Brown urged to investigate hospital giant

Chris Rizo Aug. 28, 2009, 8:44pm

Jerry Brown (D)

SACRAMENTO, Calif. (Legal Newsline)-A group of Democratic state lawmakers is urging California Attorney General Jerry Brown to investigate Sutter Health over its business practices.

The letter Wednesday from 13 state legislators specifically asks Brown, a Democrat, to investigate claims that the hospital company has a pattern of using profits from public and private safety net hospitals to its own benefit in its operations throughout the San Francisco Bay Area.

"As the attorney general and the state's highest ranking law enforcement officer, we are asking you to immediately investigate alleged misrepresentation of hospital finances, economic and medical redlining, abuse of nonprofit status, antitrust violations questionable allocation of public assets and execution of contracts that may be in conflict with existing law by Sutter Health and its network of affiliates and subsidiaries," the letter says.

Lawmakers allege, among other things, that Sutter Health has a pattern of closing community hospitals where they either own or plan to open so-called boutique hospitals.

In San Francisco, for example, lawmakers say Sutter has proposed shrinking St. Luke's Hospital, which serves a large underserved population in the city, to one-third its current size, while "concentrating profitable specialty services at a new high-rise medical destination hospital in a more affluent part of time" and cutting back on Medicare and psychiatric services.

Those signing the letter included state Sens. Ellen Corbett, D-San Leandro; Loni Hancock, D-Berkeley; Mark Leno, D-San Francisco; Patricia Wiggins, D-Santa Rosa; and Leland Yee, D-San Francisco; in addition to Assemblymembers Tom Ammiano, D-San Francisco; Jim Beall Jr., D-San Jose; Wesley Chesbro, D-Arcata; Joe Coto, D-San Jose; Noreen Evans, D-Santa Rosa; Mary Hayashi, D-Castro Valley; Jared Huffman, D-San Rafael; and Nancy Skinner, D-Berkeley.

"I am asking the attorney general to investigate their practices and protect the health and welfare of our citizens," Corbett said in a statement. "I am grateful so many of my colleagues have joined in my request; it shows that many members of the legislature are concerned about Sutter's actions in communities throughout the state."

From Legal Newsline: Reach staff reporter Chris Rizo at

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