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CPMC spends far less on poor, S.F. report says

San Francisco Chronical, 12/9/11

By: Jeff Ugai

California Pacific Medical Center, including its St. Luke's campus, is San Francisco's most profitable hospital, yet it spends proportionately far less on care for poor residents than other private nonprofit hospitals in the city, according to a new report.

California Pacific Medical Center and St. Luke's averaged an annual net income of nearly $149 million between 2006 and 2010, almost 12 times the combined annual profit of the other private, nonprofit hospitals required to report to the city the amount of charitable care they provide to indigent and low-income residents.

But the report released Thursday by UC Hastings College of the Law found the hospital, which is affiliated with the Sutter Health network, spends considerably less than other hospitals on charity care when compared with the amount of money received per patient. That's four times less, for example, than St. Francis Memorial Hospital, which is a third of its size, the report said.

Jeffrey Ugai, a third-year law student at UC Hastings who oversaw the report, said he was shocked by the "disparity between the vast financial gains CPMC is enjoying from the city of San Francisco compared to the shockingly low amount of charity care they provide compared to their peers."

The report, which will be presented Tuesday at a San Francisco Board of Supervisors' hearing, comes at a time when Sutter Health is in discussions with the city over its proposed $2.5 billion plans to renovate their hospitals and medical buildings.

The giant hospital network, which is headquartered in Sacramento, wants to build a 555-bed hospital on Van Ness Avenue at the site of the now-closed Cathedral Hill Hotel and replace St. Luke's Hospital in the Mission District with a smaller, 80-bed facility on the site.

Mayor Ed Lee proposed the hospital commit to $108 million in affordable housing payments, transit improvements and other community benefits in order to secure the city's blessings for its expansion plans, but hospital officials called the bid unaffordable.

Kevin McCormack, spokesman for California Pacific Medical Center, accused UC Hastings' report of being biased because it was prepared at the request of community organizations, including the Good Neighbor Coalition and Jobs with Justice-San Francisco, groups that have been critical of the hospital's proposed plans.

"We're proud of what we do in offering care to San Franciscans regardless of their ability to pay," McCormack said.

He said the hospital provided more than $15.3 million in charity care last year, almost three times what it spent in 2007.

In 2007, St. Luke's Hospital, which serves a large number of uninsured and low-income patients in the southeast part of the city, merged with California Pacific Medical Center and became a campus of the larger hospital.

Jane Sandoval, a registered nurse at St. Luke's for 26 years and a union leader, said she was concerned about the plans to build a new 80-bed hospital to replace St. Luke's, which is licensed for 229 beds but staffs only about 130.

"Basically it's not going to be a safety net with the cuts they're proposing," Sandoval said at a news conference Thursday. "It will be more like a tightrope."

The report, "Patients & Profits: The Financial Strength and Charitable Contributions of San Francisco Hospitals," was based on charity care reports submitted to the San Francisco Department of Public Health.

The report: "Patients & Profits: The Financial Strength and Charitable Contributions of San Francisco Hospitals" can be found at:

Charity care compared with patient revenue

The San Francisco Board of Supervisors has called on hospitals to spend at least 3 percent of the money they receive for seeing patients, or net patient revenue, on care for the poor and uninsured. The following five private, nonprofit hospitals are required to report charity care expenses to the city.

Hospital    Net patient revenue*    Charity care costs*    Ratio of charity care to patient revenue
St. Francis Memorial Hospital    $175 million    $7.75 million    4.43%
St. Mary's Medical Center     208 million    6.1 million    2.95
Chinese Hospital    96 million    345,350    0.36
California Pacific Medical Center    1 billion    12.4 million    1.14
St. Luke's (CPMC)    112.2 million    4.2 million    3.77

* 2010

Source: UC Hastings College of the Law's Community Economic Development Clinic

E-mail Victoria Colliver at

This article appeared on page C - 1 of the San Francisco Chronicle

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