by Gregory Duncan, MD
Part 1: ‘Regionalization’
Sutter Health's activties in Del Norte County reveal their statewide effort to control the California healthcare market
Many people have been asking about Sutter Health's plans for the communities of Crescent City, CA and Brookings, OR, now that the Sutter Coast Hospital ("SCH") Board in Crescent City has voted to downsize the only hospital in our region to a Critical Access facility in order to qualify for higher Medicare payments.
I had stopped writing newsletters after the SCH Board, acting on the advice of Sutter Health attorney and Regional Vice President Michael Duncheon, voted to censure me for allegedly breaching Sutter's confidentiality rules. In my roles as hospital Chief of Staff, and a member of the hospital Board of Directors, I felt the public had a right to be aware of, and included in, important changes at our region's only hospital--changes which will affect all of us. Sutter Health and the SCH Board now claim that without their authorization, no one outside the Board room, including the physicians who elected me to represent them on the Board, has the right to know any Board decisions or actions, unless the Board specifically authorizes release of the information. The SCH Board refuses to provide any evidence for the censure, which includes allegations that may impact my ability to work at Sutter hospitals. However, the story of Sutter Health is too important not to tell.
How a small California community discovered a big problem in healthcare
Locally, the story begins with the SCH Board's closed door vote in 2011 to “Regionalize” SCH. Regionalization dissolves local hospital Boards, and transfers hospital ownership out of communities and into five regional corporations, where Boards entirely appointed by Sutter Health control hospitals. Thus, Sutter Health's longstanding slogan of “Community Based” hospitals is no longer appropriate.
Past SCH Chief of Staff Dr. Kevin Caldwell, a senior primary care physician in Del Norte County, strenuously opposed and voted against Regionalization, asking for more time to understand the issue. At the deliberate exclusion of the public, the SCH Board (which includes two Sutter Health executives and one Sutter physician foundation employee) voted to transfer ownership of Sutter Coast Hospital to a San Francisco based Sutter regional corporation. Sutter Health had not even provided the regional bylaws to the SCH Board when the vote was taken.
In upcoming reports, I will present information on how Regionalization increases the price you pay for healthcare, and further details of Sutter's attempt to Regionalize SCH, where grass roots opposition has stopped Sutter Health from taking ownership of SCH, at least for now. My term on the SCH Board expired yesterday, but the effort to bring affordability and accountability to our healthcare system is just beginning.
I will also provide evidence that Sutter Health's disproportionate market share, lack of transparency, and high patient charges are harming businesses, public entities, consumers, and patients in California. As you evaluate the evidence, remember that Sutter Health is a tax exempt public benefit charity, funded by billions of dollars in tax exempt bonds. Sutter's patient charges are also among the highest in California. According to a 2013 newsletter from California Value Trust, the state's largest self-funded public school trust, “Sutter hospital rates are roughly 60% higher than the average of other hospitals throughout the state.” On the north coast, where the region's only hospital is managed by Sutter Health, high charges have forced patients to seek care at outside facilities, where charges are often much lower for the same service. For more information on Sutter's charges in San Francisco, read the following New York Times article by Elisabeth Rosenthal: http://www.nytimes.com/2013/12/03/health/as-hospital-costs-soar-single-stitch-tops-500.html
Each of my newsletters will have one suggestion on how we can fix the problem of spiraling healthcare costs. Today, I ask that you send an email to me at firstname.lastname@example.org with your experience on how healthcare costs affect you, your family, or your business. Please let me know if I may share your information with state and federal leaders and groups who are working to bring affordable and accessible healthcare to their constituents and members.
Finally, I would like to thank all of the local and statewide supporters, from all backgrounds and political philosophies, who continue to help bring to light Sutter Health's activities. Last year, a Sutter executive told me that Crescent City “was not sophisticated enough” to understand Regionalization. He was wrong. Despite Sutter's radio and newspaper advertising campaign, and their $170,000 self-funded “study” on the hospital, this community understands Regionalization and Critical Access designation quite well--for Sutter, it's about money.
Between 2007 and 2012, many Sutter Health executives doubled their own income. Sutter Health CEO Pat Fry's compensation increased from $2,287,763 in 2007 to $6,393,883 in 2012. In 2012, the top 10 Sutter executives were paid a total of $27,600,000. You read that right--more than $27 million was paid to 10 executives in one year. (source: Sutter Heath 2012 IRS tax form 990, salaries rounded to nearest $100,000) Their salaries are paid from your hospital bills, which are also a major factor in your health insurance premiums.
Please let me know if you would like to join our team of volunteers who help us connect and inform others throughout California. Thanks to you, over 40,000 readers now receive these reports.
(Dr. Duncan is an Orthopedist at Crescent City Hospital. His blog is: www.crescentcityhospital.blogspot.com.)