Fight to keep community hospital open could bankrupt healthcare district

The struggle to save a community hospital in California may come at the cost of bankrupting its healthcare district, according to the East Bay Express.

California's San Leandro Hospital is heavily subsidized but still loses up to $1 million every month, and these losses could force it to close unless it receives $17 million from the Eden Township Healthcare District. The district, however, would face bankruptcy if it had to pay the full amount, according to the article.

In 2013, after a protracted legal battle, a court ordered Eden Township to pay the hospital's then-owner Sutter Health $17 million, while in a separate deal, the nonprofit giant agreed to turn the hospital over to Almeda Health Systems (AHS). Sutter offered to donate the $17 million to the hospital and give an additional $22 million to maintain its department for the next two years, while the city of San Leandro pledged $3 million in payments spaced out over three years.

Now, however, Eden Township officials say they were kept out of the loop during the negotiations between Sutter and Alameda County Supervisor Wilma Chan that led to the hospital's transfer, and that the healthcare district cannot pay the $17 million all at once. Chan disputed the assertion, according to the article, and called on the healthcare district to pay the money as soon as possible. 

The legal dispute itself is largely the reason Eden Township officials say the healthcare district can't pay all at once; the fight to keep Sutter from closing the hospital cost the district about half its assets, and a consulting firm said selling the rest could put it out of business altogether. After a series of failed talks with Sutter, the district has filed a hardship motion requesting 10 years to pay the sum.

Community hospitals like San Leandro are increasingly seeking affiliation or other operational changes to deal with financial pressures, with more and more seeking mergers with larger organizations to survive, FierceHealthFinance previously reported.  

To learn more:
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