Healthcare, Money & Power in San Francisco: The Community Battles CPMC

by Carl Finamore on April 6, 2011

Unstoppable is a 2010 action thriller featuring Denzel Washington putting the brakes on a runaway freight train barreling down the tracks at top speed towards helpless communities. That’s exactly what’s happening to some of San Francisco’s underprivileged neighborhoods says a coalition of 50 community, labor and healthcare advocates. We are being railroaded by California Pacific Medical Center (CPMC),” San Francisco District 11 supervisor John Avalos told a April 5 morning protest rally on city hall steps.

CPMC has four hospitals in the city and is its second largest private employer with 6000 employees and 1200 staff physicians. It is owned by Sutter Health, another huge operation. It is northern California’s largest and most profitable medical chain.

This powerhouse of wealth, money and power is forging full speed ahead to build a modern mega-hospital featuring high-end specialty procedures while downsizing St. Luke’s Hospital that has long been a critical care provider to its adjacent poorer neighborhoods swelling with uninsured and under-insured.

Not surprisingly, there are lots of powerful supporters who see big advantages in the budgeted $2.5 billion CPMC hospital expansion that intends to employ 1500 construction workers as one of its immediate benefits.

Nonetheless, say critics, unless there are substantial changes, the community is paying too high of a price.

For example, Sutter overall has often been accused of reducing services for the underprivileged and they operate no differently in San Francisco. “Many people are concerned that CPMC has one of the worst records of serving the poor in this city,” said Nella Manual, a Medi-Cal patient. “Despite record profits, CPMC has the lowest record of serving us.”

In fact, Sutter’s profits did jump 30% last year.

And, according to a statement by the Tenderloin Neighborhood Development Corporation (TNDC), while around 75% of St. Luke’s patients are underprivileged receiving some sort of government help, only seven percent of “CPMC’s other three city hospitals serve low-income patients on MediCal.”

Give Me Your Money or Your Health

Therefore, downsizing St. Luke’s is viewed by many as imperiling balanced and diversified city health services.

For example, Brenda Washington of the Central City SRO Collaborative is a breast-cancer survivor who has fears because of Sutter/CPMC’s “lousy record of not working with the uninsured like me.”

“It spends among the least of its competitors for what it terms charity care, that is when the hospital pays the costs of services. They only spend around 1% of their revenue for charity care patients while the smaller St. Francis neighborhood hospital, for example, spends closer to 4% of revenue,” TNDC organizer Steve Woo told me.

But Kevin McCormick, spokesperson for CPMC, strongly disagrees. “One of our top priorities is to serve the poor. We actually give more dollars to community benefits than other hospitals in the city and yet we still get criticized.”

But this is misleading according to Woo.

“Of course they spend more in total dollar amount. It’s because they take in the largest revenue by far in San Francisco where they enjoy one-third market share. Based on the amount of revenue CPMC makes off patients, they should be able to give back much more to the poor for safety net services,” Woo concluded

Protestors also point out that Sutter/CPMC should be particularly conscious of their social responsibilities because their non-profit status exempts them from any federal, state or municipal taxes. As a result, the charter of all non-profits requires they “serve the public need.”

“OK, let’s look at their history,” a dubious Bob Hernandez exclaimed when I informed him of CPMC’s self-assured defense of their record serving the disadvantaged. Hernandez has been around a long time and currently serves as chairperson and board member of several community-service organizations in San Francisco’s low-income neighborhoods.

“Several years ago they first tried to close St. Luke’s because it wasn’t economically viable enough for them. Then, under community pressure, they decided to keep it open. But, at the same time, they began vastly reducing healthcare services.”

McCormick countered by telling me that “we are not actually donwnsizing St. Luke’s at all. The average number we have in there is around 40 acute patients on any given day and now, once our retrofitting is complete, it will have double that capacity with 80 beds.”

“The truth is,” Hernandez said, “they have cut and cut services over the last several years so that, of course, fewer needy patients come to the hospital – fewer services, fewer patients. They can do the math.

“Accordingly, they now claim with a straight face that St. Luke’s doesn’t need to have the 220 or so beds it has traditionally offered to the community.”

But McCormick was undeterred “We are being accused of being a boutique hospital and then at the same time we are accused of forming a mega hospital. In fact, our larger Cathedral Hill hospital once constructed will provide a variety of services that will serve many different needs of our diverse community and that includes low-income patients who we will always continue to serve,” he emphasized to me.

“On the contrary, CPMC doesn’t want to pay for robust services at St. Luke’s,” Supervisor Avalos told me. Instead of concentrating most services into one specialty hospital, “we need to disperse health care services throughout the city in a more balanced way.”

Hernandez summarized the feelings of a lot of people I spoke with today:

“They claim they are losing money at St. Luke’s but if Sutter’s emphasis is on the bottom line then they will only introduce services that favor their profits and these are not necessarily what the neighborhood needs. Planning at St. Luke’s needs to be guided by the actual medical and healthcare needs of their patient population and not driven by profits, of which they have plenty already.”

Bigger is Always Better

A standing argument for growth always mentions the tons of money it generates for the economy. “We have the support of many unions for our expansion project,” McCormick proudly told me.

But Interim President of the National Union of Healthcare Workers (NUHW), Sal Rosselli, described to the rally the shared problems of both patients and workers that this particular development plan raises.

“CPMC has not only backed away from its commitments to ensure accessible service at St. Luke’s and to keep it viable for community residents, it has also reneged on commitments to its own workers. They cut health insurance coverage, gutted seniority provisions and asserted their right to subcontract jobs without proper guarantees of comparable job placement in the other hospitals they plan to build.”

Ian Lewis, representative of hotel workers Local 2, UNITE-HERE, and a Jobs with Justice member, spoke in the same vein. “CPMC runs roughshod over our neighborhoods, calculating them as profit centers and investing only if and when it serves their bottom line.

“Then, they not only deny labor representation to current union members who will transfer to their planned new hospital, they also refuse to agree to San Francisco’s card-check policy for all the permanent jobs that would allow employees to more freely express their opinion on union representation.”

These issues do not even exhaust all the concerns expressed at the rally but they do fully indicate how deeply distrustful many people are of extremely large corporations that retain control of our healthcare system.

Can you blame them?

Carl Finamore is Machinist Local Lodge 1781 delegate to the San Francisco Labor Council, AFL-CIO. He can be reached at

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