Marin General And Sutter To Part Ways?
By Karen Nakamura
Sutter Health wants to build a new hospital to replace Marin General. That's at a time when the gigantic health corporation is under decertification review from federal and state Medicare/medical hospital boards for numerous medical violations at MGH and other facilities across the state. Its present lease with the Marin County Hospital District Board has had vocal opponents for years.
The public board, which owns the hospital and leases it to Sutter Healthcare, met on Friday night, Jan. 29, and agreed to explore with Sutter a number of options to make the hospital safe in an earthquake.
But problems will persist for Sutter after failing three reviews in a year. Instead of snapping to like most health care providers and cleaning up the mess until it sparkled, Sutter's public response to the siege is to go on the offensive and demand lease extensions from the District for up to 50 years. Without those extensions Sutter has said it will not build a new facility and threatens instead to build a new facility elsewhere in Marin thus going into competition with Marin General. To paraphrase Dr. Frank Tavel, chairman of the Sutter Marin General Hospital Corporation Board, Marin can only support one hospital besides Kaiser and Novato Community.
"It sounds like blackmail to me," the always adroit public-advocate Dr. William Rothman responded. "But who in their right mind would go to Sutter's hospital with its terrible record of patient care when they have a hospital they've gone to and trusted for decades?"
The truth is Marin General is in need of serious seismic repair that must be completed by 2008. However, many similarly burdened hospitals in California are opting for an extension to 2013, even though it may mean a commitment to building a new facility.
The question facing the district is should the hospital be demolished and a new one built or should it be retrofitted at a much lower cost. While the new west wing is built to 2030 seismic standards and doesn't need replacement, the central and east wings were built in 1952 and 1961 respectively and don't pass current earthquake standards. The cost for replacement is $300 million while a retrofit would be approximately $100 million. Either decision has far reaching implications.
The bugaboo for many comes with Sutter Health. The district needs the input of Sutter because it holds a lease until 2015 and construction, just as with a private residence, requires permission from the tenant. Sutter indicated it wanted to present its own plan and the district agreed to hear it. That was two years ago. With time slipping by rapidly, the district presented its own plan about eight months ago.
It stated that the district would float the bonds necessary to renovate the facilities with Sutter making the yearly payments on those bonds. These dividend funds come from the hospital's profits. Sutter complained about being liable for full payment when its lease only runs until 2015. The district revised its proposal to have Sutter liable only until the end of its lease.
Sutter finally presented its plan at the end of the year. It would float the bonds for the new hospital but only it its leases were extended 30 years for the older facilities and 50 for the newer building. If those leases are not granted, Sutter will find another place in Marin to build.
There are valid points to Sutter's proposal. For example, it would take on the obligations of the bonds. The problem here, according to Dr. Rothman, is that Sutter would gain more control over the hospital while Marin would lose. With medical violations an issue, Sutter Health could become an albatross around the county's neck. He also points out that while the retrofit would cost $100 million, rebuilding would cost $300 million. "Remember the cost of paying those yearly bond dividends have to be found from the profits of the hospital."
While state and federal funds are drying up and the possibility of medi-care and medical being denied, it would seem foolish to take on an extra $200 million more than necessary. "Except for the retrofitting," Dr. Rothman continued, "nothing that's wrong with MGH has to do with the building. If Sutter has to pay hefty fees on the bonds, that means its going to have to cut somewhere and that means staff and patient services. And that is exactly where the over 300 violations mostly took place. If the retrofit goes through then that means there would be enough money to hire more nurses and clean up the deficiencies."
Further developments in Sutter Health's non-compliance with federal and state medical standards at Marin General Hospital and its fight with the Marin County Hospital District Board.
On January 21, the Center for Medicare and Medicaid Services removed its threat to cut funding to Marin General Hospital, an amount equal to approximately 50% of the hospitals revenues. MGH has complied with "all conditions of participation." However, CMMS still has concerns about long standing medical problems and gave Sutter until February 1 to reveal how it intends to correct these deficiencies. The hospital will then be re-inspected.
In the meantime, on January 18, the Marin District Hospital Board announced that it refused Sutter's proposal to take on rebuilding costs in exchange for an extended lease. Rather, the District insisted no connection be made between Sutter's leases and any reconstruction financing. It will handle financing any bonds and any leasing adjustments will be discussed at a further date. One reason might be the $200 million extra in costs the Sutter plan advocates. However, the District did say it was open to talking with Sutter management and listening to any suggestions.