Supes allege whistleblower documents show CPMC lied about financials

Mike Koozmin/The S.F. ExaminerBoard of Supervisors President David Chiu along with Supervisors Malia Cohen and Christina Olague held a press conference showing what they claim are documents given to them by a whistleblower.

Mike Koozmin/The S.F. ExaminerBoard of Supervisors President David Chiu along with Supervisors Malia Cohen and Christina Olague held a press conference showing what they claim are documents given to them by a whistleblower.

One day after Mayor Ed Lee and California Pacific Medical Center hailed a $2.5 billion deal for two new seismically safe hospitals, financial projections showed the chain eventually triggering an escape clause that lets it shutter one hospital.

On Monday Board of Supervisors President David Chiu said the “startling revelations” could let CPMC  close St. Luke’s Hospital by 2020, just five years into its 20-year development agreement.

Four members of the board say an anonymous whistle-blower came forward with the documents. Chiu and others said the materials contradicted official statements that CPMC would only leave St. Luke’s in an unlikely financial catastrophe.

“Sutter Health has had a long history of troubled dealings with other Bay Area communities,” Chiu said of CPMC’s owner. He said the new information showed “a breach of faith and trust” and called for a third-party analysis of company finances, “ironclad guarantees” for St. Luke’s future and other aspects of the deal, and an extension of the approval timeline.

The deal, which also includes a major new hospital on Cathedral Hill, lets CPMC abandon St. Luke’s if its operating margins fall below 1 percent for two straight years. The documents project margins falling to -2.9 percent in 2018 and -3.4 percent in 2019.

But a CPMC spokesman discredited the documents as outdated and inaccurate.

Spokesman Sam Singer said the discarded projections “were never part of the consideration process of keeping St. Luke’s open.” He stated that they were probably stolen from the trash and said they were sent to the hospital about a month ago along with an “extortion-style” letter threatening to “expose” them.

“This is San Francisco, so sometimes the best news actually does come out of a Dumpster, but that does not make it verifiable nor does it make the data real,” Singer said.

CPMC saved the failing hospital in 2001 and is investing $300 million to keep it open, Singer said. “It’s not very likely that they’re going to close it five years later,” he said, noting that escape clauses exist in development deals in case “something doesn’t work.”

Chiu and three other supervisors wrote a letter condemning CPMC’s unwillingness to share financial information with the board, which must approve any such project. They also criticized its charity care contributions under the new deal.

Supervisor Malia Cohen said that while everyone agrees about the need for new seismically safe hospitals, the board needs accurate financial information to make an informed decision.

Spokeswoman Christine Falvey said the mayor hopes to reach a new deal that ensures St. Luke’s survival.

aburack@sfexaminer.com

Bay Area NewsCrimeCrime & CourtsDavid ChiuLocalSt. Lukes Hospital

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