Albion Monitor /News

A community divided over plans to privatize its hospital

Community or Corporate Hospital

by Bruce Robinson

Changes are vigorously opposed by hospital workers

Santa Rosa's publicly-owned Community Hospital has served the northern California city for 130 years, giving birth to generations of local residents, and hosting its share of deaths as well, but now the venerable facility is having to face its own mortality.

For the first time since it opened in the waning months of the Civil War, the hospital is on the verge of moving away from public ownership as the Sonoma County Board of Supervisors seeks an "affiliation" with a larger, corporate enterprise to assume control of Community's assets and operations.

But the changes are being vigorously opposed by hospital workers and others who fear that without public ownership, Community's long-standing policy of providing health care for everyone, even those who cannot afford to pay for it, will disappear, along with many of the jobs the hospital has provided.

Where will the county get the money for charity care?

The fundamental reason for the change, the supervisors say, is that a stand-alone public hospital is no longer economically viable. "We've lost money the last three years in a row," asserts board chairman Ernie Carpenter. "The hospital will not survive in its present form." Five years of studies and cost-cutting measures have forced him to conclude that Community Hospital, as it now exists "simply cannot compete" in the contemporary climate of constricting health care economics.

That stance is strongly challenged by leaders of the Service Employees International Union, Local 707, which represents most of the 800 workers at Community. "The hospital is in a very strong financial position," insists SIEU general manager Michael Allen. "The primary problem is that is it not funding all of its depreciation. But at the present rate of operation, that would not be a crisis -- if they changed nothing -- for nine or ten years." The bookkeeping losses from depreciation -- $2.3 million in 1993 and $2.4 million last year -- are the full extent of the red ink, Allen says.

Gregory Wonderwheel, the union vice president, has studied the books in depth and found that in those same two years of paper losses, "hospital revenues have been greater than operating costs," even after Community absorbed almost $3 million in "charity care" and another $900,000 in bad debts during 1994. In 1993, the hospital provided $4.7 million in charity care. Based solely on operating profit and loss figures, "the hospital made a profit in both of those years," Wonderwheel said. "If a private operator runs the hospital and takes its operating profits out, where will the county get the money for charity care?"

Right now, the county is wondering the same thing.

Judge blocks union's attempt to circulate a ballot petition

County supervisors issued a Request for Proposals last summer, and received two responses when the bids were opened Sept. 26. But the proposals submitted by Sutter Health Systems and HCA/Columbia, the nation's largest corporate owner of hospitals, were both rather sketchy on the details of how they would address the county's requirement that a new owner continue to ensure indigent care. Both subsequently submitted amended proposals that shored up their offers in that regard, but neither bid presently included enough funding to make up the $3 million annual cost that Community has been in indigent care. Public hearings on the proposals are due to begin November 3, and the supervisors are expected to select their preferred provider and enter into formal contract negotiations later in the month. Their announced goal is to have an affiliation agreement finalized by the end of the year.

But all deals may be off, if the Save Community Hospital Committee has its way. With considerable support from SEIU Local 707, the Committee has launched a petition drive to force a referendum on the supervisors' decision to lease the hospital. "We're convinced people want to have a say on this," says union organizer Mary Froemer, a spokesperson for the Save Community Hospital Committee.

But their attempt to seek public support has been fought at every step by the county, which asked a judge to block the circulation of initiative petitions almost as soon as the Committee announced plans to do so. The union and the county also wrangled in court over the legal description of the initiative that was drafted by County Counsel James Botz. That statement, claimed opposing attorney Robert Bell "was neither accurate nor impartial" as required by law. But Bell's efforts to have Botz' statement supplanted by one drafted by the petitioners was ultimately rejected by Sonoma County Superior Court Judge Lloyd von der Mehden.

However, the judge also dismissed the county's preemptive bid to block the circulating of the petitions, which allowed that effort to get under way Oct. 14. On that first day, about 25 hospital supporters were out at nearly a dozen supermarkets and other high-traffic locations, and came away with more than 1,300 signatures, according to the union's Froemer, who called the receptions "tremendous."

"People from Single Payer Advocates are very much involved in this campaign," she noted. "They couldn't believe how easy it was to get signatures" compared to the comparable effort the made on behalf of last election's ill-fated Proposition 186. "People were standing around just waiting to sign."

The petition is aiming for a spot on the November 1996 ballot. It will have to collect 16,000 legal signatures to qualify. Should it make it to the ballot and win voter approval, it would nullify any contract the supervisors might have made with an outsider operator, unless the lease terms were also put to a vote and were approved.

Albion Monitor October 30, 1995 (

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