A special district charged with administering public health care services in Hayward and San Leandro can add another voice to a growing number of critics calling for it to change its ways or dissolve.
Eden Health District should be dismantled because it "no longer owns and operates a district hospital or other direct care assets to deliver acute health care solutions," a 12-page Alameda County civil grand jury report has concluded.
The district at one time owned Eden Hospital, but sold it to Sutter Health because it could not afford state-required seismic upgrades. The rebuilt hospital is now called Eden Medical Center.
Eden Health District does own medical offices in San Leandro, Castro Valley and Dublin.
Grand jurors criticized the district for spending more time managing real estate holdings than focusing on its core mission to provide medical services.
"The district's oversight and management of its real estate holdings currently contributes little, if any, value to delivering health care services," the grand jury's finding read.
"Consequently, it has little time to administer grants and sponsorships to various organizations to provide health care services," adds the report, released last month.
Health district administrators disagree, noting they are recovering from a costly lawsuit and focusing on gaps in the community's health care services.
The health care district owes Sutter Health about $17 million after losing a lawsuit over ownership of San Leandro Hospital. Sutter had run the hospital with an option to buy it, and after the district board voted not to approve the sale the matter went to court. The district fought all the way to the state Supreme Court despite losing every round.
The district has since turned over title of San Leandro Hospital to Sutter, which donated it to Alameda Health System.
Eden Health District board member Tom Lorentzen said the district does not have rigid mission goals so it can adapt to changing needs and provide support to organizations when needed.
"Can we all do better? Yeah, we can all do better, but we're in the process of shifting our mission to find new and better ways to deal with the overall subject of health," Lorentzen said in an interview.
The investigation stem-med from a citizen complaint that questioned whether the district should even exist.
The Eden Health District, formerly the Eden Township Healthcare District, was formed in 1948 to build and operate Castro Valley's Eden Hospital. The district covers Eden Township, which includes Castro Valley, San Lorenzo, Hayward and San Leandro. It stopped levying taxes in 1977.
"It's very hard for a district that has been sued and been in court for the last five years to do very much but put out fires," Eden Health District board chairman Lester Friedman said.
"We're trying to survive, deal with Sutter (Health), pay off the nearly $17 million we owe there, giving money to St. Rose Hospital and San Leandro's Davis Street, and the other 50 or so entities that are given money to support direct health care," he said.
The district owns the San Leandro Medical Arts Building, part of the Dublin Gateway Building and the Eden Medical Building, across the street from Eden Medical Center.
The Eden Health District gives grants to community health organizations. Grants are expected to account for about 12 percent of the district's expenses for the upcoming fiscal year, according to the grand jury. Close to 76 percent of the district's 2015-16 operating budget is for real estate-related activities.
Another 12 percent goes to administration, legal and consulting expenses.
"In effect, the Eden Township Healthcare District is essentially a commercial real estate management operation rather than an indirect (or direct) health care provider for citizens of the community," the grand jury's report read.
"Its poor management and absence of innovation results in very little impact on the health of Alameda County residents within the district," the report says.
Eden Health District CEO Dev Mahadevan disputes that and said the district purchased medical buildings because physicians and other medical professionals were looking for affordable office space.
The grand jury recommended that the Eden Health District either set "a clear vision and a defined strategic plan to be relevant" or be dissolved.
That suggestion is being heard in the Legislature after Assemblyman Bill Quirk, D-Hayward, introduced a bill in February, sponsored by Alameda County, that would require the Alameda County Local Agency Formation Commission to dissolve the district. Quirk's bill sits in a Senate committee.
A bill by Assemblyman Rob Bonta, D-Oakland, would require a health care district such as Eden to spend at least 80 percent of its budget on community grants to groups that provide direct health services.
The Eden Health District board is working on a formal response to the grand jury report.
July 14, 2016
The Mercury News
By Darin Moriki
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