Problems at Marin's Sutter Hospital

Anyone who has been in the hospital knows how important a kind and competent nurse can be. But nurses question whether patients will be able to get the same quality of care in a privately-owned hospital as they did at Community.

Marin General Hospital is a case in point. Marin General was sold to CHS in 1985. It is now $46 million in debt.

According to Doctor Norman Carigg, who has been with the hospital for 36 years, "the quality of patient care is at its nadir now. Part of the blame can be placed upon managed care," but Carigg places the rest of the blame on CHS, which he says has siphoned millions of dollars to its San Francisco offices.

The author of what Carigg calls Marin's "lessee-friendly lease" was the hospital district's attorney Quentin Cook, who became the lawyer for the privatized hospital. He was also the CEO of CHS at the time of the merger. This kind of ambiguous relationship of chief officers with buyers and sellers of a single hospital also occurred in the Community Hospital deal.

The Chief Financial Officer of the hospital, Jim Russell, was at the same time the CEO for Sutter. Supervisors saw no problem with this as long as Russell was kept "isolated." Critics say Russell's dual role made it awfully convenient for Sutter to get the kind of arrangement it wanted.

As Chief Financial Officer, Jim Russell was the one who repeatedly told the Board of Trustees that Community was floundering, and provided the figures. "I didn't like it that Jim Russell worked for both companies -- it looked sticky for us -- but there he was and it's not easy to find someone else who wanted to fill that slot," Ernie Carpenter said. "But we didn't need him to tell us it was in trouble, we had an outside independent auditor before that who said it was going to go down the tubes."

Mike Cale feels quite certain that Community is protected against the kinds of problems that faced Marin by its superior contract. Says Michael Allen, "We alerted them to the problem at Marin, and it's true they got a better contract. But no matter how good the contract is, a loophole can always be found."

Marin residents tried to place an initiative on the ballot to bring the hospital back into public ownership, but a court ruled that it was invalid because the lease was an "administrative decision."

Another hospital associated with Sutter since 1992, El Camino District Hospital, is on its way back to the public hospital district that sued the hospital's managers earlier this year. Under its first year of management, El Camino post a $17.7 million loss, the first time, reported the San Jose Mercury news, that it has been in the red in its 35-year history. An state investigation is looking into the losses.

Sutter/CHS has also been cited for Medicare fraud, and is settling out of court for $1.3 million.