Healthcare

Migden on Newsom’s cuts

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Our editorial this week calls on the two candidates for state Senate, Carole Migden and Mark Leno, to speak out against the Newsom budget cuts. I haven’t heard from Leno, but I got the following message from Migden this morning:

“I completely agree with your take that Mayor Newsom’s budget cuts are cruel and will take from those who have little or nothing to give. I have stood and spoken out with SEIU 1021 at two protests this year against these cuts to vital social services. Moreover I have stood with the California Nurses Association as we try to save St. Lukes and enforce staff to patient ratios. What is most vexing about the Mayor’s move to cut $18 million in healthcare for the City’s poorest residents, is that there seems to be no willingness to reach out and ask more from those who live in this CIty and can afford to pitch in extra. There is no question that the City and the State is in dire economic straits. Yet San Francisco also has a population of incredibly wealthy individuals (including our Mayor) and we must explore all options and pull in extra resources to make the City whole. Cutting is the quick and frankly the easier option; hard work and leadership is what is required to save vital services.

-State Senator Carole Migden”

So, go Carole. Mark?

The SEIU strikes back

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› jesse@sfbg.com

The Rhode Island Street headquarters for Local 1021 of the giant Service Employees International Union (SEIU) had several surprise visitors April 14. First, International President Andy Stern arrived from Washington DC to speak with the local’s executive board.

Then, after word of Stern’s last minute appearance got out, a group of 20 activists from Oakland–based SEIU affiliate United Healthcare Workers West (UHW) attempted to enter the building and confront Stern about what they perceive to be his anti-democratic administration. They were barred from the meeting. When the Guardian attempted to gain entrance, we were twice escorted to the exit by 1021 staffers. A source inside the union said Stern left through a back door during lunchtime.

Stern’s visit and the dissidents’ foiled attempt to meet him reflect the high level of tension inside SEIU these days. As it prepares to vote on several democratic reform measures at a convention in early June, internal fault lines have split the 1.9 million-member union.

As we reported last week ("Hard Labor," 4/9/08) Stern loyalists have pushed the boundaries of union rules, and perhaps even federal law, to beat back the slate of reforms championed by UHW’s dissident leader, Sal Rosselli.

Now, in response to our reporting and to Rosselli’s movement, leaders inside the labor giant apparently have gone into full damage-control mode.

In fact, an election committee that appears to have been hand-picked by Local 1021’s president already rejected an internal complaint about the election process — and critics are calling foul.

WHO’S A MEMBER?


Two weeks ago, the Guardian reported on a controversial batch of e-mails among SEIU officials. Calling themselves the "salsa team," high-level union staffers — including Damita Davis-Howard, whom Stern appointed as president of 1021, as well as Josie Mooney, a Stern assistant — swapped campaign strategy and exchanged anti-Rosselli talking points during an election to select delegates to the upcoming convention.

On April 4, more than a dozen union members lodged a formal complaint with the organization’s local election committee. The complaint charged that the salsa team’s missives broke union rules against staff involvement in elections. Soon afterward, lawyers representing Rosselli’s union filed suit against Stern and the SEIU — alleging, among other things, that SEIU "officers, employees, and allies" interfered with delegate elections in violation of federal labor law.

While the lawsuit will not see a courtroom for some time, it didn’t take long for the union committee to rule against the members’ complaint. In a memo dated the following Monday, April 7, and obtained by the Guardian, the nine-member body reported to the union’s International Secretary-Treasurer that "the staff (directors and others) named in the challenge are members of Local 1021 and therefore have the same right as all other members" to participate in the election.

The distinction is key: union rules strictly forbid paid staffers from interfering in elections by members. And supporters of union democracy insist that a central tenet of their movement are the notions that staffers work for the membership — and that the members, not the staff, determine union policy (See Opinion, page 7).

The outcome is important not only to the union but to progressive politics in San Francisco. Local 1021 (and Local 790, the San Francisco chapter that predates it) has played a major role in supporting progressive causes and candidates.

The committee’s ruling, and the speed with which it reached its decision, outraged many inside the union. A number of 1021 staffers who declined to be identified for fear of reprisal called the memo "bullshit" when asked to comment.

Union member Maria Guillen, one of the members who signed the complaint, told us that the salsa team’s actions and their exoneration by the election committee "go against the spirit of union democracy." Guillen went on to challenge the assertion that union staff, especially top management like Mooney and Davis-Howard, have the same rights as rank and file members when it comes to campaigning in union elections.

"None of the executive board members I’ve spoken to can recall voting on that. Who had the authority to permit that? … To think that folks with all the resources and all the connections are working against us, it breaks my heart."

The makeup of the committee also raises conflict of interest issues.

According to the provisional bylaws for Local 1021, which were enacted after it was formed in early 2007 by merging 10 separate Northern California locals, 1021’s appointed president Damita Davis-Howard has control "in creating committees and naming members to such committees." Several sources inside the union told us she used this power to select the members of the election committee that apparently ruled on whether she herself broke union rules.

Davis-Howard did not return calls for comment and our attempts to reach committee chair Cassandra Burdick through staff at Local 1021 were unsuccessful.

SEIU international spokesperson Andy McDonald could not confirm whether Davis-Howard had in fact named the election committee members to their positions

ROUGH STUFF


In another indication of just how radioactive SEIU’s internal dissension has become, numerous Democratic politicians and party officials in California recently received a letter signed by five presidents of SEIU locals around the state, including Davis-Howard. The letter, obtained by the Guardian and dated April 2 — the day after we broke the salsa team story — seeks to reassure party members that the union will clean its own house. It also appears to warn the state’s political leaders not to choose sides between Rosselli and Stern.

With millions of dollars in its coffers, SEIU is a prime source of campaign cash for politicians.

"We have a democratic process for resolving our internal differences," the letter reads. "In fact, our members will debate and set the course of our union at our convention in June. We hope that you will respect the right of our members to decide for themselves the direction of their union and avoid involvement in our internal affairs."

