Sutter Health accused of wresting $87 million from hospital

One would think that Sutter Health, a 26-hospital system in Northern California, could generate its own cash without resorting to unsavory cash-draining schemes.

But according to state legislators, the chain bled nearly $87 million in so-called "excess cash" from a hospital for two years after setting plans to transfer control of the hospital to Marin County. In fact, Rep. Jared Huffman has accused Sutter publicly of taking a full $120 million out of Marin General and putting in only $5.3 million.

The hospital's position--articulated by a board of directors appointed by Sutter--is that the Sutter is giving the district a hospital that is debt-free and in far-better shape than it was. Sutter will be running the Marin General until June 2010, and "derive the benefits that being part of a large integrated system offers," they said. They say Sutter hospitals are a "family" of hospitals, each of which support each other as needed.

A group of 13 legislators have come together to challenge this notion, however. They're asking state Attorney General Jerry Brown to determine whether Sutter has been using county, district and private safety-net hospital assets to their own benefit. They point not only to the $87 million transfer, but also a series of other actions in which the chain allegedly abdicated its responsibilities to public entities.

To learn more about this controversy:
- read this Health Leaders Media article