Richard Halstead
Posted: 05/16/2009 10:05:30 PM PDT
A plan to resume public control of Marin General Hospital next year should be canceled because it places the financial health of the county's largest hospital at severe risk, the Marin County Civil Grand Jury concludes in a new report.
Sutter Health, which has leased the hospital from the Marin Healthcare District and managed it since 1996, has signed a legal agreement to return control of the hospital to the district beginning June 30, 2010.
But in its report, titled "Marin General Hospital: Hope is not a strategy," the grand jury says that would be a grave mistake. It says the risks of the hospital failing under district management "are unacceptably high." Instead, the grand jury urges that Marin General Hospital be sold to a financially strong health care system "such as Sutter Health."
The jurors want county supervisors to participate in the selection of the health care system and in negotiating the hospital's sale. They say the sale would have to be approved by district voters.
The report does not note that in 2007 the healthcare district's board contacted at least nine hospitable management groups and none was interested in leasing or buying the hospital.
The grand jury suggests, however, that Marin General could be made more attractive by stipulating that once a health care system acquires the hospital the healthcare district be dissolved - pending approval by a majority of the district electorate.
"By agreeing to dissolve if acceptable terms can be agreed upon, the district would remove a critical impediment to attracting other healthcare systems to Marin General," the report states.
Criticism of the jury's report came from several quarters.
Lee Domanico, the district's chief executive, said his board "has already substantially explored the majority of the recommendations contained in the report and found them impractical, improbable and generally not in the best interests of MGH or the community."
Larry Bedard, chairman of the district board, said, "The civil grand jury unfairly assumes that these agreements can now somehow be set aside, only 14 months prior to the June 2010 transfer date."
Charles Auerbach, one of the leaders of Alliance to Save Our Hospital, which in the past has defended Sutter against its most vocal critics, said the report comes too late.
"We're so far down the line now," Auerbach said. "It's counterproductive at this point to have the grand jury come out with a recommendation that tears up an agreement. The district and the Sutter people have simply decided to part and we're making the best of what we've got left. It's got an opportunity to make it."
But current district board member Sharon Jackson views the report more favorably.
"I believe the risks that the grand jury report discussed are legitimate," Jackson said. "I believe the district is not thoroughly assessing them."
A spokeswoman for Sutter Health said company officials would not comment on the report.
The list of risks cited in the report is long.
First and foremost, the grand jury questions whether the district will be able to raise sufficient operating capital given the nation's ongoing economic crisis. The grand jury writes that the district should have cash on hand equal to at least 100 days of expenses, about $100 million, when it takes control of the hospital. The money will be needed as a cushion against unexpected delays in payment of accounts receivables. But the jury says the district expects to have only $15 million at most.
The grand jury notes that having even that amount of capital is contingent on the district being able to borrow $50 million, which is no sure thing given the state of credit markets. The district will have to use the bulk of that financing to repay the county of Marin, which has loaned it $20 million, and the company that is designing a new information technology system for the hospital, which it will owe $15 million.
Defenders of the district hospital model point out that Marin General was profitable enough from 1995 to 2007 for Sutter Health to transfer $69 million from it to other uses within the Sutter system. But the grand jury questions whether Marin General will be able to maintain that level of profitability in the future without Sutter's market clout. The jury predicts that as a stand-alone hospital Marin General will be unable to negotiate the same favorable reimbursement rates from insurance companies.
Finally, the grand jury notes that unless Marin General hospital gets a reprieve it must, under state law, begin construction of a new, seismically safe wing by 2013. The jury estimates that the wing will cost $350 million to $400 million. It predicts a bond issue approved by two-thirds of the district electorate will be needed to pay for the wing.
The grand jury concludes, "Even under the most favorable conditions, the probability is that Marin General will face declining revenues, increased costs and persistent capital shortages, which will impede its ability to compete with nearby hospitals and outpatient facilities."
Contact Richard Halstead via e-mail at rhalstead@marinij.com
http://www.contracostatimes.com/news/ci_12388695?nclick_check=1
No comments:
Post a Comment