Vital Seismic Safety Effort Undermined By SEIU

SACRAMENTO, Calif. December 12, 2006 – After hearing a misleading attack on the physician organizations and hospitals of Sutter Health by the Service Employees International Union (SEIU), a government panel delayed a vote last Thursday on whether to approve a nearly $1 billion financing package for Sutter Health hospitals and physician organizations. Despite a recommendation by its own staff to approve the network's application for tax-exempt financing, the California Health Facilities Financing Authority (CHFFA) voted to postpone its vote so it could better "digest" material that included misinformation and objections by SEIU.

This important financing would allow Sutter Health to make critical hospital seismic safety improvements and to improve and expand ambulatory and hospital services for some of its most vulnerable patients.

Sutter officials said there are considerable potential financial risks associated with delaying the bond approval process. If interest rates rise, it could increase Sutter Health’s costs and, as a result, drive up consumer health care costs.

The projects covered under the bond financing application being opposed by SEIU comprise one part of a larger multi-billion-dollar commitment by Sutter Health to replace, improve and construct new physician offices, outpatient clinics and acute care hospital services in big cities and small towns across Northern California. Projects covered under the bond financing application include the following:

• Sutter Gould Medical Foundation, Modesto ($35 million)
  For a new medical office building/clinic in Stockton.


• Sutter Amador Hospital, Jackson ($18 million)
  For construction of a new building to house imaging services, a laboratory, a diabetes clinic, a women’s health center, an endoscopy suite and an infusion center, as well as administrative services.


• Mills-Peninsula Health Services, Burlingame ($508 million)
  To build a new 243-bed hospital to replace the existing seismically deficient facility.


• California Pacific Medical Center, Davies Campus, San Francisco ($140 million)
  For seismic retrofitting of the Davies campus to meet California state seismic requirements. The project will allow for expansion of the acute rehabilitation program, renovation of the chapel and kitchen areas and the addition of new MRI equipment.


• Sutter Roseville Medical Center, Roseville ($69 million)
  For a new building to accommodate expansion of the neonatal intensive care unit, and construction of a new facility for acute rehabilitation and ventilator services.


• Memorial Medical Center, Modesto ($20 million)
  For patient care facility construction.

"Despite SEIU's opposition to our efforts to invest in seismic and other facility improvements, we remain committed to completing these and other important projects for our communities and our employees," said Cyndi Kettmann, senior vice president of Public Affairs for Sutter Health. "It's sad to our caregivers that SEIU and its aligned critics are rejoicing over their role in delaying our seismic improvements."

Ironically, SEIU published a report in 2001 called "Hospital Earthquake Safety in California: Why Patients, Hospital Workers and the Public Can't Wait." It criticized attempts to delay hospital construction and asserted that a safe work environment is dependent upon a sound investment in new and improved facilities by organizations like Sutter Health.

"We hope our communities, physicians and employees will hold SEIU directly accountable for opposing our efforts to provide seismically safe facilities for employees, physicians and the patients they serve," said Kettmann.

SEIU has for years been pressuring Sutter Health and its affiliates for concessions to make it easier for the union to attract more members. SEIU has been largely unsuccessful in growing its membership within the network, so it is trying to punish Sutter Health affiliates and the communities they serve.

SEIU bombarded the CHFFA board with pages of old data at the last minute of Sutter's application process. Among the issues raised by SEIU was a request for new guidelines that reassess how bond savings are passed through to consumers.

Sutter Health believes it has satisfied CHFFA expectations related to passing along savings from tax-exempt bond financing to those it serves. In fact CHFFA's own staff carefully reviewed Sutter Health's application for bond financing and recommended that it be approved.

Sutter Health is especially proud of its efforts to make health care services accessible and affordable to those who are most vulnerable financially. As a result of its systemwide charity care policies, Sutter’s annual charity care write-offs alone have more than doubled in just three years, growing from $109 million in 2003 to $226 million in 2005. Sutter Health's total 2005 investment in charity care and community benefit activities was $929 million.

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Media Contacts
Bill Gleeson
(916) 286-6772
gleesow@sutterhealth.org

Karen Garner
(916)286-8297
garnerk@sutterhealth.org