SEIU’s alleged hardball tactics have extended beyond its internal conflict in recent weeks. The union has been feuding with the California Nurses Association over allegations that the nurses’ union has been attempting to woo SEIU members into switching to the competing union.

Last week, several CNA board members in Southern California claimed that SEIU staffers showed up at their doors and confronted them. SEIU confirmed that it’s sending people to CNA members’ houses, but said there was no intimidation. And last weekend, a large crowd of SEIU members allegedly stormed a convention in Michigan put on by the magazine Labor Notes. A press release from CNA claimed several people were injured and that numerous CNA officials had to flee "out the back of the hall for their safety."

SEIU’s Lynda Tran confirmed that "things got a little rough" when a group of SEIU members and staff attempted to confront a CNA official. "Folks from both sides got injured," she added.

Labor activist and author Herman Benson, of the Association for Union Democracy in New York, told the Guardian that the divisions within SEIU, and its conflicts with other unions, are nothing new in the labor movement. For nearly as long as unions have existed, he said, power struggles have taken place among union brass. "Any incumbency has enormous weapons at its disposal."

Benson praised Stern for his efforts in recruiting new members for SEIU. As the rest of organized labor has continued to decline in America, Stern’s shop has brought in nearly 1 million new members. But Benson took issue with what he perceived as intolerance for dissent within his ranks.

"Stern has a vision of an almost militarized bureaucratic labor movement … but if you can’t have criticism before your international convention, when can you have it?"

A less perfect union

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› jesse@sfbg.com

By nearly every measure, the Service Employees International Union has become a juggernaut. As the rest of organized labor has seen its share of the American workforce continue to dwindle, SEIU has brought in some 800,000 new dues-paying members in recent years. With the Democratic Party taking over Congress in 2006, the 1.9 million-member organization, rich with campaign funds, wields enormous political clout, and it will only become more formidable if Hillary Clinton or Barack Obama wins the White House in November.

But all is not well inside the labor giant. Andy Stern, the union’s president, has pushed hard for merging and consolidating local chapters into larger operations — and many SEIU members, especially here on the West Coast, say that’s turning the union into a top-down autocracy in which Stern loyalists wield undue influence and meddling officials from Washington, DC squelch dissent.

And now, the Guardian has learned, Stern operatives are using their money and organizing clout in a hard-hitting campaign — not to force an employer to the table or to toss out an anti-union politician, but to discredit another labor leader.

The campaign is part of a bruising power struggle between Stern and dissident local leader Sal Rosselli, who runs the Oakland-based SEIU affiliate United Health Care Workers West. In the past few months, union insiders say, SEIU officials, including a senior assistant to Stern, set up what one leader called a "skunk team" to undermine Rosselli’s efforts at winning key union delegate elections. At one point, the team — which involved a political consulting firm linked to big downtown businesses — discussed an opposition research file compiled on Rosselli by a health-care giant his union was fighting

And leading up to the delegate elections last month, SEIU staffers worked to promote Stern-supporting candidates, possibly in violation of union rules, while actively discouraging other union employees from campaigning. That’s led to a formal complaint alleging improper involvement by Stern’s staff in a local union election.

EMERGING TENSIONS


In 2005, Thomas Dewar went to work as a press secretary at Local 790, formerly SEIU’s biggest San Francisco outlet, which represented approximately 30,000 workers, most of them public employees. Local 790 was among the most politically progressive union shops in the country, supporting left-leaning candidates for office and progressive causes like public power. In early 2007, Andy Stern initiated a merger of 790 with nine other regional locals. The move was part of a larger consolidation in the state that saw the number of California union affiliates reduced by nearly half.

The new Northern California superlocal was dubbed 1021, as in "10 to one." Local 1021 has continued 790’s liberal activism. But right after the merger was finalized, Dewar and other sources told the Guardian, the atmosphere around the union changed for the worse.

"A lot of members had anxiety," Dewar recounted. Most troubling, he said, was the insertion of Stern appointees into leadership positions, including current president Damita Davis-Howard. "Members were upset. They saw co-workers whom they had elected unilaterally removed by a guy in DC and replaced by his handpicked appointments."

Ed Kinchley, a Local 1021 member who was appointed by Stern to the local’s executive board after the consolidation, shared Dewar’s memory of the tensions. "You had 10 different locals with 10 different ways of doing things. It’s difficult to merge all of that. A lot of people who had been elected to leadership positions were removed."

Dewar told us he struggled to adjust to his new working environment. But after his initial misgivings, he said he devoted himself to backing Stern’s vision for the combined local: "We were told over and over that change is hard. So I decided to give it an honest shot." Dewar said he worked to get good press for 1021 and to build Davis-Howard’s profile.

But early this year, tensions between Rosselli and Stern flared — and according to Dewar, top staffers at 1021 began to focus more and more of their attention on the feud.

"They were freaking out about Sal," he said.

Enraged at what he considered International meddling in the affairs of his Oakland-based local, United Healthcare Workers West, Rosselli resigned from SEIU’s executive committee in early February. He also began championing a "Platform for Change" to be voted on at the upcoming SEIU convention in June. Among other things, the Rosselli-backed slate of reforms would give local union outlets more say in proposed mergers and collective bargaining agreements. The platform, if approved, would also scrap the current delegate system for electing International officials and replace it with a one-member, one-vote structure.

According to Dewar’s account and to evidence obtained by the Guardian, top SEIU officials have been working overtime to counter Rosselli — even pushing the boundaries of the union’s own rules and colluding with political consultants who have often opposed organized labor.

‘THE ANTI-CHRIST’


In early March, Dewar said that in early March, Josie Mooney, a former Local 790 president who is now a top assistant to Stern, approached him about joining what she characterized as a "skunk team that Andy and I are putting together." Dewar recalls Mooney telling him that the purpose of the team was to counter Rosselli’s increasing popularity with the rank and file, and to sink Rosselli’s platform for the convention.

Dewar told us that Mooney asked him to join the skunk team during a brunch meeting at the Fog City Diner in early March. An e-mail exchange he shared with us shows that he and Mooney discussed having brunch at the diner on March 1.

