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[caption id="attachment_20384" align="alignnone" width="576" caption="Artist rendering of the proposed Sutter Health hospital north of Santa Rosa. The physician-owned facility would have been built next to the hospital."][/caption]

Would have been near new hospital; nixed by health bill

SANTA ROSA -- Sutter Medical Center of Santa Rosa is abandoning plans to include a physician-owned medical center that would have been on the same site as its proposed new hospital near the Wells Fargo Center for the Arts.

The decision to nix the physician-owned component of the proposed 70-bed hospital is a direct result of the passage of the health care reform bill in late March, which contains a strict set of criteria for physician-owned hospitals that would need to be met by Dec. 31, 2010.

Sutter is not expected to meet such criteria by the end of the year given where the proposed new hospital facilities are in the approval process, said Lisa Amador, spokeswoman for Sutter Santa Rosa.

Although the physician-owned element will not go forward, the 70-bed hospital expansion will remain on course, pending the outcome of an environmental impact review and whether the proposal meets certain agreements between the county and Sutter.

“The health care reform bill recently signed into law prohibits the original physician partnership ownership model Sutter Health envisioned for the Physicians Medical Center,” Ms. Amador said in a statement.

“Sutter Medical Center Santa Rosa is currently evaluating other options,” the statement continued. “All other options pursued will remain within the medical campus’ total footprint as analyzed in the Environment Impact Report under review by the county of Sonoma, and therefore any changes in concept will not disrupt the EIR process or time line.”

Sutter anticipates breaking ground on the new hospital by mid-September or early October of this year and is expecting for construction approval by the end of August, Ms. Amador said.

Sutter faces a deadline to replace or renovate its Chanate Road facilities to meet seismic requirements.

As to the other options being pursued for the expansion, Ms. Amador said, "It’s difficult to speculate at this time.”

The new health care bill, the Patient Protection and Affordable Care Act, eliminates the “Stark Exception” for physician-owned hospitals that do not have physician owners or investors and a Medicare provider agreement in place by Dec. 31, 2010, according to the bill that was merged with the house version, the Health Care and Education Affordability Act.

The proposed physician-owned medical center would not have impacted the 1996 Health Care Access Agreement with the county of Sonoma, said Rita Scardaci, the director of Sonoma County Health and Human Services.

Health and Human Services is currently analyzing Sutter’s hospital proposal.

Sutter and Sonoma County brokered the Health Care Access Agreement with the intent that Sutter “provide access to the residents of Sonoma County to high-quality hospital services.” When Sutter proposed the expansion, the county held multiple hearings in attempt to best assess the impact and level of care that a new Sutter hospital would have and whether or not it would fall within the Health Care Access Agreement.

Sutter’s physician organization, renamed the Sutter Pacific Medical Foundation in January, is already located in close proximity to the site of the proposed expansion, along with a family medicine center and other specialty services.