While news of a $10 million Sutter Health grant to support community clinic services in Marin is welcome news for many, Sutter critics remain skeptical of the not-for-profit healthcare corporation and its motives in Marin.

Late last month, the Marin Community Foundation (MCF) announced a partnership with Sutter to provide $10 million over five years to increase the availability of healthcare services in the county for residents who are uninsured or have no health insurance. Those residents rely on the county's network of health clinics for care. They also, like many underinsured and uninsured across the country, often find themselves forced into relying on the emergency room for primary care.

The grant will establish the Sutter Health Access to Care Fund. It will be one of MCF's donor-advised funds. Donors include nonprofit organizations, individuals and for-profit businesses. They consult with the foundation about how funds should be allocated. In the case of the Sutter Health fund, says Thomas Peters, MCF president and CEO, "Sutter is keeping an arm's-length distance. They want to be advised about potential distribution recipients. But in the end, they were very clear." What they were clear about is that Peters and the foundation should take responsibility for making final decisions concerning where the fund money goes.

After consulting with Sutter, the county health department and other community health services providers, Peters has the last word on the destination for the funds, which the foundation will distribute in $2 million portions over the five years. "This particular donor specifically asked me to sign off on the plan."

That distinction carries weight because of the history of Sutter in Marin. For more than two decades Sutter and the Marin Healthcare District have been locked in a struggle for control of Marin General Hospital. Back in 1985, the Marin Healthcare District hired Hank Buhrmann as CEO. Buhrmann came to Marin with a reputation as a savvy administrator capable of navigating the turbulent world of healthcare delivery. Stocks were soaring; so were costs for healthcare. Community hospitals across the country were fretting over their finances. To the district, Buhrmann represented the kind of manager who had the business acumen to cope with the financial troubles caused by falling reimbursement rates and uncertain cash-flow charts.

Buhrmann proposed that the healthcare district lease the hospital to a new entity called the Marin General Hospital Corporation, which Buhrmann created with the help of attorney Quentin Cook, whom Buhrmann had brought along as attorney for the district. The healthcare district's elected board voted to lease the hospital to Buhrmann's new entity.

That action, while arguably a smart move to deal with a probable financial crisis for Marin General, triggered harsh opposition from critics who said the deal essentially gave away a public asset and hid its operating procedures from public scrutiny.

Through a series of circumstances, Marin General ended up leased to Sutter Health. But a state requirement to seismically upgrade hospitals was the wedge that critics found useful to end the lease arrangement they had decried ever since Buhrmann set up that first deal. Sutter said it would invest the hundreds of millions of dollars needed to upgrade Marin General, but only if the healthcare district would agree to extend the lease, for what critics called in perpetuity.

The fight continued long and loud, spilling into elections for board seats, rancorous sessions at public board meetings and charges of wrongdoing flung by both sides. Sutter and the healthcare district eventually agreed to an early termination of the lease, provided Sutter would no longer be on the hook for the seismic upgrade. Sutter will hand over the keys to Marin General at the end of June. It also means Sutter no longer will have a major acute-care hospital in Marin, although it still has Novato Community Hospital. And the healthcare district will have to raise money to build a new wing at the hospital to meet seismic standards.

In a recent full-page ad in the San Francisco Chronicle, Sutter made a pitch to Marin residents in an open letter to the community. "Looking Back, Together We've Accomplished So Much" proclaims the headline. Included in the copy is this statement: "We are proud of the significant investments made in MGH and this community since affiliation and proud of the significant improvements in quality of care and clinical offerings. One example is the Marin Cancer Institute."

While few would argue that providing outstanding cancer care is a bad thing (the institute received recognition in 2008 from the American College of Surgeons), the notion that Sutter has made "significant investments" raises eyebrows among its critics. They still smart from the news that the corporation has withdrawn $120 million in profits from Marin General since 1995. Sutter transferred $49 million in profits in 2008, just a year after taking $39 million.

Some critics say the $10 million Sutter Health Access to Care Fund should be named in honor of Marin General, where Sutter has made such a tidy profit. Sutter says it has used that money to benefit other facilities in the 100 California cities and towns in which Sutter provides care. Though the arrangement is not unusual in a healthcare system, critics say the company has taken the arrangement too far in Marin.

District board member Larry Bedard, M.D., also calls into question Sutter's lack of a funded depreciation account for Marin General. When the hospital joined the Sutter system, Bedard says, about $830 million in funded depreciation existed for hospitals in the Sutter system. But all that money is on the books for Sutter hospitals other than Marin General, leaving the hospital no on-the-books money to cover depreciation of assets.

