County Executive’s Office

Important note: This recommendation was approved by the Board of Supervisors on July 23, 2013. Subsequent agreements are attached below.

TO:                            Honorable Board of Supervisors

FROM:                      John L. Maltbie, County Manager

SUBJECT:                Agreement with Seton Medical Center

RECOMMENDATION:

Adopt a Resolution authorizing an agreement with Seton Medical Center and the Health Plan of San Mateo, for the term of October 1, 2013 through June 30, 2014, in an amount not to exceed $11,500,000.

BACKGROUND:

Through workshops and other means, the Board of Supervisors has had discussions  and gathered information about spending priorities for the use of funds collected through the Measure A one-half cent retail transactions (sales) and use tax. The Measure A sales tax was approved by the voters in November 2012 and the County recently began to collect receipts from the tax. Staff estimates that the Measure A sales tax will generate approximately $64 million in FY 2013-2014.

In considering the adoption of the Measure A sales tax and the use of proceeds from the tax, the Board of Supervisors has identified as County priorities ensuring that hospitals and emergency rooms are seismically safe and remain open and that long term care beds remain available for low income patients. In particular, the Board stated that it was considering the use of general funds to provide “substantial assistance” to Seton Medical Center to rebuild and meet seismic standards so that it can continue providing critical healthcare services in the community.

DISCUSSION:

Seton Medical Center serves as an important part of the County’s health care safety net. County staff recognizes the importance of Seton’s mission to provide medical care to underserved residents of the County, including Health Plan of San Mateo (HPSM)/Medi- Cal members and indigent County residents who receive healthcare under the County’s Access to Care for Everyone (ACE) program. Seton operates an emergency department and provides a significant number of long term care beds to low income patients. Further, to remain open in the future, Seton must complete significant seismic safety improvements to its facilities.

In order to assist Seton to continue to deliver health care services at the current levels while it develops a strategic plan to ensure its long term survival as a component of the County’s healthcare safety net, staff recommends that this Board enter into an  agreement pursuant to which the County will provide to the HPSM, for payment to Seton, $11 million through the end of the 2013-2014 fiscal year. In exchange, Seton agrees that it will continue to provide safety net services for HPSM and ACE members at current levels, and that it will use no less than $2 million of the funds received for State- mandated seismic safety work at Seton Medical Center.

Further, Seton agrees that it will retain a consultant satisfactory to the County who will prepare a Strategic Plan that will focus on, among other things, an analysis of, and recommendations for Seton’s business lines, including physician specialties and ancillary services; strategies for improving physician recruitment, retention, and alignment; and enhancement of the financial viability of long term care services. Under the agreement, the County will reimburse Seton for half of the cost of the Strategic Plan, up to $500,000.

After the Strategic Plan has been completed, the parties will meet, review the plan and its recommendations, and discuss a longer-term agreement for services.

PERFORMANCE MEASURE(S):

* CareAdvantage, Medi-Cal, HealthWorks, Access and Care for Everyone (ACE), Healthy Families, Healthy Kids

FISCAL IMPACT:

The term of this agreement is October 1, 2013 through June 30, 2014 and the maximum fiscal obligation is $11,500,000. Funds in the amount of $11,500,000 are included in the FY 2013-2014 Budget and these services will be paid for with proceeds from the Measure A sale tax.

Important note: This is a copy of the official report to the Board -- item 11 on the Board agenda.