The Alameda Health System operates three major hospitals including Highland Hospital in Oakland. Credit: Pete Rosos

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It has been a tumultuous year for the Alameda Health System, the county’s public hospital authority. The pandemic thinly stretched the system’s resources over the summer, and in October, AHS health care workers went on strike for five days after warning that they didn’t have adequate personal protective equipment. Employees claimed AHS’s board of trustees was failing to hold hospital executives accountable for mismanaging the pandemic response and an ongoing labor dispute.

In October, Alameda County’s Board of Supervisors voted to remove the entire AHS board. The system’s CEO resigned shortly after. Even with doses of COVID-19 vaccine now on hand to protect many frontline employees, AHS faces a tough year ahead as the pandemic worsens and the hospital system’s budget problems deepen.

Last Wednesday, AHS’s new Board of Trustees, now comprised of four new members and four members returning from the old board, all recently appointed by county supervisors, held its first meeting. On the agenda: the pandemic, budget woes, the search for a new chief executive officer, and the need to resolve the still-ongoing labor dispute with its unions.

“I’m hoping to achieve a couple of things,” Jeanette Dong, a new AHS board member and director of recreation and human services for the City of San Leandro, said during the meeting. “One, to resolve the labor dispute and settle the contract. Number two, develop positive relationships with labor and the greater community, including the [county] Board of Supervisors.”

A more fundamental question looms over all of these challenges: who should run the Alameda Health System going forward?

A unique way of running things

Alameda County’s public hospital system, which began operating in 1864, went through a dramatic change twenty years ago. For decades, the county had been in charge of running AHS, then called Alameda County Medical Center. In 1998, the health system transitioned to what’s called a “hospital authority” model, allowing it to run largely independently. 

According to a 2009 analysis by the California Healthcare Foundation, this change made AHS more nimble and competitive. For example, under the old system of county control, hospital executives couldn’t bid for lower prices because they didn’t have purchasing authority. And they couldn’t recruit top-tier medical professionals because hospital salaries couldn’t exceed those of other county workers.

Since 1998, AHS has been governed by its own board, which is appointed by county supervisors. AHS’s board has the power to hire and fire the hospital system’s CEO and administrators, who are in charge of hospital management, financials, and patient care. When this new system was adopted, AHS was the only public hospital system in California operating under this “unique” governance model, according to the analysis.

But while the health system enjoyed periods of profitability, it has struggled in some years, and recently it lost about $31 million between October 2019 and October 2020. The financial difficulties AHS is facing were complicated by the recent labor strike, which cost AHS an estimated $10 million. Workers represented by SEIU Local 1021 have been in contract negotiations for nearly a year, and California Nurses Association contracts have been in limbo for more than two years. Meanwhile, the system continues to feel the pressures of the pandemic; last Thursday, more than 20 COVID-19 patients in the emergency department at Highland Hospital waited for beds in the intensive care unit, according to an AHS physician.

Now, members of SEIU 1021, which represents 60,000 workers across Northern California, including nurses and other staff at AHS’s four hospitals and smaller facilities, want the county to take back control of the county health system.

John Pearson, an emergency room nurse at Highland and Alameda Health System union chapter president, said the current model allows AHS administrators to operate the system as if it were in the private sector, and not a public safety net with an obligation to care for everyone in the county, especially low-income people and those without health insurance.

The health system is “publicly funded, and its mission is to care for the public, so we’d like to see this apparent in the governance structure also,” said Pearson.

Pearson also said the health system’s administration and trustees haven’t supported frontline health care workers and have allowed patient care standards to decline, citing the recent decision by administrators and former trustees to discontinue an intensive outpatient program for county residents with serious mental health needs. Health workers at AHS have been advocating to keep the program open. The new board will discuss the program next month.

The health system’s past board chair reflects on options for its future

Dr. Noha Aboelata served as an AHS trustee for two years. She was the board’s chair before she resigned in November with the rest of the then-board, at the county’s request. Aboelata said the fact that AHS runs itself, under the “hospital authority” model, has been good for the health system and the people it serves. 

“It offered the best balance between public values and private practices, and speed and flexibility,” said Aboelata. The older model was “too bureaucratic and too cumbersome,” she said.

At the start of the pandemic, health workers at AHS and other hospitals across the East Bay documented serious problems with obtaining enough personal protective equipment, or PPE. Aboelata said AHS’s then-trustees took these concerns seriously and investigated, establishing a COVID-19 task force that met weekly, then bi-weekly. These investigations, largely conducted by the county, showed that AHS had adequate supplies of PPE by early May, though there had been a “scary start” to the pandemic in March and April when hospitals had to ration supplies and instruct staff to reuse face masks and other protective supplies.

Aboelata noted that no significant COVID outbreaks have occurred at AHS’s skilled nursing facilities. “If you look at our skilled nursing facilities that serve some of the most vulnerable people in our county, they have five-star ratings,” said Aboelata. “They’re not experiencing some of the horrific outcomes other skilled nursing facilities have faced [during the pandemic]. In a lot of ways, I think AHS has been exemplary in this fashion.”

Aboelata said she first learned that AHS health workers planned to strike in October from county supervisor Wilma Chan, and that she was not contacted by union representatives until after a vote to strike was finalized. “The message the union seemed to have was that the only resolution was for the county to take over the system,” Aboelata said.