Mooney did not return numerous calls for comment and, through an SEIU spokesperson, she declined to speak for this article. But Dewar told us Mooney promised him at the brunch that his assistance in her efforts would win him positive attention from Stern. The team, she reportedly told him, was directly authorized by Stern and "that resources would not be a problem."

Dewar said he vacillated about joining the team, torn about aiding what he considered to be an internal union smear squad. "In 1021, we’re conditioned to think that Sal Rosselli is the anti-Christ," Dewar told us. "But even still, he was still a part of the same union." A March 4 e-mail from Mooney’s SEIU e-mail account to Dewar shows her urging Dewar to make up his mind: "You have to give me your commitment. I am (as we speak) selling you at the highest levels. Don’t blow that :)."

Dewar eventually agreed to join Mooney, Tom DeBruin — an elected vice president of SEIU International — and someone Dewar said Mooney referred to as the team’s "silent partner" for a dinner meeting.

E-mails from Mooney and other attendees show that the meeting took place March 10 at Oliveto Restaurant in Oakland.

Mooney’s "silent partner" turned out to be Mark Mosher, of the enormously successful San Francisco consulting firm, Barnes, Mosher, Whitehurst, Lauter, and Partners (BMWL). John Whitehurst, another of the firm’s partners, also attended the dinner.

BMWL has worked for the SEIU since 2001. But its client roster also included Sutter Health and the Committee on Jobs. Both organizations have less-than-stellar reputations among organized labor. Nurses at 10 Bay Area Sutter hospitals recently walked off the job for a 10-day strike. The Committee on Jobs is one of the largest lobbying organizations for downtown San Francisco business interests and has fought against numerous union causes. Mosher told the Guardian by phone that, as of November of last year, the Committee is no longer a BMWL client.

THE ROSSELLI FILE


Dewar claims Sal Rosselli was the central topic of conversation at the dinner. At one point, he says, the participants discussed an "oppo research" file on Rosselli compiled by Sutter Health. The hospital giant has clashed repeatedly with Rosselli and apparently had sought to dig up dirt on him.

Whitehurst worked for Sutter in the 1990s. His efforts for the hospital chain during a ballot campaign in 1997 earned him a place on the California Labor Federation’s "do not patronize" list.

Mosher confirmed by phone that Rosselli’s file at Sutter did in fact come up at Oliveto that evening. But he said Dewar "baited" him and Whitehurst into discussing it. Furthermore, he said, Whitehurst reported that Rosselli’s file was "clean."

In fact, a March 12, 2008 e-mail from Dewar to Mosher suggests that the team focus on Rosselli’s "hypocrisy" and states, "Have we approached anyone at Sutter re: dirt on Sal? Have we been able to peek into their oppo file?"

Later that day Mosher replied, "John Whitehurst read Sutter’s whole oppo file on Sal in 1997." In a follow-up message, Mosher writes that the file "really supports the idea that he’s not motivated by money."

DeBruin did not return calls for comment. Kami Lloyd, communications coordinator for Sutter, disputed whether the oppo file even existed: "To my knowledge," she told us, "no such file exists at Sutter Health."

Reached for comment, Rosselli reacted angrily to news of the alleged "skunk team" and the fact that a research file on him, compiled by a corporation perceived to be anti-union, was being discussed among SEIU officials. "It’s shocking. It’s treasonous. For Andy Stern to be using our members’ dues money to finance [a smear] campaign against his own members in United Healthcare Workers, it’s fundamentally anti-union."

Mosher defended his firm’s involvement with SEIU. He told us that he and Whitehurst were "not brought on board to do negative things against Sal Rosselli." Instead, he said their mission has been to help tout the union’s accomplishments as it prepares to hold its convention from June 1-4 in Puerto Rico.

SEIU spokesman Andy McDonald echoed Mosher’s description of the firm’s duties. Both Mosher and McDonald brought up the fact that Whitehurst has also worked for Rosselli’s UHW union.

UHW’s Paul Kumar confirmed that Whitehurst is currently "on our payroll" to assist in a dispute against Sutter Health — the very company Whitehurst worked for in the 1990s and the same source that provided him with access to Rosselli’s research file. "These guys [BMWL] claim they are trying to reinvent themselves," Kumar said. "But to be on our payroll and to engage directly in executing a dirty tricks program … is about the most blatant violation of professional ethics I can imagine."

Whitehurst did not return calls for comment.

Dewar claimed he urged Mooney and the other attendees of the March 10 dinner to consider "appropriating" Rosselli’s democratic reforms. "The members would all wildly support it. And that way, if the International co-opted Rosselli’s ideas, then [the internal conflict] really would be about this clash of personalities, Rosselli versus Stern, instead of ideas." According to Dewar, Mosher and Whitehurst were receptive to the proposal to co-opt Rosselli’s initiatives, but that "Josie nixed it."

When we asked Mosher if he remembered this exchange from the meeting, he said his memory was "hazy" and that "a lot was being discussed that night."

Although Dewar was, by his own account, an active participant in the skunk team, he says he started to have second thoughts. The dinner at Oliveto, Dewar said, and the discussion of Sutter’s file on Rosselli, "made me want to take a shower … the cynicism I was exposed to was toxic."

One week later, he sent Mooney an e-mail informing her that, "Today’s my last day at SEIU … the circular firing squads that are now forming in the local and in SEIU nationally have left me jaded, stressed out, and depressed."

SEIU’s McDonald denied that the skunk team exists, or ever existed. He added that "the meeting [at Oliveto] was about talking about how [Mosher] could help SEIU communicate our message … within the context of the misinformation campaign being spread by Sal Rosselli and UHW’s leaders."

OUTSIDE INFLUENCE


The rancor between Rosselli and Stern has reached a boiling point in recent weeks. In compiling this story, we had to wade through reams of documents and endure long expatiations from officials and press flaks about the sins of the other side. Both factions have constructed slick, professional-looking Web sites to question the probity of their rivals, and both have coined kitschy names for their respective policy initiatives. The SEIU has countered Rosselli’s "Platform for Change" with what union leaders call a "Justice for All" platform.

