As Assemblyman Jared Huffman and his fellow legislators pursue hopes of an investigation into Sutter’s business practices, Huffman is not overlooking the culpability of the not-for-profit corporation that oversees Marin General Hospital for Sutter — particularly the board’s role in the transfer of more than $120 million in profits since 1995.

The Marin General Hospital board of directors is comprised of 13 community members. Two were directly appointed by Sutter, the rest are appointed by previous board members but are subject to Sutter’s approval. One member, David Bradley, is the Sutter executive in charge of Marin General.

The board voted to approve the transfers of $88 million from Marin General’s profits to Sutter’s Sacramento headquarters in the last two years. Previous transfers bring the total to $120 million that has been transferred out since 1995, compared to only $5.3 million that has been transferred in.

But the question remains: whose interests should the board members serve — Sutter’s or the Marin community’s?

According to Huffman, they should be serving the best interests of Marin.

His July 17 letter to the board requested that its members “explain the basis for allowing these large transfers of money out of Marin General Hospital to other Sutter hospitals.” Furthermore, he requested all documents relating to the board’s role in “reviewing, commenting upon, advising or approving these transfers.”

The response by board chairman Robert Heller explained the familial cash policy of Sutter, whereby excess cash from profitable hospitals is funneled to Sutter’s less-profitable facilities.

But this explanation wasn’t enough for Huffman. He responded with the speculation that the board “simply rubber-stamped the looting of Marin General Hospital.”

“My questions are about your role, as fiduciaries of Marin General Hospital and the patients it serves, in allowing these massive transfers to happen,” he wrote.

And he’s not the only one who doesn’t seem to buy the “aw, shucks, we’re a family” sensibility. Now, the Marin Board of Supervisors is getting involved in the fight. On Sept. 1, the board unanimously adopted a resolution calling on the board of directors to “fully fulfill its fiduciary duties to the hospital and the Marin County community.”

Further questions have been raised about the interests of the board in light of the realization that it would be within the bounds of Sutter’s lease for the board to move funds to a depreciation account, which couldn’t be transferred by Sutter.
According to Marin Healthcare District Chief Financial Officer David Cox, the board is authorized to put about $100 million into a depreciation account. To date, the board has failed to put any money off limits.

Marin General board members have declined to comment, directing all questions to Sutter spokesman Bill Gleeson.