City Approves Proposal for $1 Million Annual Subsidy to Save San Leandro Hospital

About 75 people stayed until 10 p.m. last night to watch the City Council vote 6-1 to approve in principal providing a $1 million annual subsidy to Alameda County Medical Center (ACMC) to assume control of San Leandro Hospital from Sutter Health. ACMC would use this subsidy to continue operating the facility as an acute care hospital with its current configuration of emergency services, inpatient medical and surgical services, and related support services for at least the next 3 years, after which it would phase in a combination “hybrid” model, whereby a reduction in the number of acute beds would allow for the state-mandated replacement of Fairmont Hospital’s acute rehabilitation services.

With the lone nay vote cast by Interim Councilmember Tom Dlugosh, appointed to the position after the resignation of Joyce Starosciak, the Council’s support will be aggregated with similar guarantees of financial support from the County, the ACMC, and the Eden Township Healthcare District (ETHD) to present to Sutter at its request later this week

Following presentations by Alex Briscoe, Director of the County’s Health Care Services Agency, ACMC Chief Executive Officer Lassiter Wright, and County Supervisor Wilma Chan, 19 public comments were made to the Council. Only one commenter had even the slightest concern about the proposal. Dave Johnson, speaking as president and chief executive officer of the San Leandro Chamber of Commerce, said they could not recommend supporting the proposal unless the Council pledged to place an appropriate funding measure (such as a parcel tax) on the ballot as soon as possible. Councilmember Souza agreed with this contingency, but the final motion voted upon did not include it.

(ETHD Director Ron Hall said that his organization’s research had determined that a $48 annual parcel tax would generate $1.25 million annually.)

“Every stand-alone facility,” said ACMC’s Wright, referring to San Leandro Hospital and other similarly-situated hospitals nationwide “is in trouble. You won’t find in a high-cost environment like health care, or a high-cost geography like northern California, and in a competitive market that single stand-alone hospitals will be able to make it on their own.” He emphasized that we needed to partner in order to reduce costs, have negotiating power with insurance companies, and operate on economies of scale.

Although Sutter still has to accept ACMC’s proposal, the health care giant did request the proposal, and Wright believes there is a good chance it would be accepted by Sutter. “I would have no interest in doing this if I thought we’d have to close [San Leandro Hospital’s] Emergency Department in just a couple years … We’re going to put 100% effort into getting this done.”

Councilmember Dlugosh exhibited little knowledge of the information made public over the past few years in the public efforts to save San Leandro Hospital. He called the statistics presented by Wright and the County’s Alex Briscoe “incomplete,” doubted the proposal’s economic feasibility, and asked “Why should Sutter just give the hospital to the ACMC?”

Despite the fact that Briscoe made a presentation on Sept. 12 to the Council’s ad-hoc committee to save San Leandro Hospital, Councilmember Souza said she was “disappointed the hospital is coming to us at the last minute, and that we have to make a decision with no chance to vet this with our residents.”

And even though Councilmembers Jim Prola and Ursula Reed said that while campaigning for re-election constituents said they want the City to keep the hospital open, and numerous residents spoke in favor of this proposal at last night’s meeting, Councilmember Souza was “disappointed that the public didn’t get to speak up on the matter.” In response, one of last night’s speakers retorted in the audience, “What am I, chopped liver?”

Defining San Leandro Hospital as a “safety net” hospital because of the vast majority of its patients being under- or un-insured, Alex Briscoe, of the county’s Health Care Services Agency, listed the multiple benefits of this proposal: (1) economic assistance to the real and significant revenue challenges faced by safety net hospitals; (2) ability to comply with the state mandate to safely house our acute rehabilitation services currently at the Fairmont facility; (3) critical Medicare access in a rapidly-aging community; and (4) preservation of 911 receiving centers.

“Rehab facilities at San Leandro Hospital will offset losses in other parts of the organization,” said ACMC’s Lassiter. He also discussed the addition of other revenue generators, such as orthopedic services, to help stabilize the hospital’s operation “forever.”

The vast majority of the public speakers were doctors or other medical staff from the hospital. One of the non-medical personnel speakers, City Council candidate Dan Dillman suggested taking a radical action. “Why a parcel tax that’s so low that it just gets us by? Why not something like $500 per year for 3 years, but then give the taxpayers free medical – and free wi-fi?” Dillman said this would then not be just taking from the citizens but rather “jointly investing and receiving.”

Mayor Cassidy commented on what the public policy rationale would be for passing the proposal:

(1) positive health impact on San Leandrans, whereas closing the hospital would ensure that some residents would die who otherwise would not, due to inability to get to an emergency room in a timely fashion;

(2) positive economic impact since the $1 million investment would be leveraged with county and federal funds to sustain a $100 million annual operation (the hospital’s payroll) plus the supporting economic culture supported by the hospital (doctor’s offices, pharmacies, diagnostic services, etc.);

(3) investment in avoiding a disaster, so San Leandrans wouldn’t be dependent on the disaster preparedness plans of neighboring cities (“It’s like paying for an insurance policy,” Cassidy said); and

(4) with the Kaiser premier hospital on the way, by keeping and revitalizing San Leandro Hospital we have the opportunity to transform our city into a hub of high quality health care in the East Bay.

This last statement was the only one by any of the elected officials to receive applause.

The next step for San Leandro, should the proposal be able to move forward, would be for the City Manager to act on the authorization given in this vote to initiate time-limited negotiations with ACMC for the expressed purpose of reaching agreement on the specific terms of the subsidy, ultimately subject to approval by the City Council.