But the internecine struggle may have driven Josie Mooney and other high-level SEIU staffers to do much more than vent about Rosselli or seek dirt on him from political consultants. E-mails obtained by the Guardian suggest that she and other SEIU officials worked to influence an important local delegate election last month — possibly in violation of union rules — and, some union members now allege, in violation of federal law.

Delegates selected in the election will attend the union’s international convention in June and will decide between the Rosselli’s "Change" and Stern’s "Justice" platforms. The outcome of that vote, and others like it, will shape the mammoth labor organization’s future for years to come. And the e-mails appear to show a concerted effort by Mooney and Stern loyalists to ensure that Rosselli’s dissidents don’t stack the convention and push through their set of reforms.

Referring to themselves in the e-mails as the "Salsa Team," SEIU staffers discussed strategy and coordinated campaign activity for the delegate election with high-ranking union officials like Mooney and Damita Davis-Howard, the president of Local 1021, the e-mails show. In a formal complaint, some members charge that these activities violated Local 1021’s Election Rules and Procedures — specifically Rule 18, which states that "while in the performance of their duties, union staff shall remain uninvolved and neutral in relation to candidate endorsements and all election activities."

While Rule 18 does not specifically spell out when union staff can advocate for candidates, other than proscribing such activities "while in performance of their duties," the e-mails in our possession are date- and time-stamped, and at least one was sent during normal business hours. Furthermore, the Guardian has obtained an internal memo from Local 1021 official (and apparent Salsa Team member) Patti Tamura in which she warned union staffers that the phrase "’performance of their duties’ goes beyond [Monday through Friday] and 9-5p."

One Local 1021 official who asked not to be identified told us that Tamura’s memo appeared to be a clear message that staff should stay completely out of the election. "They made it perfectly clear to the lower staff that your employment doesn’t stop [after hours]; you’re still staff. That means you don’t get involved. But now it turns out they themselves were doing it. That’s a double standard … it’s certainly not right."

The messages between Salsa Team members show them actively working to recruit potential delegates sympathetic to Stern’s platform and to aid Davis-Howard in her bid to represent the union at the June convention. One missive, dated Feb. 18, which appears to come from the personal e-mail account of Local 1021 employee Jano Oscherwitz and was sent to what appear to be the personal accounts of Tamura and Mooney, requests that a "message for Damita" be drafted.

A forwarded e-mail from that same day, from Oscherwitz to what appear to be personal e-mail accounts for Tamura, fellow 1021 staffer Gilda Valdez, and "Damita" includes a "Draft Message" with bulleted talking points, apparently for Davis-Howard to use as she "Collect[s] Signatures on Commitment Cards."

"Commitment cards" refers to pledges from union members to support certain delegates.

The e-mails go beyond merely aiding Davis-Howard and other Stern-backed candidates. They also include detailed strategy for opposing Rosselli and countering his message. A March 5 Salsa Team message includes an attached document with several talking points critical of the dissident leader. In the body of the e-mail, SEIU staffer Gilda Valdez advises Davis-Howard, Mooney, 1021 Chief of Staff Marion Steeg, and others to "Memorize the points in talking to folks." Valdez goes on to say in the e-mail that she "will be calling … about your assignments."

Reached for comment, Davis-Howard confirmed that the AOL e-mail account listed as "Damita" was hers. But she claimed no knowledge of the Salsa Team or the messages sent to her. "If you’re saying those e-mails went to my home computer, who knows if I ever even got them?"

Davis-Howard bristled at the suggestion that the Salsa Team’s activities violated union rules. "Are you trying to tell me that I can never campaign? Does it [Rule 18] say that I have to be neutral and uninvolved 24 hours a day?"

Calls to Mooney, Oscherwitz, Valdez, and Tamura were not returned. Through an SEIU spokesman, Mooney declined to comment.

A BAD AFTERTASTE


On April 4, three days after the Guardian first reported on the Salsa Team e-mails on our Web site, Sanchez and several other 1021 officials filed a formal complaint with the union’s election committee. In the complaint, they accuse Davis-Howard and the other team members of vioutf8g Rules 10 and 18 of the union’s election codes. Rule 10 forbids "the use of union and employer funds … to support any candidate."

Local 1021 executive board member and Stern appointee Ed Kinchley authored part of the complaint. According to the text, which was obtained by the Guardian, Kinchley wrote, "While telling other staff that they may be fired for any intervention in this election, Ms. Davis-Howard and the others involved secretly did exactly what they told other staff they were forbidden from doing."

The complaint was signed by 16 Local 1021 officials, including numerous members of the local’s executive board. It called on the election committee to remove Davis-Howard "from the elected Delegate list" and to bar Salsa Team members from attending the convention in June.

The issue also has landed in federal court, where UHW was expected to file against Stern and other SEIU officials, alleging interference in delegate elections.

More cynical sources both inside and outside SEIU told us they believe the Rosselli-Stern feud boils down to one thing: power — either holding onto or expanding it. But labor scholar and former Local 790 member Paul Johnston had a more nuanced perspective.

Johnston, who taught at Yale and, until recently, worked for the Monterey Bay Labor Council, told us he admired both leaders and the work each has done on behalf of the larger union. Calling the current strife "a huge can of worms," he added, "These are questions of principle and there are good ideas on both sides."

Stern’s push to increase the union’s bargaining and political clout through more consolidation, Johnston went on, "has some very positive aspects to it…. In the old days, many of these kind of mergers were done for purely political power. The mergers being conducted today [at Stern’s direction] are primarily strategic, though. But there are some power issues that inevitably arise." On the other hand, he said, Rosselli’s UHW, "is a dynamic organizing union that has [its] own issues."

Tooth and consequences

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› culture@sfbg.com

It’s two days after Christmas and I’m sprawled out on a plastic-lined chaise lounge, sipping fluoride and waiting for the blood to stop gushing from my gums so the doctors can get back to work. Beyond the noise of drills and X-ray machines I hear grunts from several other patients and the sounds of merchants outside hawking sombreros, sweetbread, bootleg Fendi bags, and pottery. Kind of strange, but I’m not worried anymore. This is my second day at Dr. Rafael Lopez’s dental clinic, and I’m no longer freaked out that it’s nestled among trinket stores and cantinas in a bustling bazaar in Mexico.

