2 Grossmont Doctors Sue to Stop Sharp Merger

Two doctors at Grossmont Hospital filed suit Tuesday to stop the hospital’s merger into Sharp HealthCare, saying it would amount to an “illegal gift” of public assets to a private corporation.

The suit says the merger would also adversely affect the doctors’ ability to practice medicine, give Sharp an illegal monopoly on health care in the county and compromise the quality of health care for residents of the Grossmont Hospital District.

“What the Grossmont board is trying to do is give the hospital up to a private corporation even at the same time that they’re acknowledging that they’re doing well and making money. They made over $5 million last year,” said Dr. Dennis Wilcox, a surgeon and one of the two who brought the suit.

“They’re in good shape, but they see dark clouds on the horizon so they want to run under the umbrella. There’s no need to do that,” Wilcox said.

His co-plaintiff in the Superior Court suit is Dr. David Rutberg, a neurosurgeon who also practices at Grossmont.

The suit came one week after the first public meeting on the idea. At that meeting, angry residents of the Grossmont Hospital District opposed the deal and protested that they should have been consulted much sooner. Grossmont executives have been discussing an affiliation with Sharp officials since last fall.

The suit asks the court to issue orders prohibiting Grossmont’s executives and board members from pursuing the merger.

Hospital executives and health care analysts in San Diego County have been saying for the past few years that mergers of hospitals into large conglomerates will be the only way hospitals can survive over the next decade.

In January, Scripps Clinic and Scripps Memorial Hospitals merged to create what is, for now, the largest health care concern in the county.

However, Sharp has been quietly acquiring smaller hospitals from Temecula to Chula Vista and began discussions with Grossmont last fall. Sharp also is in preliminary discussions to take the Palomar Pomerado Hospital District’s facilities under its wing.

With such a network of hospitals and doctors all over the county, Sharp would be able to market its services directly to employers, much as Kaiser Permanente now does.

However, the Grossmont affiliation presents difficulties that have not been encountered before, because Grossmont is a district hospital.

It is chartered under state law to serve a specific geographical area and collects tax money from its La Mesa-area residents. Board members are elected by district residents.

The Scripps merger was easier because, although both Scripps organizations are nonprofit, neither is accountable to any specific public constituency.

The Grossmont-Sharp merger would get around this obstacle by creating a dummy corporation to which the board would give all district assets. The corporation would then lease the facilities to Sharp for 30 years.

“We know that Sharp has its own agenda for carrying out its own corporate wishes,” Wilcox said. “The wishes of the corporation may or may not be in the public interest. But our hospital is established for the public good.”

As a physician, Wilcox said, he also is concerned that Sharp is well known as a bottom-line organization that has adopted many measures limiting doctors’ ability to practice the best medicine they deem possible.

“Doctors, when pressured by non-doctors who have power over their lives, will water down their care and possibly discharge patients before it’s necessary, or not order specific tests that they feel are necessary, so that the corporation can make money,” Wilcox said. “That’s the danger that people don’t understand.”

He denied that the issue is private-practice physicians’ reluctance to move into HMO-type managed-care systems.

“Managed care is a different issue. Managed care is here to stay. I happen to belong to an HMO,” Wilcox said. “I’m not saying managed care is all bad and we have to make a major stand against it.”

Physicians affiliated with Sharp who want to stay outside its cost-cutting strictures are unhappy, Wilcox said.

“We’ve heard from doctors who are still trying to survive in the private-practice environment alongside these other doctors aligned with the corporation, and they’re having a very difficult time,” he said. “They certainly have zero power in the decision-making processes of their own hospital.”

A spokeswoman for Grossmont said officials there could not comment on the suit, but released a statement on behalf of hospital officials.

“They understand that there is some concern within the community about the form that the affiliation would take, and the effect it would have on health care in the East County,” said the spokeswoman, Karen Hamilton. “However, by not looking at alternatives, health care in the East County would suffer in the future.”

Barbara Heineback, manager of corporate public relations for Sharp, said officials there also could not comment on the suit until seeing it. But, she added, “Our mission is to provide accessible and affordable care to the community. It is the care of the patient that is important to Sharp Health Care.”