Alameda Health System workers went on strike for five days in October. Credit: Sara Kassabian

The previous board was already looking into possible changes in how AHS is governed. At a retreat earlier this year, the trustees invited a number of stakeholders to discuss the system’s future. According to Aboelata, the California Nurses Association, SEIU 1021, and the county were invited, but all declined to attend the meeting. “I don’t think anyone on the trustees is wedded to one governance model or another. We were ready for the conversation,” said Aboelata. She noted that “there are probably some other hybrid models that make sense.”

Although four former trustees reapplied and joined the new board, which will be chaired by Dr. Taft Bhuket, chief of gastroenterology at Highland Hospital, Aboelata said she did not consider reapplying after being asked to resign.

“I was there to serve, pleased to serve, and I did so as a volunteer in the middle of the pandemic,” said Aboelata, who is the president of Roots Community Health Center, a healthcare nonprofit based in East Oakland. “There’s plenty of things that demand my expertise.” She added that she will continue to collaborate with AHS through her leadership at Roots.

Overall, Aboelata said she’s not sure what the county accomplished by dismissing the previous board wholesale, noting that removing and replacing the trustees does not change the way AHS is run.

“The fact that there has been a fundamental overhaul of the AHS governing body at the height of the deadliest pandemic of our time is particularly worrisome,” she said. “We have to make sure that we are centering the health and safety of patients and the community as we do this. I hope that those that are pushing [for a governance change] will move fairly quickly on this process. I don’t think that we have the luxury of time.”

Accreditation risk, labor disputes, and hopes for the new board

Alameda County Supervisor Wilma Chan, who represents Oakland on the county board and chairs its health committee, said the stalled negotiations with AHS’s unions and an inability or unwillingness to hold hospital administrators accountable were two major failures of the last board.

Another problem, Chan said, was the fact that AHS was threatened with losing its accreditation as a hospital during the tenure of the previous board. This would prevent Highland and other AHS hospitals from receiving the federal funding needed to care for patients who don’t have insurance or who rely on government insurance.

The Joint Commission is a national organization that conducts health and safety surveys to determine whether a hospital system is eligible for federal Medicare and Medicaid funds. In 2019, AHS received five negative citations from the Joint Commission and was given a preliminary denial of accreditation, said Dr. Tanvir Hussain, chief quality officer at AHS, during last week’s board meeting.

“It’s quite concerning that accreditation is at risk,” said Jennifer Esteen, a psychiatric nurse and vice president of organizing at SEIU 1021, and one of the new AHS board members. “We want to make sure our health system is going to be everyone’s first choice in our county, and it looks like there’s more work than I thought to do that.”

In April 2020, AHS sent the Joint Commission a plan to resolve the problems. When the Commission returned last month to re-survey AHS, the surveyors indicated to Hussain that the problems had been fixed, although Hussain said in last week’s meeting that he is still waiting for their final decision.

Chan said AHS’s previous board should have notified the county about the accreditation issues much sooner. “We didn’t find out about the results of the Joint Commission until really late,” she said, adding that the county wants to have a more direct relationship with the CEO of AHS moving forward.

Chan said the previous board of trustees was dismissed, and new trustees selected, to try to ensure that the board will cooperate with the county and hold the hospital system’s administration accountable, including whoever they pick as their new CEO. 

Delvecchio Finley, the chief executive officer for AHS, resigned at the end of November and will be leading a health system in Georgia. Finley will remain in his current role through the end of January 2021, at which point the AHS board will appoint an interim CEO while searching for a permanent replacement. His office did not respond to a request for an interview for this story.

Chan also noted that county supervisors aimed to ensure that new AHS board members brought more experience with labor negotiations. 

Aboelata said that, from the previous board’s perspective, it seemed unions were in the habit of going around the trustees to negotiate with the county directly. “It was not just a negotiation between AHS and the unions—that there was quite a bit going on with the county, as a third party, that would confound any conclusions,” said Aboelata. She said the only time during the pandemic in which the unions approached the trustees directly was to discuss concerns about the availability of personal protective equipment.

“In Alameda County, with this relationship between county supervisors and the AHS board, it’s been very hard for the county to hold the Board of Trustees accountable,” said Pearson. “We’re encouraged by the new Board of Trustees being installed but we want to see that governance change happen to hold AHS accountable to the public.”

“AHS and labor are continuing to negotiate,” said Terry Lightfoot, a spokesperson for AHS, in an email. “As we continue this important work, we are confident that an agreement will be reached that is beneficial for the organization and our represented employees.” 

At last week’s meeting, the AHS board formed a committee that will partner with county supervisors to determine whether or not to return to the days when the county ran AHS, leave things as they are, or adopt some other governance model. Vanessa Cedeno, deputy chief of staff for supervisor Chan, said the supervisors have already hired a Los Angeles-based firm, Health Management Associates, to consult with the county on options going forward.

Aboelata said transparency and engagement with the broader community will be key, especially if the county supervisors and the new AHS board decide to make big changes. “I would be concerned about how the county would plan to take it over, and I would definitely want to see what those plans are,” said Aboelata. “I think the community should want to see that as well.”

The AHS board will meet again in January 2021.