I also don’t care that the dentists here speak hardly any English, nor I any Spanish. I mean, it’s not like I’m alone. All the other patients at Dr. Lopez’s office are either Canadian or American, and all the people shopping out front are too. In fact, nearly every person I’ve met on the streets here is Caucasian and an English speaker. We’re all dental tourists, and we’ve come to Los Algodones — a sunny border town near Yuma, Arizona, which allegedly has more dental clinics and pharmacies per block than any other city in the world — to save money. In my case, I’m in for three root canals with posts and crowns for the price of a secondhand scooter on eBay: $1,850, about a third of what I’d pay for the same procedures in the States.

I’d heard about Dr. Lopez’s clinic through a friend of my mother’s, but Los Algodones, like other dental tourism destinations, was easy to find on the Web. In fact, the town’s Web site, www.losalgodones.com, is actually a dental clinic referral network, with pictures of smiling clinicians and graphic before and after shots flashing across its home page. Clinics like Dr. Lopez’s, which often handle 10 to 20 patients a day, are set up exclusively for foreigners. Dr. Lopez estimates that 80 percent of his customers are American and 20 percent are Canadian; most Mexicans in the area can’t afford his rates. Many of them come to towns like this for big-ticket procedures like bridges and reconstructive surgery, some of which can cost more than $10,000 at home.

And they’re coming in increasing numbers. According to HealthCare Tourism International, a nonprofit accreditation and information organization set up to monitor the medical tourism boom, an estimated 1 million Americans will travel abroad this year for some of sort of medical service, up from the National Coalition on Health Care’s figure of about 150,000 in 2004. Of the procedures sought, 40 percent will be dental related. A recent article in the New York Times on the dental tourism phenomenon cited a boom in luxury travel packages designed around dental procedures. A root canal followed by a little fly-fishing in Costa Rica? Why not? The money you save can justify a short vacation.

ROOTS OF THE PROBLEM


Dr. Lopez’s clinic is, hopefully, the end of the road for me. I’ve been struggling with dental problems (and the potential resulting bills) for years. With all this talk of health care reform, you’d think I would have been able to find a decent low-cost US dentist, especially in civic-minded San Francisco. But it just wasn’t happening. For whatever reason, dental care and health care are viewed as two separate issues in the United States. When it comes to diseases, colds, and broken bones, you can usually catch a break, but good luck trying to get your teeth fixed on a budget. The truth is, even if you have some form of dental insurance, which is unlikely — according to the American Dental Association (ADA), only about half of all Americans do — dental care is nearly impossible for average wage earners to afford. At least, I’ve never been able to afford it. And I’ve looked everywhere.

My own dental horror story began nearly a decade ago when the Marine Corps kicked me off my retired father’s lifelong dental plan. I was fine for about a year, until the day I awoke with a terrible pain in my mouth. I was 19 at the time, taking classes at a community college and working at a café — barely able to pay rent, let alone find the time and money for a visit to the dentist. So I did the next best thing: simply ignored the pain, staving it off with copious amounts of ibuprofen when it got intense. The over-the-counter denial did the trick for almost two years, but I knew I would be forced to eventually bite the bullet, however softly.

And then it happened. My teeth started breaking. Not hurting, at least no more than usual, just breaking off — in huge, gray chunks.

This went on for years. By the time I was 25, four of my teeth had shattered and the rest seemed well on their way to doing the same. I adopted the diet of a five-month-old, unable to chew anything tougher than bananas or scrambled eggs. It was time to act, but I had no idea where to go. As a full-time student, getting by on financial aid, loans, and whatever I could rake in as a part-time waiter, I was nearly destitute. I’d recently transferred to San Francisco State University, but at that time, in order to purchase the student dental plan the school offered, I also had to purchase its medical plan, a combination that would have increased my monthly bills by nearly $200.

It was tempting, particularly in comparison with most employer-related or individual plans I qualified for, which could run into the thousands. But SFSU’s dental plan screened out existing problems, like the trainwreck I had going on, and carried an annual cap of less than $1,000. (Unlike medical insurance plans, which feature deductibles, most dental plans have annual monetary ceilings.) So even with the plan I would still be unable to afford even a fraction of the work I needed to have done. Since my student days, SFSU has implemented a dental-only plan available to undergrads, but often the limits are too low to cover anything other than cleanings and fillings.

Thus I began my search for a pro bono dentist, figuring that with all the uninsured people living in the city there must be someone around. It quickly became clear, however, that scoring free dental is harder than finding a decent vegetarian restaurant in rural Alabama.

QUEST FOR DENTAL


First, I had a glimmer of hope: a medical and dental clinic in Berkeley that had the word free in its name.

The Berkeley Free Clinic (BFC) has been offering free medical and dental care to the hard-up since 1969. It provides free HIV tests, medicine, preventative education, and more. But I needed dental work — and that was another story. As the only clinic in Northern California offering free fillings, extractions, and referrals to discount dentists, BFC is insanely popular. And since it’s run by volunteers and donors, it’s also chronically understaffed. Jessica Hsieh, a clinic coordinator, explained that the facility does as much as it can with limited resources. "We used to take patients on a first-come, first-served basis," she says. "But there were so many people lined up every night that our waiting room and hallway became fire hazards."

To deal with this problems, the clinic has devised a maddening selection system, which includes spotty business hours and a name-in-the-hat-style lottery. It sounded a little sketchy, but I gave it a go.

After making the 45-minute commute from my home, I arrived at the clinic at exactly 5:30 on a Monday evening. I scribbled my name on a small slip of paper, handed it to the receptionist, and took a seat in a waiting room crowded with students, broke workers, and homeless people. A nurse came out and told everyone to sit tight; the dentists were taking our names into a separate room and she’d return soon with their random choices. Ten minutes later, she came out again, read off three names, and then told everyone else to go home.

