Sutter's CPMC deal isn't healthy


At 10am on Friday, June 15, at the main chambers of the Board of Supervisors, the first of a series of public hearings will be held on specific aspects of the  development agreement governing the $1.9 billion Sutter Health/California Pacific Medical Center proposal to expand and centralize the giant health-care outfit’s health center by building a new 555 bed hospital at Geary and Van Ness. The deal involves demolishing the existing 220-bed hospital at St. Luke’s at Mission and Cesar Chavez and rebuilding a new 80-bed facility, expanding the Ralph K. Davies hospital at Duboce and Noe and closing down the old Children’s Hospital in Laurel Heights.

The hearing will be the first before the Board of Supervisors. Thus far, the project has been before only the executive branch: the Planning Commission and the mayor. After a brief introduction on the overall project the hearing will focus on the issue of jobs.

This is the largest project to be negotiated by the Lee administration -- and although the mayor introduced it to the board in May, not one supervisor has yet joined him to sponsor the legislation. That’s an an odd situation given the importance of the project – and the fact that Mayor Lee can usually count on an automatic four votes from the conservative faction of the board. But not this time.

The hearing was requested by a coalition of more than 60 community, neighborhood, labor, and environmental organizations -- San Franciscans for Healthcare, Housing, Jobs and Justice (SFHHJJ) -- which has been closely following the project for the last two years.  Members of the coalition have already appealed the project’s environmental impact report, passed last month by the Planning Commission, and SFHHJJ has developed a series of amendments to the agreement that it has been pressing on the Board of Supervisors.  Board President David Chiu agreed to set a series of hearings on the project before it voted on, along with the determination of the appeal of the EIR, in  late July.  SGHHJJ hopes to use the hearings to get across the serious shortcoming of the agreement.  In addition, depending upon the appeal of the EIR,  a law suit may well be filed by some members of the Coalition.

In short, what starts next Friday is a big deal.

Not only is it a big deal in the development war that is at the heart of San Francisco politics, but it also is a big deal given what may well be done by the Supreme Court in deciding the constitutionality of all or part of the Affordable Health Care Act. If Obama’s health reform is struck down by the court, in all or in part, which seems almost certain, Sutter/CPMC’s plan will most definitely take on even more importance for the future of health care and its costs in San Francisco.

Sutter currently controls about a third of the market for health care in San Francisco.  With the construction of this project, it will control about 40 percent -- a portion most knowledgable observers feel will give it market dominance  and an ability to actually set health care costs in San Francisco. Sutter’s business model -- as shown in Berkeley when it took over Alta Bates and elsewhere in the state – demonstrates that  with a dominate market position, it jacks up prices.

As the San Francisco Chronicle noted in 2010: “…Sutter Health Co. has market power that commands prices 40 to 70 percent higher than its rivals per typical procedure -- and pacts with insurers that keep those prices secret”.

A US Supreme Court that weakens or strikes down health care reform will simply re-establish the status-quo ante, a situation in which Sutter will thrive.

And that’s why the board’s conservative members are not supporting Mayor Lee’s deal: it simply does not protect the city -- itself a major health care consumer for both its workforce and Healthy San Francisco -- from Sutter’s history of turning market power into high health care charges.

SFHHJJ want the development agreement amended to place a cap on the costs charged to the city, allowing Sutter no more than 115 percent of the average charged  by  San Francisco’s other private, nonprofit hospitals.  It also wants Sutter/CPMC low charity care payments pegged at an average of what other nonprofit hospitals contribute, and it is calling for rebuilding St. Luke’s in San Francisco medically underserved south east to 180 beds, not the sure-to-fail size of 80 beds.

But there’s even more to deplore about the proposed deal.

In housing, although the EIR showed that a demand would be created for some 1,500 new two-bedroom homes, Sutter/CPMC agreed to only provide funds to build about 90 such homes. Such a massive shortfall will boost housing prices all other San Franciscans will pay.

The project's impact on public transit at the Geary / Van Ness intersection will be large and ongoing. More than 20,000 new car trips will be generated at that intersection by the new hospital. Plans for a Bus Rapid Transit raised roadway for the 38 Geary -- the most used bus line in the city -- will have to be altered at an unknown price since the project calls for all auto traffic to enter the site on the Geary Avenue side.

Again, San Francisco taxpayers will be on the hook to pay for these new costs.

But it is the jobs aspect of the deal that is the most distressing. Sutter/CPMC has a long history of labor disputes with its workforce. Last year it replaced nurses who took a day off to protest their working conditions, and a replacement nurse hired by Sutter accidentally killed a patient. Sutter/CPMC refuses to agree to hire all of its 6,000 current employees for the new facilities. It’s requiring them all to apply as new workers, losing all of their seniority, with a real prospect that many currently employed San Francisco residents will lose their jobs once the new facility opens. All that Sutter/CPMC has agreed to do is hire 50 residents a year for four years – 200 new local jobs, total.

The  June 15 hearing will focus on the jobs issue and public comment is sure to be hot on this laughable “commitment” agreed to by the “jobs” administration.

