The Coastal Post - October 1999

Background Of The Marin Healthcare District Lawsuit

By Norman Carrigg, MD

In 1985, with most Marin residents unaware what was happening, the five elected directors of what is now known as the Marin Healthcare District voted to "lease" the hospital to a shell corporation known as the Marin General Hospital Corporation. The two principals, Henry J. Buhrmann and Quentin Cook were at that time public employees of MGH. Buhrmann, the hospital CEO, and Cook, the hospital lawyer, assumed the same roles in the privatized hospital which immediately acquired millions of dollars of cash and cash equivalents as well as other assets. It so happens that California Government code, Section 1090, prohibits public employees from making contracts to benefit themselves.

The hospital was paid for by the residents of the Healthcare District (all of Marin except Novato). It was meant to serve Marin residents and not eventually to become a cash cow for a hospital chain. Four of the five 1999 elected district directors favor returning the hospital back to community control.

I attended many of the 1985 educational lectures by Buhrmann and Cook. One of the pitches was that the hospital had to operate behind closed doors "for competitive reasons." Once privatized, MGH operated and still operates behind closed doors.

MGH operates as a non-profit. However, the Buhrmann-Cook lease is so loose that monies may be siphoned out of MGH for whatever reason or use the privatized hospital chooses. Since privatization that has happened in spades.

In 1986, MGH joined California Healthcare System, San Francisco. Millions of dollars made one-way trips across the Golden Gate Bridge. Then a decade later, CHS merged into Sutter Health of Sacramento. The siphoning continues but to Sacramento. MGH pays a $2 million annual "affiliation fee" to Sutter and as a full affiliate Sutter can sweep out of the hospital till funds in excess of enough to meet operating expenses for 14 days. Sutter decides!

During September, in Sacramento the lawsuit by the current elected district board will be heard. In an initial, temporary ruling, a superior court judge dismissed the claim that the 1985 lease was illegal based on statue of limitations rules. The claim has merit, but it supposedly was made late. However, when public property is involved there is no statue of limitations based on case law, a conclusion that the First District Court of Appeals is certain to make when the matter is heard by the judicial body in the near future.

If the lease is voided, the problem of trauma care will shortly be resolved. The four board members who support the lawsuit also will press for a Level II trauma center.

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