Palm Drive Hospital board OKs nonprofit talks (w/video)

Sebastopol Fire Chief Bill Braga asked the Palm Drive Health Care District board of directors to consider the impact on public safety resources. He said the local fire department responds to an average of three medical emergencies each day. If the hospital closes, first responders will be forced to transport patients to hospitals in Santa Rosa.

"I lose one to two firefighters each time (patients) are transported to Santa Rosa," Braga said. "That would be detrimental to my department. ... On behalf of public safety, I urge the board, please, I urge the board to accept the proposal from the foundation. I think it's the right thing to do."

The special meeting was called to consider two proposals to keep the hospital open. Most of the meeting was spent discussing a proposal submitted by the nonprofit Palm Drive Health Care Foundation, Dr. Jim Gude and former hospital board president Dan Smith.

A second proposal, by Sebastopol orthopedics surgeon Dr. Michael Bollinger, was dismissed because it did not meet board criteria.

At the start of the meeting, hospital officials outlined a number of problems with the foundation's proposal.

In a memo to the board, Palm Drive CEO Thomas Harlan stated that the foundation's proposal did not address the costs associated with the hospital's Chapter 9 bankruptcy process initiated earlier this month.

The foundation plan would use hospital revenue to offset operating losses, Harlan said. But those revenues must now go through the bankruptcy court process, Harlan said. The foundation must come up with new funds to get the plan off the ground, he said.

Smith rejected the claim that current hospital revenue could not be used to continue operations at Palm Drive. Smith, who worked on the hospital's 2007 bankruptcy, said the board could even choose to put the current bankruptcy proceedings "on hold."

Harlan's memo states that the management agreement between the district board and the foundation will likely require approval by state regulators. That review process will take more time than a week, Harlan stated.

Another objection dealt with possible conflicts of interest among the executives listed in the foundation's proposal — primarily Gude, the proposed CEO.

Gude currently has a professional agreement to, among other things, serve as the hospital's ICU medical director, provide telemedicine services for certain specialties and combined physician services 20 hours a month. Gude is paid a maximum of $10,900 a month for these and other services.

During the meeting Wednesday, Gude said he would gladly bow out of the bid to be the CEO of the proposed management team.

By the end of the meeting, it became clear that several board members had serious concerns about the foundation proposal. Nancy Dobbs said the issues raised by hospital administration were not simply "details" that could be easily worked out and she could not support the proposal.

After the meeting, Dobbs said an agreement could be possible in the future, but not in time to keep the hospital from closing Monday.

"The points of concern in the proposal are too many to be worked out before the 28th," she said.

Board member Jim Maresca offered up the resolution for the board to enter into negotiations with the foundation. That motion was approved unanimously only after Dobbs proposed a "friendly amendment" that stated hospital officials would continue with current closure plans.

Crane, the emergency department doctor, said he was disappointed that the board "didn't accept an excellent proposal outright."

Asked what he intends to do if the hospital closes on Monday, Crane said, "I've got a shift on the night of the 29th and I plan on being there."