Sutter to pass purchase option to Alameda County.

San Leandro Hospital is the latest in a string of Northern California acute care facilities to face the ax, with county supervisors recently voting to postpone a decision on the hospital’s fate.

But how did it get here?

One of the two campuses of the Eden Township Healthcare District, the 122-bed San Leandro facility is owned by the district, but has been operated by Sutter Health since 2004. Written into the hospital lease is Sutter’s right to “assign its interests, or any portion of its interest, in the purchase option without the landlord’s consent.”

For its part, the county initially planned to close the hospital’s medical, surgical and emergency room services. The space would then be remodeled to house rehabilitation and urgent-care centers operated by the county’s medical center.

But as San Leandro is the only full-service facility in the city of 80,000, its closure stands to leave the city without inpatient hospital or emergency room services. The closest emergency services are at St. Rose in Hayward, albeit with less than 10 emergency beds. Highland Hospital in Oakland is up to 15 minutes away, with 22 beds usually reserved for trauma patients.

Many of the hospital’s patients are from under-served communities, leading health care advocates to charge Sutter with “medical redlining,” or denying treatment to patients based on their race and socio-economic status, according to a release by the California Nurses Association.

San Leandro physicians, nurses and residents have led rallies and flooded community meetings in an effort to save the aging hospital, which employs 547 and will require an estimated $25 million in seismic retrofitting work. Dozens of citizens took the floor to implore the five directors of the Eden Township Healthcare District to reconsider accepting the county’s proposal — and hope abounds.

District directors passed a motion in June urging rejection of the county’s plan for the hospital. And Alameda County Supervisor Alice Lai-Bitker pledged to schedule a meeting to encourage her fellow supervisors to rescind the county’s original proposal.

“We put [the centers] forward only at a time when we were told there were no other viable options,” said Lai-Bitker. “The board of supervisors doesn’t want to close the hospital.”

She was right. On July 14, before about 100 doctors, hospital employees and hospital backers, county supervisors voted to postpone a decision on whether the county will take over the hospital from Sutter upon its September departure.

New Health Care Services Agency Director Alex Briscoe said the decision to postpone was based in part on the fact that the county had recently determined that higher percentages of patients coming to San Leandro’s emergency room are more critically ill than earlier surveys by either Sutter or the county showed.

According to the Oakland Tribune, previous partial studies showed only a small estimated percentage of the 25,000 to 27,000 annual ER patients needed acute care; Briscoe said that revised surveys increased that level to 59 percent.

But need alone isn’t enough to keep a hospital functioning, and though they’ve postponed a decision, Alameda County supervisors have few promising options on the table for the facility.

Keeping the 50-year-old hospital open as a full-service facility with the current medical, surgical and emergency room services is not a viable option for the county, due to budgeting constraints. Rehabilitation beds, an urgent-care center or retaining ER services seem to be the most likely possibilities for the hospital’s future, according to Lai-Bitker.

Meanwhile, the offer by Victorville-based Prime Healthcare Services to operate the hospital as a full-service medical facility could not be considered by the district, due to the fact that Sutter’s lease will not expire until 2010. As such, it is Sutter’s prerogative to sign the hospital over to a party of its choosing, and Alameda County is it.

But county operation of the hospital would require a $3.5 million to $6 million annual subsidy, Briscoe said. And the county — and city, for that matter — are already tightening their respective belts, not adding expenses. Both cut millions of dollars from their 2009-2010 budgets, and are only anticipating further cuts next year due to less property and sales tax revenue.

Former Health Care Services Agency Director Dave Kears — who retired from the post this month — suggested that the city should ask voters to approve a parcel tax subsidy for the hospital.

“San Leandro should step up like Alameda,” he said at the July 14 meeting. In 2002, Alameda voters passed a $298-per-parcel tax to help keep Alameda Hospital open.

Using general fund monies to operate the facility is an option that hasn’t been investigated yet, Kears said.

Luckily, Alameda County’s supervisors have bought themselves a couple of months to thoroughly explore all of the feasible options for the facility, before they give Sutter a final decision as to whether they will accept ownership of the hospital.

- By Rebekah Stone

Rebekah Stone is the editor of the Healthcare Journal.