Will Mayor Lee finally get tough with CPMC?

CPMC wants to build a lucrative luxury hospital without guaranteeing a hospital relied on by the poor will remain open.

It's gut check time for Mayor Ed Lee, and time for him to show whether he works for the people of San Francisco or the corporate interests that he's spent most of his time in office catering to.

As California Pacific Medical Center refuses to guarantee that St. Luke's Hospital will remain open as a condition of building the Cathedral Hill Hospital that the health care giant wants to build, the question now is whether Lee will stand firm on his support for St. Luke's, a hospital relied on many low-income San Franciscans.

For years, CPMC had refused to do right by San Franciscans, and Lee finally rolled over to pressure from downtown and the building trades in March when he approved a bad deal that lets CPMC shrink St. Luke's to just 80 beds and a guarantee of just 20 years of operation with escape clauses that could let the corporation close it even sooner.

Now, that deal is rapidly falling apart as CPMC shows itself to be an untrustworthy and arrogant health care partner angling to close St. Luke's even sooner – even holding a press conference yesterday to announce its unwillingness to give any more, essentially taunting Lee into stiffening his spine.

Lee's mayoral tenure has been based almost entirely on promoting private sector job growth, from the business tax exclusion that he granted to Twitter and other mid-Market businesses to a business tax reform proposal that wides the tax base without bringing in new revenue to cutting deals with the Warriors and Americas' Cup.

But the one aspect of corporate deal-making that seems to elude Lee is the need to be tough negotiator, which means being willing practice brinksmanship or to just say no if its not a good deal for the people of San Francisco. Clearly, he got rolled on the CPMC deal, and now the corporation is showing it understands how to play hard ball.

Do you, Mr. Mayor?


is old and too small to provide cost-effective care. It would be better for CPMC to pay into some equivalent of the "affordable housing fund" rather than build, run or maintain a hospital that is bound to lose money.

I'm sure a deal will be worked out but I'm not clear whose interests are being served by having an inefficient unsustainable hospital just a mile or so from SFGH.

Posted by Guest on Jul. 10, 2012 @ 12:02 pm

St. Luke's has historically been an important part of the Mission's healthcare. Taking it away from the Mission would almost certainly worsen the health of those who live nearby and rely on St. Luke's.

Posted by Guest on Jul. 11, 2012 @ 9:59 am

Ed Lie is playing hardball the way that all Democrats play hardball--by attacking the Democrat party base.

Posted by Guest on Jul. 10, 2012 @ 1:03 pm

It's like a Central American/Russian refugee camp inside. What misery - ugh. I switched to a boutique medical firm right after my first visit there and I have never looked back.

Posted by Troll II on Jul. 10, 2012 @ 2:13 pm

It doesn't agree with your obviously racist sensibilities, so we should let it close? Doesn't the fact that this scene exists in San Francisco indicate a dire need for it? Where would you prefer these groups go for medical attention?

Posted by steven on Jul. 12, 2012 @ 2:13 pm

I agree with you, CPMC appears not to be acting in good faith.
and I agree with you, I hope that Lee plays hardball with them. CPMC must have sunk millions and millions of dollars into the planning of these hospitals and the negotiations, and all that stuff, and I find it hard to believe that they will just say screw it and walk away from a deal.

But, what if they do? What does that do to the state of healthcare in SF? What is the City's back-up plan then, when we have a bunch of hospitals not in compliance? and doesn't the loss of all the related money CPMC is going to invest in SF, be it for affordable housing, street beautification, etc etc going to sting?

Posted by DanO on Jul. 10, 2012 @ 2:34 pm

I had the same questions. If the deal collapses, do the hospitals just close shop? I think CPMC has Lee by the balls on this one.

Posted by The Commish on Jul. 10, 2012 @ 2:49 pm

Brisbane, who almost tempted Twitter away from us. It's 10 minutes by car or ambulance, could run shuttles to CalTrain and BART, and they would save millions in taxes and fees.

In fact, every major employer has SF by the scrotum, which is why we throw tax breaks at them to stay here.

Luke's is too small to be viable.

