Sutter to remain in Santa Rosa

<p>Sutter Health announced Tuesday it will remain in Sonoma County, ending months of negotiations with rival Santa Rosa Memorial Hospital to transfer its public medical services.</p><p>Officials said Sutter, Memorial and the county were unable to resolve key issues surrounding staffing levels, hospital bed capacity and emergency service capabilities.</p><p>Sutter CEO Mike Cohill said “not resolving these issues prevents the hospitals from moving forward with the County of Sonoma to complete the approval process on the transfer of services.”</p><p>County officials demanded that certain levels of medical services that, at this point, Memorial could not accommodate, sources said.</p><p>Memorial CEO George Perez said his hospital had been prepared to meet the county’s needs with an 80-bed expansion and a doubling of the size of its emergency department. He said Memorial had stepped up construction in anticipation of an agreement with Sutter, but now had use of those beds for patients in it cardiac care unit, orthopedic unit as well as other services.</p><p>But county officials, who threw a legal stumbling block into Sutter’s path of retreat from hospital services, said they remained concerned that Memorial did not have the capacity to assume Sutter’s programs.</p><p>In a joint statement Tuesday afternoon, the two hospitals said that after more than a year of talks, “Memorial and Sutter have concluded that options which may have been possible a short time ago are no longer viable.”</p><p>The announcement was a dramatic change in direction. Sutter announced in January 2007 that it wanted to leave Sonoma County and turn over public medical care programs to Memorial, which immediately launched an accelerated expansion project.</p><p>Sutter’s desire to close its hospital and leave Sonoma County followed a disclosure that it had posted a $6.8 million loss in fiscal 2005, following a $4.5 million loss the previous year.</p><p>The hospital also is under a state mandate to replace or seismically retrofit the 238-bed Chanate Road hospital by 2013.</p><p>“SMCSR will remain open and will continue to fulfill its commitments under the Health Care Access Agreement” with Sonoma County, Cohill said in a memo released to employees and doctors Tuesday morning.</p><p>“The transaction with Memorial is no longer a possibility,” Cohill wrote.</p><p>He said Sutter will keep evaluating remaining options including improving the Chanate Road facility to comply with earthquake standards or build a new hospital.</p><p>“SMCSR will remain open and explore options for growing the business/revenues and decreasing costs in order to reduce the unsustainable hospital losses,” Cohill wrote.</p><p>But the hospitals’ joint statement warned that the failure of a deal would cause problems.</p><p>Without an agreement, “Sonoma County’s six non-Kaiser hospitals will continue to struggle financially with excess capacity in a marketplace where the growing number of uninsured, indigent and Medi-Cal patients do not cover the cost of care,” the statement said.</p><p>Sutter’s decision last year to leave prompted an outcry from some medical activists and objections from county officials who said the move would violate Sutter’s contract to serve the uninsured and under-insured. Negotiations have been ongoing behind closed doors.</p><p>Cohill ended his lengthy memo with an apology to his employees.</p><p>“I realize how difficult the last year has been for all of you as you waited for answers and information on the outcome of this transaction,” Cohill said. “I am truly sorry for the stress and discomfort it may have caused you and your family.”</p><p>You can reach Staff Writers Randi Rossmann at randi.rossmann@pressdemocrat.com and Bleys W. Rose at bleys.rose@pressdemocrat.com. Staff Writer Bob Norberg contributed to this report.</p>