires.

The 1985 MGH Lease

In 1985 the hospital attorney, Quentin Cook, and its CEO, Henry J. Buhrmann, presented a 30 year lease to the five elected directors who signed without dissent. A shell corporation was formed with the hospital attorney and CEO assuming similar positions in the privatized hospital. Late 1985 millions of dollars of public assets were transferred to the new corporation which began operation behind closed doors. It still lacks transparency.

The public did not know. There were poorly-publicized meetings, inadequately covered by the local press. Dissenters were hardly noticed. I read the lease and wonder how anyone could sign it but one of the signers, Dr. Peter Eisenberg, was wildly enthusiastic about it for years. In contract Gary Giacomini, then a county supervisor, called it "the biggest theft of public property in Marin's history."

Beyond 1985

The privatized MGH "affiliated" with California Healthcare Systems in San Francisco in 1986. Millions of dollars of patient revenue made one-way trips across the Golden Gate Bridge. The one-way money flow changed direction in 1996 when the San Francisco operation and MGH merged into Sutter Health. Quentin Cook, then CHS president, became a Sutter vice-president.

The elected district board was dominated by management sycophants. Early 1996, at the behest of Buhrmann, MGH joined Sutter's "obligated group." It took the votes of three directors: Dr. Larry Bedard, Valerie Bergmann and Suzanna Coxhead. Bedard and Bergmann are history but Coxhead remains at the only Sutter sycophant on the elected board. What are the obligations? Any time there is more money in the hospital bank account(s) than needed for 14 days operation, Sutter has the right to sweep. This is known as "excess cash transfer." What I consider more dangerous is that MGH became on of the guarantors of Sutter's massive aggregate debt.

MGH Since the 1996 Election

November 1996 the renaissance began. Sylvia Siegel, a nationally recognized consumer advocate, was elected to the board and swept Linda Remy into office with her. What with Dr. Diana Parnell already on the board, for the first time ever the board could be called consumer-oriented. The current board has four strong consumer advocates and Suzanna Coxhead.

The Healthcare Board in 1997 made an attempt to return the hospital to community control. The basis of a lawsuit heard in Sacramento Superior Court was that Buhrmann and Cook violated California Government Code, Section 1090, which prohibits public employees from making contracts to benefit themselves. The Sacramento judge ruled that the four years statute of limitations had been exceeded. She made no ruling on the merits of the case. The California Supreme Court concurred. By case law the judge could have considered the case because there is traditionally no time limit when public property is involved.

MGH in 2004

From the health consumer standpoint the public has the best elected board since I began following it in 1974. However, it is basically powerless because the 1985 lease takes most responsibility from the board. The Grand Jury report finds the District Board "weak and ineffectual." This is correct and it could be remedied by a lease that restores oversight to the directors. It will take either a consumer-friendly lease or 2015 when Sutter is scheduled to depart to alter the role of the District Board, sorry to say. The board is inadequately funded which makes matters worse. When a consultant is needed, for example, there are no funds available.

"MGH Corporation/Sutter is arrogant and uncooperative." I would not challenge that assertion about an entity that operates secretly. More transparency would be welcome. Elected board requests for information could well be handled in a more timely manner. The Grand Jury and I share these opinions.

The Grand Jury was concerned about disruptive behavior at Healthcare Board meetings. This is easily resolved by the chair. For example, when Director Dr. John Severinghouse took over the June meeting, it went smoothly. The June meeting was not raucous. None need be. Of all areas covered by the Grand Jury, this is most easily resolved by an appropriate chairperson. Sometimes the misbehavior at board meetings is from Sutter. MGH and Novato Community Hospital CEO, the volatile Margaret Sabin, once called Dr. William Rothman a "fool." That stopped the meeting for five minutes.

The Grand Jury was dead wrong that public comments should be limited to two minutes. The current three minutes often are not enough.

What Lies Ahead

MGH quality of care issues never seem to end. An 80 page Federal Government investigation reported in the Marin Independent Journal April 11 described more than 50 separate patient-endangering deficiencies. Sutter spends a fortune on display ads and mailings, money that could be diverted to patient care.

Above all, Sutter is a bottom line business. Expect no services at MGH that are not profitable for Sutter. For example, in 1999 when Ross Hospital closed, Marin County psychiatric beds dropped from 59 to 17. What with 42 fewer beds, children and adolescents requiring inpatient care must be sent to another county with available beds. Treatment of an adolescent with acute psychosis, such as a schizophrenic break or from drugs, becomes enormously difficult. MGH had 17 adult psychiatric beds in 1999 and not one bed more in 2004.

Sutter's primary interest if not MGH, it's Sutter. Endoscopy (e.g. colonoscopy) is a lucrative part of hospital outpatient service. Sutter is involved in a joint venture with local endoscopists on South Eliseo. Sutter, not MGH, is the beneficiary. Medi-Cal endoscopy remains at MGH. Dismembering a hospital does not strengthen it.

Sutter is campaigning to extend the 1985 lease beyond 2015 and offers to build a new wing if Sutter gets its way. What Sutter does not tell you is that the revenue to pay for the new wing will come from MGH patients. MGH can be seismically upgraded with onoing revenue. A new wing would be nice but is not mandatory. A new wing can be financed with revenue bonds floated by the Hospital District. Sutter could have both a new wing and not the financing responsibility. Sutter then could be gone by 2015. Mercifully!




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