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December, 2007



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Feisty Marin General Will Make It On Its Own
By Karen Nakamura

Between 2009 and 2010, the Marin Healthcare District will regain control of Marin General Hospital from the private nonprofit Sutter Health. Despite Sutter's dire predictions that MGH can't survive without it, experience is showing the feisty hospital should be able to make it on its own.
Representatives from public hospitals in the Bay Area gave the District Board the good news at a forum on October 24 held at the College of Marin. The head of the Association of California District Hospitals, Ralph Ferguson, said almost all large urban/suburban hospitals are operating in the black and that it's entirely possible to operate a local hospital and make "money in today's world." Hospital executives in Mountain View and Alameda echoed that view.

Of the 73 healthcare districts in the state, local district boards operate 44. El Camino Hospital in Mountain View is one example. In 2006, it reported a net income of $33 million and has won numerous awards for excellence in the last five years including being named #1 in California for cardiology services and in the top 5% nationally.

Like MGH, it has a publicly elected district board. The difference is it has controlled the hospital since 1996. For the four years before 1996, it was run as a private nonprofit. During that period, the hospital's quality of care came under increasing criticism and the financial picture was bleak, mirroring MGH's experience with Sutter Health.

Similarly, from 1952 through 1995, during which time the Marin Healthcare District managed MGH, it was never cited for any safety or quality of care violations. Since Sutter's arrival in 1996, State and Federal investigators identified hundreds health and safety violations and Sutter/MGH spent two years fighting to retain its Medicare accreditation. Now that the stewardship is returning to MHD after a

long and bitter fight, sincere elements within the district board may be moving in different directions in their concern. Happily, the State's statement that earthquake-retrofitting requirements should be postponed until 2030 rather than 2013 has resolved some fracturing.

Dr. Larry Bedard, the current director of the MHDB, originally expressed a desire to lease or sell MGH much to the dismay of other directors and a public fearful of another corporate takeover. However, the Marin Independent Journal reported in August that none of the large hospital conglomerates, such as Kaiser Permanente, the UCSF Medical Center and Adventist Health System, wanted to lease or buy the facility.

As reported by the Marin IJ, Bedard feared Marin General could end up as "a de facto county hospital taking care of indigents, Medi-Cal patients and psychiatric services. The well-paying patients - the high-end oncology and cardiology - are going to migrate to Sutter."

The problem of specialty and stand-alone surgery centers, called private boutique hospitals, loams prominently. As Gary Hicks of GL Hicks Financial Association of California Healthcare Districts says, "Siphoning off private pay patients, leaving the primary hospital to treat the injured, elderly, poor and uninsured… creates a two-tiered healthcare system and financially cripples a District hospital by taking the best-insured patients out of the system. Privately operated boutique and specialty hospitals are contrary to the mission of Districts, which is to promote the health and welfare of ALL residents. Risks associated with …boutique hospitals …strike at the very heart of quality healthcare. When a loved one suffers [an emergency], she would be taken to the trauma center at MGH, not to a boutique hospital. Therefore, it is in the best interest of all District residents, including Kaiser members, to ensure that MGH is an excellent hospital."

Board member, Jennifer Rienks, addressing a public and medical staff worried that non-professionals on the district board might micro-manage the hospital; "I'll make it very clear. This district board is not going to run the hospital. We're not going to be in charge of day-to-day operations. There will be a separate board, a big firewall. We want the hospital professionally managed. No one wants it plagued by politics."

She was referring to the Alliance to Save Our Hospital, which has been vociferous in charging another faction, Friends of Marin Healthcare District, has created a contentious political atmosphere disruptive to a smooth running board. However, supporters say it was that political skirmishing that got Sutter out and MGH returned to local control.

FMHD's website says: "As an independent hospital, revenue generated from MGH will be reinvested in the hospital, meeting healthcare needs instead of lining the pockets of a corporate hospital chain."

This will be needed. The retrofitting of Marin General is estimated from $400-$530 million, looms large and constitutes a main reason hospital conglomerates opted out. In November, however, strong signs from the state indicated it would extend the retrofitting deadline from 2013 to 2030. This gives the Board 22 years. The California Nurses Association is against the extension because of safety fears. Obviously, retrofitting issues need to be addressed.

The consultant firm, Kurt Salmon Associates, hired by the MHDB, advised that a transitional board be created to smooth the transfer from Sutter to MHDB. It also found MGH can survive alone if the medical staff is retained. Gary Hicks of GL Hicks Financial Association of California Healthcare Districts explained MGH is one of the largest employers in Marin. If another hospital besides Kaiser Permanente and Novato/Sutter Hospital were opened, "the siphoning of physicians, staff, patients, and money will debilitate the District. Our community needs to ensure that other entities are limited locally and that the District recovers its critical assets, including buildings, land, equipment, and specialized services."

A former member of the board Dr. William Rothman, perhaps the most vocal of the so-called politicos (others call him a hero) and a fervent backer of local control said in an interview with the CP that this "siphoning off" of staff is not that great a problem.

"There's really no place for them to go if they want to stay in Marin. Kaiser has a full staff and so does Sutter. Doctors aren't stupid. To move north means they'll lose their central and southern Marin patients. Despite its bluster, the reality is that while Sutter/Novato wants to expand their Novato center to 100 beds, it only has 47 beds with a daily average of between 20-30 patients. To double the number of beds doesn't make sense."

When asked, "Would doctors and nurses want to leave MGH for Sutter with its patient care violations and questionable financial practices?" He answered, "Look what's going on at El Camino in Mountain View. It's developed into one of the top hospitals in the nation since the district took control. With the earthquake retrofitting issue off the table and Sutter Health not skimming the cream off the top, there'll be the income to run a top-notch facility. That's what everyone wants."

In November, The MHDB unanimously approved a transitional Board of Directors to oversee day-to-day operations when Sutter Health departs. How it will be formed and who will sit on the board has to be decided.

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