The room had been quiet as we all waited to see who’d won, but when a young blond girl with designer jeans and a fancy cell phone rose to claim her prize, the atmosphere became tense.

"That’s fucking bullshit," said a man with dirt on his face and ripped boots. "I’ve been coming here for weeks. This is her first fucking time!"

One of the dentists apologized and reminded us that we were welcome to keep trying as many times as we liked. I took his advice and returned three more times, missing a day of study or work for every fruitless visit until I gave up. One of my teeth in the back had started aching like hell, and I couldn’t stomach the wait any longer.

I broadened my search to include dental schools like that at the University of California San Francisco, where the wait times were rumored to be long, but once on the list, getting work done was guaranteed. After talking to students at the UCSF clinic, though, I realized treatment would require several days off from work and school because each step a student made during surgery would have to be approved by a busy professor and analyzed by other students. And the discount wasn’t exactly phenomenal.

The average cost of a single complete root canal procedure (root canal, post, and crown) at UCSF is more than $1,100, almost twice the amount I wound up paying in Mexico and way more than I could afford at the time.

So I scrapped the dental-school idea and dug deeper, figuring that if I couldn’t find free or cheap dental work, I could at least find a place that offered a payment plan. And I did find such a place.

Western Dental is like the McDonald’s of dental clinics. With multiple locations in almost every city in California, it’s effectively cornered the market on affordable dental work. Only it’s not cheap. A complete root canal procedure on one tooth can cost up to $1,590 — a lot less than a regular dentist, but much more than a dental school and about three times as much as Dr. Lopez charged me in Mexico. People flock to Western Dental because it lets you pay off your dental work like you would a car. You plunk down $99 for a yearlong membership, make a 20 to 30 percent down payment, and then pay the rest off monthly over the course of one year. And Western Dental doesn’t take your credit history into account when working out a plan.

Out of desperation, I eventually did get one of my teeth fixed at the Mission and 24th Street location, and wound up paying a $350 deposit and monthly installments of $110 for the next 12 months.

CAVITY CAVEATS


With my most painful tooth taken care of, I could now focus on finding a better deal, which is how I wound up in Mexico. So far it seems to have been a pretty smart decision. My new teeth look great and they’re holding up fine. I was treated extremely well by Dr. Lopez’s staff. But there are many reasons not go to Mexico for cheap dental work. And Brad Hatfield, a Korean War vet and retired city planner from Arizona City who asked that I not use his real name, knows them all.

Hatfield has been making the three-hour trip to Los Algodones for nearly a decade. He’s seen the town evolve from a haven for cheap trinkets and booze into what it is now: a medical resort for Americans with expensive tooth and eye issues. Hatfield started going to Los Algodones when he realized that even with his insurance he’d never be able to afford necessary dental work. But now, many years and thousands of dollars later, he’s learned his lesson.

"The problem with dentistry in Mexico," says Hatfield, "is that there’s no recourse. If something bad happens, you can’t sue anyone. All you can do is ask for your money back." And that’s just what Hatfield did when he returned from Los Algodones recently and discovered that his new teeth were worthless. Indeed, he claims that almost none of the work he’s gotten in Mexico has held up longer than a year or so.

This last time was the worst. "As soon as I got home," says Hatfield, "my gums started hurting really bad and bleeding off and on." When he called his clinic to complain, they denied his request for a refund and invited him back for some discounted work instead. Hatfield went back, got the work done, and thought his problems were over. But a few days later he realized they weren’t. "I was sitting here eating a piece of chocolate, and all of a sudden I realized I was chewing on two of my teeth and the bridge that was connecting them. All the work they had done had just fallen out."

Hatfield has tried repeatedly to get his dentist to refund his money back, but all he gets in response are invitations to return for more work. "Now they want to just rip all my teeth out and give me a full set of implants. It’s going to cost thousands of dollars on top of the $10,000 I’ve already spent there over the past year."

Hatfield is currently trying to get his problems fixed at a dental college in Mesa, Arizona, but he’s facing steeper prices and will probably have to return to Mexico soon. "My dental and medical problems have ruined me as a person," he says. "I can’t get a job because my teeth are so screwed up, and I can’t think through all this pain. I just don’t understand why dental work is so expensive. It’s much worse than medical."

THE BIG YANK


Hatfield brings up a good point. For some reason dental issues aren’t included in national or local debates about health care. Healthy San Francisco, the universal, citywide health care access program operated by the San Francisco Department of Public Health, doesn’t cover access to dental services, which were never even considered for inclusion. When reached by the Guardian for comment on this exclusion, SFDPH spokesperson Eileen Shields stressed the difference between the city’s program and regular insurance plans, saying "[Healthy San Francisco] is a health access plan, providing access to basic medical care. I mean, my health plan doesn’t even include dental — does yours?"

Denti-Cal, the state dental insurance program offered as part of Medi-Cal, is an option for California residents with a low income, a social security number, and at least one child. But it obviously doesn’t help the throngs who fill the waiting rooms of Western Dental. San Francisco General Hospital keeps an oral surgeon on call for extreme emergencies but if you want your janked-out teeth replaced or aren’t doubled over in chronic pain, SF General can’t help you.

It doesn’t look like any of this is changing soon. None of the candidates running for president this year has announced a platform that specifically deals with the high cost of dental care in America. Why? Why are medical and dental issues treated as two separate entities? And why is it so hard to afford dental treatment even with insurance?

Hsieh of the BFC thinks it may have to do with the fact that dental issues aren’t thought to be as life-threatening as medical issues. But if an infected tooth is left untreated, it can lead to death just as surely as unchecked pneumonia. On its Web site, the ADA acknowledges the high cost of dental insurance but privileges prevention over treatment, claiming that most dental problems are preventable. If Americans would just take care of their teeth, use their paltry insurance plans for routine checkups, and quit eating so much candy, they wouldn’t have to get root canals. But I brush after meals, floss regularly, and stay away from sweets — and I’ve been in and out of dental clinics with major problems since I was five.

