District still firm against hospital

Written by Adam Spencer, The Triplicate December 30, 2013 02:18 pm

District reiterates opposition to hospital’s proposals; and may restrict Moore’s voting

Clarke Moore, a Del Norte Healthcare District Board director, was not representing the district when he participated in a recently completed strategic options study of Sutter Coast Hospital. And the rest of the board strongly wants you to know that.

This was the starting point for a long and contentious debate about all things related to the embroiled local hospital during last week’s meeting of the healthcare district board, which was considering adoption of a letter penned by board director Dr. Kevin Caldwell that affirmed the district’s views regarding the hospital that are at odds with Moore’s views.

The letter states that the district’s position remains “unchanged” and that “Sutter Coast Hospital should remain a locally owned acute care hospital. If Sutter Health is determined to end this relationship with our community, we should collaborate with the three other health care systems which have shown interest in our hospital,” the letter states.

In November, Moore and the rest of the 15-member steering committee made up of community leaders and hospital officials unanimously voted in favor of the local hospital sticking with Sutter Health as a health system partner. The group also agreed that Sutter Coast should pursue application for a Critical Access Hospital designation, which guarntees cost-based reimbursement for Medicare but caps acute care beds at 25.

In December, the hospital Board of Directors voted to pursue Critical Access and remain intact as a local governing board for now — avoiding “regionalization,” a long-proposed corporate merger with Sutter Health’s West Bay Region in the Bay Area.

The healthcare district successfully won an injunction last summer blocking Sutter Coast and Sutter Health from pursuing “regionalization” or Critical Access designation, but in July the district settled with Sutter, opening the gates for Sutter to pursue Critical Access. But not before a consultant studied the options on the table and involved members of the community in doing it via the steering committee. The healthcare district declined to be a part of the steering committee due to a belief that the study would be biased. Moore still participated, however, as an individual, and his support for Sutter Coast after it has put him at odds with the rest of the healthcare district and some other members of the community.

Jim Coston, a former hospital board member, called for Moore’s resignation from the healthcare district board at the meeting, saying that Moore’s involvement on the committee represents a “breach of fiduciary responsibility.”

Arlene Barnts, a registered nurse who works in the quality department for Sutter Coast, thanked Moore for his role on the study.

“I think you should be applauded for having the courage to represent us,” Barnts said, adding she opposed the letter that the healthcare district was considering. “Trying to get rid of your only dissenting member questions your legitimacy.”

The district ultimately tabled adoption of the letter, primarily due to the legally questionable action of removing voting power from an elected official with the clause: “Mr. Moore should no longer participate nor vote on issues related to the hospital” due to his participation on the strategic options study, and particularly due to a non-disclosure agreement signed by Moore (serving as an individual) and the rest of the study’s 15-member steering committee.

Some healthcare district board directors questioned the legitimacy of the strategic options study since Sutter provided financial data to the consultant, and it was not independently audited.

“We are saying that Sutter is not full with the facts — whether you want to call that lying or not,” said board director Terry McNamara.

For support, McNamara cited a New York Times article published in early December that is highly critical of Sutter Health for charging high prices and paying executives high salaries, then said, “when someone says Sutter is not profiteering that is not correct.”

In a recent radio ad, Moore said he participated on the steering committee to find out if Sutter was “profiteering.”  In the ad, he says he was convinced via the committee that Sutter Coast and Sutter Health are “are strong partners with this community — not profiteers.” Moore again clarified that he was speaking for himself on the radio ad and not representing the healthcare district.

The Times piece notes that Sutter “employs 28 officials who make more than $1 million a year, and four of them are among the top-paid hospital executives in the state” and that Sutter’s CEO makes more than $5 million.

Glenn Melnick, a professor of health economics at the University of Southern California states in the Times article that “Sutter is a leader — a pioneer — in figuring out how to amass market power to raise prices and decrease competition.”

   In response to the article, Sutter Health pointed to $153 million worth of charity care that the health system provides annually. Sutter Health also said it spends $450 million more on Medical-insured treatment than is provided by the state. 

Moore has said that Sutter’s high prices cited in national news outlets do not actually reflect the amounts that insurance companies, Medicare or individuals pay in the end and that Sutter’s market position makes it a natural target for critics.

“Success brings a lot of criticism and they’ve been very successful,” Moore said in a recent interview.

Barnts said that the prices charged do not reflect what is paid to the hospital.

“We get paid the same for whatever DRG we get,” Barnts said, referring to Medicare’s set payments under Diagnosis Related Groupings.

“I’m genuinely worried that all of this infighting is ultimately going to drive people away from the community we chose to live in,” Virginia Niehoff, RN case manager for Sutter Coast, said during the meeting.

Dr. Greg Duncan quickly shot back: “Well they voted against community involvement for regionalization and Critical Access.”

Ken Hall, the current chairman of Sutter Coast’s Board of Directors, and Linda Horn, the hospital’s current CEO, have both admitted that it was a poor decision to not seek community input before the initial regionalization decisions and that is why the strategic options study was done. And the steering committee component was intended to provide that community involvement.

Like Moore, Martha McClure has come under fire from some of her fellow members of the Del Norte County Board of Supervisors for her participation as an individual on the steering committee.  But at least one other county supervisor privately said that it was “stupid” for the county not to participate.

Heading into a new year that will be spent by the hospital navigating through the Critical Access application process, it is unknown which public agencies will follow the mantra often cited by local officials: “If you’re not at the table, then you’re on the menu.”

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