Calvin Welch is a longtime community organizer living in San Francisco. He currently teachs a course in the development history of San Francisco at San Francisco State University and the University of San Francisco.


He's probably old enough to have heard Spiro Agnew's classic line: "nattering nabobs of negativity" and probably instantly recognized how aptly it applies to him. "Nattering nabob of nimbyism", perhaps?

Since you never met a development that you liked, why should anyone take any notice of the fact that - surprise, surprise - you don't like this one either?

Healthcare, jobs, housing, parking, investment, this project has it all, so of course the NIMBY's are rattling their cages. Pathetic.

Posted by Guest on Jun. 08, 2012 @ 11:01 am

You don"t know what u are talking about.I'm a S.F. resident. I worked at CPMC for 35 yrs.and at age 57, I was laid off with a dozen co workers from Radiology.Sutter bought 4 hospitals,mergers. Where am I to look for work?I was a single parent of 3. My son has auto immune disease,so he was sick for 5 yrs befor being diagnosed.I had to pay $800.00 for Cobra, for myself and 2 children.At age 61, I have no health insurance.CPMC promised a retirement health plan. I applied to enroll and was denied.H.R. said that I resigned and in another reply,said I was terminated.Lies, I was collecting unemployment. As u know, u can't collect unemployment if u are fied or leave.April,2009, a co worker, who's husband died from cancer leaving her with 2 kids in middle school, was laid off. Not only that, but she, her self was a cancer survivor. Now, she is paying Cobra for herself and her kids.Sutter health is scandalous and lies.Jan. 2013,transport workers,who were in their 50's and had worked 20 yrs plus,were laid off. They too will lose their retirement health care.We were not Union.San Francisco is going backwards .This was a Labor City.I was born and raised here.No employee is safe working for CPMC,Sutterhealth.Think again!

Posted by Guest Joan Mc Cormick on Feb. 09, 2013 @ 5:39 pm

That's what public hospitals are for.

Posted by Troll II on Jun. 08, 2012 @ 12:06 pm

They are businesses and, without a profit margin, how would they ever get built or run?

The attempt to socialize medical care failed - even the Democrats couldn't bring themselves to go that far.

Posted by Guest on Jun. 08, 2012 @ 12:10 pm
Posted by Troll II on Jun. 08, 2012 @ 1:20 pm

a non-profit is also under no obligation to provide loss-making services.

Posted by Guest on Jun. 08, 2012 @ 4:39 pm

I knew this was a SFBG article before I even clicked the link. Such a tired set of arguments against development.

Posted by Guest on Jun. 08, 2012 @ 12:31 pm

Yeah, who ever thought that health care might be a human right, or that entities given tax-exempt status and all sorts of other benefits as nonprofits should be required to do something good for society?

Sutter is a NONPROFIT, folks. It's job, by law, is not to make money. Get it?

Posted by tim on Jun. 08, 2012 @ 1:16 pm

I see nothing here that indicates that a hospital should treat all it's clients the same regardless of their ability or willingness to pay.

Posted by Guest on Jun. 08, 2012 @ 4:40 pm

Tim, a nonprofit, like all corporations, is granted limited liability so as to serve the public benefit in exchange.

The differences between a nonprofit and a for profit are 1) accounting method, profit versus accrual, 2) for-profits have stockholders that vote for the directors and nonprofit directors are self-perpetuating and 3) for-profits pay taxes non-profits don't.

The Chamber of Commerce is a nonprofit and its job is to facilitate capital accumulation.

If the Mayor's people want it and the Planning Department is moving it, then it is going to happen. Calvin Welch does not, can not wield sufficient political power against developers to coerce a better outcome because his affordable housing cartel will be threatened with no access to MOH $ if they don't play ball.

The nonprofits already signed onto San Franciscans subsidizing luxury development by deteriorating services, that check has been cashed and has cleared. It is going to take the kind of community organizing that labor and the nonprofits are not allowed to do in order to deliver a new political reality.

Posted by Guest on Jun. 08, 2012 @ 5:32 pm

non-profit status can only be taken so far - after all, it is usually acquired for the tax break and not because they are pro bono publicum.

Calvin is off his trolley here, but then what is new? He and Hestor should get a room and give us all a break.

Posted by Guest on Jun. 08, 2012 @ 5:49 pm

I can see why Sutter should pay extra into the transportation fund, since they are going to be impacting transportation which is paid for by taxpayers and it the responsibility of government to build roads and provide transit. But in a normally functioning economy all those extra jobs would create more demand for housing which would generate extra jobs building housing for them. Perhaps the NIMBYs will do everything they can to avoid building any more housing but that is not really Sutter's fault or problem.

Why does Sutter have to provide housing for their employees? Isn't that the job of the private housing sector?

In the SFBG topsy-turvy world, private companies apparently have to provide money to build enough low income housing to house all of their employees even though none of them are actually low income! Is it the Editorial stance of the SFBG that all employers should build enough housing to house all of their employees? When a pizza shop opens, do they have to build an apartment house too? It is hard enough to run a business without having to be a landlord, too.

