Is a Free Hospital Too Good to be True?

When something seems too good to be true, it usually is. This holds true for the proposal presented by Mills-Peninsula Health Services, an affiliate of Sutter Health Network. Under the proposal it would appear that the Peninsula Health Care District would be getting a $400 million new hospital free. The only cost would be the use of the land owned by the District for a period of 50-years at one dollar per year. Sounds good doesn't it?

Well the truth is that there are many problems in the overall proposal as it has been presented. These include:

1. The original plan called for the use of the front nine acres or District land, Mills-Peninsula now wants to use of all 26 acres. All for the same $1.00 per year


2. Mills-Peninsula wants to add a 145,000 square foot medical/administration building that would house medical and administration staff associated with the hospital. Not a bad idea at first glance. The problem is that they also want to keep all the revenue from the leases, giving none back to the District.


3. The use of District land to secure to loan to build the hospital. This could be a problem that would make it next to impossible for the District to terminate the agreement with Mills-Peninsula if problems arise in the future.


4. Mills-Peninsula proposes that the District reimburse them for the last 25 years of the 50-year lease for any non-depreciated capital improvements. With no revenue and no rent going to the District, that would become an impossible request. One that would leave the District vulnerable to losing the 26 acres of land and the hospital at the end of the lease.


5. Possible elimination of core services if they can show it is not self-supporting, is less than 4% of gross revenue, or can be provided elsewhere.


6. There is a chance that Mills-Peninsula will want to use, or sublet, the District land for other than medical related uses. The contract should forbid other uses without a vote of the taxpayers.


7. Mills-Peninsula has the right to downsize the hospital by 25% at any time before construction begins. This should be required to back to the voters for approval.


8. What safeguards are going to be to implemented to insure that Mills-Peninsula does not become a private health care provider such as Kaiser, and that they always take Medicare and Medical patients.


9. As a private room hospital, what arrangements are going to be made with insurance providers to insure that the residents of the District are not going to be faced with having to pay the difference in cost.


10. What safeguards are going to be in the agreement to protect District funds and future tax revenue? Do we really want the District to subsidize the hospital?


11. Conflicts between Mills-Peninsula and the District are required to go to arbitration using an independent arbitrator. The San Mateo Board of Supervisors should act as final arbitrators.

Let me remind you that the costs associated with the project breakdown as follow: $281.4 million for the hospital, $65.6 million for the administration building, $21.3 million for the parking structure, and $31.9 million for site work, demolition, and landscaping.

With all of these questions unanswered, how are the citizens of the District going to be able to make an intelligent decision at the voting booth? We need full disclosure on the terms of the agreement, and how the District is going to deal with the payback at the end of the lease.

Make sure you know the facts before you vote for a free hospital. Nothing in life is free.

- Written by Dan