Court puts ‘regionalization’ of hospital on hold

Written by The Curry Coastal Pilot July 13, 2012 09:50 pm

Some call it an unavoidable business merger that may save the hospital; others a corporate takeover that will ultimately shrink the range of medical services available in Del Norte County. 

Whatever the proposed “regionalization” of Sutter Coast Hospital really is, or really means, it’s on hold by court order, for now. 

On Thursday, Del Norte Superior Court Judge John Morrison granted the Del Norte County Health Care District’s petition for a temporary restraining order against Sutter Coast Hospital and the Sutter Health corporation, barring the local affiliate or its corporate controller from taking any further action toward merging Crescent City’s hospital into a region with five other facilities and two medical foundations, all overseen by one board of directors based in the Bay Area. 

 

Regionalization would dismantle the longstanding local board of directors in charge of one hospital. Nine out of 10 people on this panel live Del Norte or Curry counties, while all are appointed by Sutter Health. Last November, this board voted 9-1 in favor of shifting its powers to a regional authority, without holding public meetings about it first.

The backlash has been considerable: The Health Care District, the Del Norte County Board of Supervisors, a group of local doctors and increasingly more citizens are up in arms – at public meetings, in print and now, in court. 

Besides staying regionalization, the temporary restraining order prohibits Sutter Health from downsizing or reorganizing any departments at the hospital, particularly billing; or changing the designation of the hospital in any way that would reduce the level of services currently being provided.

The order expires Aug. 27, when a hearing scheduled for 9 a.m. may extend the restraints until the case is resolved, said the attorney for the Health Care District, Martha Rice.

The crux of the Health Care District’s argument for legally halting regionalization rests on a 1985 lease agreement between a public entity and a private healthcare provider, which contains stipulations about the organization and future governance of the local hospital.

“Sutter believes the District’s claims are without merit as they are based on a 1985 lease that expired by its own terms when Sutter Health built and opened the new hospital in Crescent City,” wrote hospital CEO Eugene Suksi, in a statement distributed to hospital employees and the board of directors Friday morning. 

“There were provisions in (the lease) that were intended to last beyond the lease and one of those was the understanding that the local board would govern the hospital,” Rice told the Triplicate.

Dr. Greg Duncan is the hospital’s chief of medical staff and the only vocal opponent of regionalization who’s on the current board and therefore allowed to attend the closed meetings where hospital decisions are made. His declaration to the court states that what’s at stake here “will deeply affect the quality of health care available to residents of Del Norte County.” 

Suksi’s declaration effectively says the opposite, calling regionalization a way to enhance hospital sustainability, provide additional resources for hiring and retaining doctors, and lower costs through consolidated management.

The defense attorney is Michael Duncheon, who represents both Sutter Coast Hospital and the Sutter West Bay Region. 

The West Bay board may consider a resolution to approve the merger at its Sept. 20 meeting, Duncheon’s declaration states. 

As for fears that regionalization is the first step toward reducing the number of beds available at the hospital in order to utilize a federal funding mechanism:

“It may be one of the alternatives considered,” Duncheon’s declaration states. 

However, “No application (for Critical Access Designation) is pending,” he wrote, “Nor will any be made this year. Moreover, if and when such an application is made, it would likely take more than a year to be completed and acted upon.”

In 1985, the Health Care District struck a deal with a company then known as Sutter Community Hospitals of Sacramento, which financed and built a new hospital on donated land along Washington Boulevard. Since then, the company has grown into a multi-billion-dollar non-profit corporation with 30 affiliated hospital campuses, five medical foundations, seven specialty surgery centers and 30 clinics spread throughout California and Hawaii.