Or does SFBG believe that all housing should be Nationalized and that we should all live in Soviet-style apartment buildings?

Posted by GlenParkDaddy on Jun. 08, 2012 @ 2:24 pm

A hospital typically provides housing close by for on-call medical and nursing staff. Beyond that, there is no obligation. If the city wants masses of "affordable housing" then they should go to the voters and invite them to pay more tax to create it.

Posted by Guest on Jun. 08, 2012 @ 4:42 pm

CPMC/Sutter is a NON-PROFIT!! With profits in the millions. All most folks want is a development deal that is GOOD for San Francisco and has benefit for the community.

A coalition of folks mentioned, San Franciscans for Healthcare, Housing, Jobs and Justice (SFHHJJ), are stepping up to make sure that deal is GOOD for San Francisco. Sign on to a petition to make sure the deal is a good:

Posted by build it right on Jun. 08, 2012 @ 2:51 pm

would get nothing. SF has to be the only city on the planet that would object to having a new world-class medical facility here.

The lunatics are running the asylum.

Posted by Guest on Jun. 08, 2012 @ 4:44 pm

CPMC owns Davies campus,Children campus, Marshall Hale campus, Calif Pacic Medical center and St Lukes is this not world-class medical facility?

Posted by Guest Joan Mc Cormick on Feb. 09, 2013 @ 5:45 pm

The problem, GlenPark, is that the private housing market isn't creating any housing that's affordable to most health-care workers. Most hospital employees aren't doctors or even nurses; they're janitors, assistants, food-prep, orderlies ... folks who can't afford the median rent on an existing apartment, much less a new one. Nobody's building new housing that's remotely affordable to the average hospital worker.

The private market has failed SF's housing needs. That's why the city has to step in.

Posted by tim on Jun. 08, 2012 @ 2:57 pm

Check out Cubix for market-rate affordable housing for middle income people.

We need to be building more inexpensive housing for regular folks, I agree with you there, but the failure to do that is because of greedy developers and economically illiterate anti-development activists who have driven up the cost of housing.

Middle income people in San Francisco are going to be renters is most cases anyway. We should be doing everything we can to encourage more middle-income rental construction. In the meantime, I see plenty of 1 BD apartments in The Sunset for less than $1500 or 2 BDs for less than $2000. These are affordable on a janitor's salary especially the 2 BD with a room mate.

Posted by GlenParkDaddy on Jun. 08, 2012 @ 3:19 pm

I am also seeing shared housing situations all over town for $500-700/mo. Almost anyone can afford that.

I lived in a room in a shared house for a decade, it is not a big hardship unless you want kids or something.

Posted by GlenParkDaddy on Jun. 08, 2012 @ 3:51 pm

isn't much more than was the price when I arrived here 15 years ago.

The people who can't afford to live in SF also can't afford to live in Monaco, Aruba, La Jolla, Kaui, Zurich, Manhattan or London.


Posted by Guest on Jun. 08, 2012 @ 5:03 pm

afford housing. Your idea of suppressing business and hoping that SF becomes Detroit just so homes become more "affordable" is beyond ludicrous.

Posted by Guest on Jun. 08, 2012 @ 4:48 pm

CPMC/Sutter is a NON-PROFIT!! With profits in the millions. All most folks want is a development deal that is GOOD for San Francisco and has benefit for the community.

A coalition of folks mentioned, San Franciscans for Healthcare, Housing, Jobs and Justice (SFHHJJ), are stepping up to make sure that deal is GOOD for San Francisco. Sign on to a petition to make sure the deal is a good:

Posted by build it right on Jun. 08, 2012 @ 3:32 pm

Let me tell you one thing that the best health insurance plans has completely different set of meaning for different type of people. For those who are rich, the plan which can earn them more is best. However, those who are in the middle class have different ideas. They think that insurance plan is the best for which they will have to pay minimum premium. However, the poor person does not even know that what is health insurance? If you are one of them search online for "Penny Health" and get smart about insurance.

Posted by david z urbina on Jun. 09, 2012 @ 3:06 am

sutter has a hx of labor disputes and is not rehiring labor with earned seniority...
(lower wage workers)
and is not contributing to housing or transportation
and jacks up prices with market share.

just another ploy by a corporation to grind us down to slave labor.

Posted by Guest on Jun. 11, 2012 @ 10:38 am

in their right mind would want to pay for. Do you really think that, as a patient, I want to be treated by a unionized clockwatcher?

Posted by Guest on Jun. 11, 2012 @ 11:13 am

Sure beats being treated by a nurse that is on hour 13 of her day.

Posted by marcos on Jun. 11, 2012 @ 11:49 am

AND aren't demotivated or whine about it.

You're projecting your own ennui, dude.

Posted by Guest on Jun. 11, 2012 @ 11:55 am

That always is an odd situation given the importance of the project as per the requirements. The fact actually is made sufficient to get count on an automatic four votes from the conservative faction of the board.

Posted by Narconon Fresh Start on Mar. 04, 2013 @ 11:47 pm