Posted by Guest on Jul. 10, 2012 @ 3:18 pm

CPMC made $180 million in profits in San Francisco last year, they aren't simply going to walk away. As you said, they've invested millions on this project so far, they aren't going to just kiss that goodbye. But let's say they did, simply out of spite against San Francisco, totally close up shop here. Don't you think some other health provider would fill that void? We're constantly criticized on this blog for not having enough faith in the free market, so why don't you think that market forces would ensure that a city the size of San Francisco has enough hospitals to serve its population? And if that didn't happen, then perhaps the city would need to finally start taxing its wealthiest citizens and corporations enough to build another General Hospital to serve its citizens.

As for the merits of this project and CPMC's supposed largesee, the only mitigation money this corporation has offered has been to offset the project's impacts, and even then many analysts don't think it does. No project, no impacts, next issue. There's no reason to always assue that the world-class city must simply take whatever it's being offered by big corporations.

Posted by steven on Jul. 10, 2012 @ 4:12 pm

There's nothing wrong with playing hardball - corporations do it with one another, the government and their customers all the time.

Posted by Troll II on Jul. 10, 2012 @ 4:57 pm

but I'm also 100% for thinking about the "what if's" if you end up striking out while playing hardball.

The way SF treats development in the City is pretty harsh. The hurdles that need to be jumped through are never ending, and then if you do make it through the gauntlet, there is always someone else ready to piss on everything. I'm sorry if I don't naturally think that healthcare providers are going to simply line up to build in SF should this deal go down in flames. They see the disaster this process has been for Sutter, think they are dreaming about going through the same thing? Yeah, Steven, the free market will be at work, and people might prefer the market someplace else. And when it comes to healthcare, the City being left high and dry isn't an option in my book.

But fuck it. We'll just tax the rich and that will solve all of our problems.

(that all said, I still think the CPMC deal gets done, and no matter what concessions are made, even a guarantee to leave St. Lukes open in perpetuity, people are going to bitch because they didn't get 100% of what they wanted. It is tiresome)

Posted by DanO on Jul. 11, 2012 @ 7:25 am

The city says it's going to play "hardball" but as soon as the guys with the money slap them down, the city capitulates. And good thing too, or nothing would ever get built, which of course is what the Hestor/Welch/Redmond brigade want.

So there'll be thunder and lightning and vitroil, and then the hospital will get built anyway. Money talks.

Posted by Guest on Jul. 11, 2012 @ 7:57 am

Only places which are truly NOT world class talk about how "world class" they are.
SF needs to stop counting the back teeth on its gift horses when every single surrounding county would kill to have half the proposal that SF has now. You can't force a company to maintain a losing proposition in perpetuity.

Posted by Greg on Jul. 10, 2012 @ 5:34 pm

WTH makes the proposed Van ness hospital a "luxury" hospital??
Is anything which is not a run down dump overrun with insane homeless people crapping in every corner considered "luxury" ?

Posted by Greg on Jul. 11, 2012 @ 6:13 am

Steven, a little late commenting, but I find it somewhat disingenuous to continue naming 'CPMC' as the villain here. The true architect behind this shell game is the rapacious Sutter Health Corporation. This 'non-profit' organisation has multiple CEO's making million dollar salaries. Reviewing the struggles of Marin General Hospital to extricate itself from their grip is instructive. For example, an editorial in the North Bay Business Journal, 7/30/2010, reports the following. Between 2002 and 2009 Sutter moved a combined 648 Million dollars out of Marin General and CPMC/SF. It justified this by stating that it is company policy to "move dollars from one entity to another based on need". It should therefore be normal practice to subsidise St Lukes, if necessary, by moving funds from one of it's more profitable operations. Follow the money.

Posted by Patrick Monk RN on Jul. 13, 2012 @ 9:19 am

That comment by itself tells us nothing about whether the company's behavior is good or bad.

But it is quite routine for business entities to move funds and assets around for optimal performance. That's hardly unusual either.

Posted by Guest on Jul. 13, 2012 @ 9:49 am

With all the shouting going on about  care crisis, many are probably finding it difficult to concentrate, much less understand the cause of the problems confronting us.

Posted by daily fitness on Dec. 15, 2012 @ 1:52 pm