Community hospital biting the dust

(My church asked me to write what follows for its newsletter. Unfortunately, this tale of the downfall of a community hospital founded to do good works, but unable to meet the demands of the market, is all too common.)

St. Luke's Hospital may soon cease to provide inpatient care for charity patients if current disturbing trends continue. The San Francisco Mission District facility was founded by a rector of St. John the Evangelist parish in 1871. Until 2001 it operated under various nonprofit legal umbrellas in close connection to the Episcopal Diocese of California.

Huge deficits then forced the Diocese to turn St. Luke's over to Sutter Health, a profitable, nominally nonprofit, hospital chain. At the time of the transition, both Episcopal Bishop Bill Swing and the state Attorney General Bill Lockyer insisted that Sutter agree to provide large amounts of free and reduced fee service to sick persons who could not pay.

As the expiration date for these agreements approaches, Sutter has begun to cut its losses, closing the inpatient psych ward in August and discussing further cutbacks of subacute and nursing services. Sutter is merging St. Luke's into its California Paific Medical Center (CPMC); the boards of the two institutions have approved, greatly diluting the influence of St. Luke's historic culture of charity care in the body that now governs it. Hospital staff fear that under CPMC only a shell of the present St. Luke's will remain, perhaps an emergency room and some lucrative outpatient clinics. Persons without good insurance are likely to be shunted to the already overloaded, county-run San Francisco General.

Doctors, hospital workers, Mission community groups, and local politicians have all been trying to ensure that St. Luke's continues to serve its neighborhood. See one such rally here. Our rector, Fr. John Kirkley, and members of the Saint John the Evangelist vestry have testified against the threatened closures at city hearings.

St. Luke's troubles are a by-product of our society's subjecting medicine to market mechanisms that force all enterprises to turn a profit, even if they are providing socially vital benefits to the community. The hospital can't become profitable or even break even: it is too small, lacks high tech equipment, needs earthquake retrofitting, and willingly treats Medical patients for whom the State does not even pay costs. Care for the sick is simply something that can't be treated as a commodity unless we, as a society, are willing to say that the poor just don't get to use doctors and hospitals.

Although nominally nonprofit, Sutter Health has a very poor record of community service. Sutter spent only 0.6% of its 2002 revenues on charity care -- 40% less than the California statewide average for private hospital companies. In 2003, Sutter reported total patient service revenues of $4.506 billion, and profits of $465 million.

CPMC is cut from the same cloth: The San Francisco Department of Public Health recently reported that Sutter's largest hospital, California Pacific Medical Center (CPMC), enjoyed more than $61 million in tax breaks during 2002, yet provided only $1.5 million in charity care. CPMC provided the least amount of charity care of any San Francisco hospital, even though it was by far the most profitable, earning $136 million in profits.