Another theory has to do with the high costs of dental school and specialized equipment, which makes sense. But the truth of the matter, commonly pointed out in the ongoing health care debate, is that mixing profit with patients is a recipe for disaster. As long as insurance companies are able to make billions by fleecing their customers, and as long as dental clinics and drug companies are allowed to set their own prices, the general population is going to be cavity ridden and kind of ugly.

For now, it seems dental tourism may be the best option for people with normal-to-low incomes and chronic problems. Two months after my visit to Mexico, my teeth feel much better and I’m back on solid food. But this kind of travel isn’t for the fainthearted. The weather and food in Los Algodones are great. But getting your teeth ripped out and reconstructed in a foreign country with no legal recourse is dangerous and scary, especially during the high-traffic winter season when the tendency to rush through patients escalates.

My triple root canal, for example, took a mere two visits. The doctors hacked away for 10 hours straight, let me heal for one day, and then stuck on the crowns and pocketed my check. I stumbled out of Dr. Lopez’s office a few days before New Year’s, in a Novocain-induced daze, with blood on my shirt and pieces of rubber molding stuck to my cheeks. My jaws and head ached as I shuffled through the mile-long border-crossing corridor, sweating and dry-heaving.

As I approached the checkpoint, I wondered if I had made the right choice.

Then I remembered that I hadn’t actually made one. It was this or nothing.

Emma Lierley contributed to this report.


>>View a video interview with a Canadian dental tourist

“Insurance is not care.”

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If you want a little perspective on the Governor’s health plan, take a minute and read this amazing story (thanks, Calitics) about a massive protest organized to get a desperately ill 17-year-old girl a liver transplant. The liver was available; the doctors were ready. The insurance company wouldn’t pay for it.

Here’s what Rose Ann DeMoro of the California Nurses Association had to say:

“Every politician who thinks the answer to our healthcare crisis is more insurance should stop and think about Nataline Sarkysian,” said DeMoro. “Insurance is not care. Paying for insurance coverage is not the same as assuring you will receive appropriate care, even when recommended by a physician as it was for Nataline. Insurance corporations profit by denying care to the sick, and that is no way to run a humane healthcare system.”

I hope the California state Senate is listening.

Money and politics

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› sarah@sfbg.com

The upcoming election hasn’t generated much voter interest, with only a couple of measures that seem likely to have an impact. But corporate interests in San Francisco and beyond are still spending big money — in ways that are secretive, suspicious, and sometimes contradictory — to influence the election and win the gratitude of elected officials.

Although the final preelection campaign statements were due Oct. 25, the money continues to roll in. And perhaps most ominously, many campaign committees are spending far more than they are taking in, effectively using this accrued debt to hide contributors until after the election.

And almost invariably, the person at the center of such schemes — who facilitates the most creative and unsettling spending by downtown political interests — is notorious campaign finance attorney Jim Sutton, who also serves as Mayor Gavin Newsom’s treasurer (and didn’t return our calls for comment by press time).

Political donations are supposed to be transparent and reflect popular support for some campaign. But once again, this election is showing the disproportionate influence that corporations have on local politics and the difficulties faced in trying to accurately trace that influence.

There are "No on K" billboards all over San Francisco, showing a giant image of a man’s empty pocket alongside the dubious claim that "Proposition K will cut $20 million from Muni." The signs were created and funded by Clear Channel Outdoor.

Prop. K is an advisory measure that the Board of Supervisors placed on the ballot this fall to ask whether voters want to restrict advertising on public spaces like bus stops. But it was aimed at Clear Channel Outdoor’s contract to maintain 1,100 city bus shelters and sell advertising on them, which was approved by the Board of Supervisors on Oct. 23. In exchange, the CCO agreed to pay the Metropolitan Transportation Authority $5 million annually, plus 45 percent of its annual revenues from shelter ad revenues.

Nonetheless, the measure would put city voters on record as opposing the CCO’s basic business model, so the company fought back. The "No on K — Citizens to Protect Muni Services" filing suggests that there is no citizen involvement in the No on K campaign. So far, No on K has only received donations from Clear Channel Outdoor, including $120,000 in cash and $55,750 in in-kind contributions of radio time and ad space.

Maybe Clear Channel really is trying to help Muni get more money, rather than pad its own profits. After all, its parent corporation, Clear Channel International, donated $20,000 to support Muni reform measure Proposition A — authored by Board of Supervisors president Aaron Peskin — on Oct. 15, just days before Clear Channel Outdoor won its big bus transit deal with the city.

Yet following the corporate money even further makes it clear that altruism isn’t what motivates corporate spending. No on K also benefited from independent expenditures by the San Francisco Chamber of Commerce 21st Century Committee, a general-purpose committee created in 1999, which received major funding this year from the Gap ($10,000), Pacific Gas and Electric Co. ($7,500), Bechtel ($5,000), Catholic Healthcare West ($5,000), and Clear Channel Outdoor ($1,000).

The 21st Century Committee also spent $716 for newspaper ads opposing Prop. A, which would net the MTA at least $26 million per year from the city’s General Fund. Sutton — a former chair of the California Republican Party — and his associates effectively control the 21st Century Committee, which is also helping Newsom, his top client, avoid facing the Board of Supervisors in public. The committee has made independent expenditures opposing Proposition E, a charter amendment that would require the mayor to make monthly appearances before the board, something voters approved last year as an advisory measure. According to Newsom spokesperson Nathan Ballard, defeating that measure is the mayor’s top priority this election.

"I think he’s focused on his own race and also Question Time. There’s where he’s spending his resources," Ballard said when asked why Newsom isn’t campaigning or fundraising for the Yes on A and No on H campaigns, even though he supports those positions.

The 21st Century Committee has also made independent expenditures in support of Proposition C (which would require public hearings for measures that the board or the mayor places on the ballot), Proposition H (see "Transit or Traffic," page 18), Proposition I (which would establish an Office of Small Business), and Proposition J (Newsom’s wireless Internet advisory measure).