Bedard called for the private operating board of the hospital to halt or at least stem the outflow of funds from Marin General. Assemblyman Jared Huffman took note of the situation and asked the private board of the hospital for information that would explain how and why its members were making decisions regarding the healthcare district's interests and Sutter's interests. The board rebuffed Huffman.

The criticism that Sutter could have withdrawn less money from Marin General and used it to fund a healthcare initiative in Marin has merit. But Martin Brotman, M.D., president of Sutter Health West Bay Region, says that's what Sutter is doing with its partnership with the foundation. "This grant is part of Sutter's community benefit program." For the past few years, he adds, Sutter has been examining where the greatest needs exist for grants in various communities and decided that supporting community clinics holds the greatest benefit. "With more and more people underinsured and having no insurance, the clinics are going to be called on more and more--or the alternative is going to be patients going to emergency rooms, where they can't get preventative care and follow-up care very well."

Brotman says he talked with a number of community leaders in Marin who explained their "budget problems and their difficulty" in determining budget cuts to meet the new economic reality. After talking with the community leaders and healthcare providers, Brotman went to Sutter President and CEO Pat Fry and recommended that the company "should make a multi-year grant to community clinics and do it through the Marin Community Foundation." The choice was obvious, says Brotman, because the foundation "has a superb track record in knowing how to allocate funds, they are totally trustworthy and they have made grants to community clinics for years."

The grant in Marin is remarkable in that it's the largest single grant Sutter has given to any community as part of its grant program. Brotman says other grants are in the neighborhood of $2 million to $3 million.

And, says Brotman, the grant program for community health could well continue in Marin, in part because Sutter is turning over Marin General to the healthcare district in a matter of months. "That transition has got to succeed. We really have got to develop a new working relationship with the district." Marin General has been an important Sutter link in providing community health benefits to Marin residents. Sutter viewed providing care for Medicare and Medi-Cal patients at Marin General as an accepted obligation. "That won't be our hospital to provide that kind of care in the future. If we are to sustain our commitment to the community we are going to have to do it in a different way." The Health Access to Care Fund is that different way.

There's little doubt that an infusion of $2 million a year for however long is welcome in the community health services system in Marin. "A vibrant, nonprofit system of accessible healthcare is a critical piece of our county's overall health system, and this is exactly what the Sutter health initiative will address," says Larry Meredith, M.D., director of the Marin County Department of Health and Human Services.

Peters, who has an extensive background in public health as well as his experience at MCF, says, "When you have a county in which many are struggling and where four of every 10 people do not receive health insurance from their employer, it's clear that the need for quality, affordable and culturally appropriate healthcare is greater than ever."

While virtually no one, not even Sutter critics, would turn away from the grant money, the critics say it's an unabashed public-relations ploy that belies the true intent of the healthcare giant. Sutter has been acquiring property and opening doctors' offices in the months leading up to the transition of Marin General.

"We hope that Sutter's plans for the development of property will be complementary and not competitive with Marin General Hospital," says, Marin Healthcare District CEO Lee Domanico.

Brotman makes no bones about intentions. "Sutter is here to stay in Marin." But, he adds, the company is interested in recruiting doctors and opening ancillary services such as imaging centers and other ambulatory programs that can complement Marin General and the healthcare district. He stresses that Sutter has no intentions "in the foreseeable future" to open an acute-care facility that would compete with Marin General. Sutter doctors and the ambulatory-care programs it brings to Marin should create a symbiotic relationship with Marin General, according to Brotman.

Inevitably, the healthcare district will find itself competing with Sutter for some of those same high-profit revenue-producing imaging dollars and ambulatory-care services. Healthcare district board member Jennifer Rienks is candid: "When they say they are community focused, they are not. They have taken a billion dollars out of their hospitals [in the Sutter system since 1998, and now they are saying they don't have the money to seismically retrofit according to the [state's schedule. They have taken money out of the hospitals and bought physician practices, and property and office buildings and ambulatory care facilities because that's where they see the money is."

Rienks says Marin General and the healthcare district can compete successfully with Sutter by providing a superior patient experience as well as high-level medical care. "We're going to have to work hard. Our whole thing will be that it's time to come back to Marin General. It's going to be your community hospital. You're going to get great care. And whatever revenue is generated is going to be reinvested to meet community healthcare needs."

Contact the writer at peter@pseidman.com.

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