Each of these ballot measures has a committee dedicated to raising funds, but as of Oct. 25, only the Small Business Campaign (Yes on C) appeared to have no outstanding debts, or accrued funds, as they are called in campaign finance circles. Maybe that’s because the Small Business Campaign got $10,000 from the 21st Century Committee, $5,000 from PG&E, $2,500 from AT&T, $8,500 from the SF Small Business Advocates, and $1,000 from the Building Owners and Manufacturers Association of San Francisco’s political action committee.

Yes on C also got a $7,500 contribution from the Committee on Jobs Government Reform Fund, which has ties to Clear Channel, the MTA, and efforts to influence local transportation policy. Records show that on Nov. 4, 2005 — just before the election — the Committee on Jobs Government Reform Fund reported a $6,900 "loan" for radio airtime and production costs from Clear Channel to help defeat a measure that would have split the MTA appointments between the mayor and the Board of Supervisors.

Fast-forward to Oct. 3 of this year, when the Committee on Jobs, which reported its "loan" as accrued funds for almost two years, reported that this debt has now been forgiven. Which is odd, given that, as of Oct. 25, the Committee on Jobs had a cash balance of $778,000 — and had just received $35,000 from financier and Committee on Jobs board member Warren Hellman, $35,000 from AT&T, and $50,000 from the Charles Schwab Corp.

Equally interesting is the fact that the day after the Oct. 25 preelection filing deadline, the Committee on Jobs gave $25,000 to the Sutton-controlled No on E: Let’s Really Work Together Coalition. Such large late contributions require a notice to Ethics that can often escape notice by the media and voters.

The donation perhaps went to help balance the committee’s books; despite receiving $85,084 in monetary contributions, including $10,000 from attorney Joe Cotchett and society maven Dede Wilsey, No on E spent $110,244 before Oct. 25, leaving it with $26,610 in accrued debt.

No on E isn’t the only Sutton-controlled committee whose spending has outpaced donations received: as of Oct. 25 the Yes on H–No on A pro-parking committee and Newsom’s WiFi for All, Yes on J committee, not to mention the Gavin Newsom for Mayor campaign, were all registering large amounts of accrued debt.

Having these debts isn’t illegal. And it’s not unusual for a campaign to have a pile of unpaid bills at the time of its last preelection finance filing. But as Ethics Commission director John St. Croix told the Guardian, accrued funds "shouldn’t be used to hide who your contributors are. The idea of disclosure is to let voters know ahead of elections who is trying to influence their vote."

St. Croix points to the fact that committees are required to make reports every 24 hours in the 16 days before an election "so you know what they are spending on…. But if committees don’t report campaign contributions and people fundraise after the election, that could be a de facto way to hide who the contributors are."

And while Sutton has been characterized by many, including the Guardian (see "The Political Puppeteer," 2/2/04), as the dark prince of campaign finance, St. Croix says he doesn’t automatically suspect something is wrong just because a campaign has a lot of accrued debt.

"But if people suspect that to be the case and they file a complaint, Ethics investigates," St. Croix said, adding that for him, "really massive accrued funds would be a red flag."

Asked what he meant by massive, St. Croix said, "It depends on the office. You might expect a lot more to accrue in a mayor’s race or large campaigns that tend to do a lot of last-minute spending."

As of Oct. 25, Gavin Newsom for Mayor had received $1.1 million and spent $1.3 million, had a cash balance of $457,994 — and was reporting $97,548 in accrued debt, with $46,500 owed to Storefront Political Media, the company run by Newsom’s campaign manager, Eric Jaye.

Noting that Ethics’ job is "to get people to file on time and chase after those who don’t," St. Croix said that those who don’t file and are making major expenditures right before an election are the ones who will face the biggest fines. "They could face $5,000 per violation, which could be $5,000 for every contribution that was made to finance a smear campaign and wasn’t reported," he said.

The biggest fine the Ethics Commission has ever issued was $100,000 for Sutton’s failure to report until after the 2002 election a late $800,000 contribution from PG&E to help defeat a public power measure.

Compared to other years, the amounts of accrued debt in this election may look small, but former Ethics commissioner Joe Lynn points to a disturbing pattern in which Sutton-controlled committees were insolvent before the election, then raised funds later or, as in the case of the Committee on Jobs, magically saw their debts forgiven.

"If I am a candidate running for mayor, like Gavin Newsom, and I personally rake up $100,000 in debt and have a big financial statement, then that means there’s a creditor willing to advance me those funds," Lynn said. "But if the debt has been raked up by a ballot measure committee, then who is responsible? Why would vendors spend $10,000 for that committee unless they knew that debt was wired from the get-go?"

But the result is the same: voters don’t know who donated to the campaign until after the votes have been cast. A clear historical example of this debt scheme can be seen in the June 2006 No on D Laguna Honda campaign. In its last preelection report, No on D had $59,750 in contributions, $18,664 in expenditures — and $130,224 in debt.

But during the 16 days before the election, No on D suddenly got $110,000 in late contributions from the usual suspects downtown, including $2,500 from Hellman, $15,000 from Turner Construction, $10,000 from Wilsey, $2,000 from the San Francisco Chamber of Commerce, and $2,500 from the Building Owners and Manufacturers Association of San Francisco.

As Lynn explains, campaign finance laws only require disclosure of contributions, not expenditures, made in the 16 days before an election — and only $64,000 worth of the contributions used to pay off No on D’s accrued expenses were disclosed, with $10,000 each from the California Pacific Medical Center and Kaiser Permanente trickling in on or after Election Day.

This year campaign finance watchdogs like Lynn note that the Sutton-controlled Yes on H–No on A committee has been hiding its contributors. In its first preelection report, filed Sept. 22, Yes on H showed $113,750 in contributions, $111,376.18 in expenditures, and $69,806.98 in accrued debt.

A month later it has doubled its contributions, tripled its expenditures — and had increased its accrued debt to $77,509. Lynn predicts that Yes on H’s accrued debt will be paid down by late contributions after the election or forgiven later on.

"The solution to the debt scheme is twofold," Lynn said. "Prosecute people doing the scheme and pass a law prohibiting campaigns from making more expenditures than they have contributions. Technically there is nothing illegal about reporting more debt that you have the cash or contributions to pay, but no businessperson regularly offers services in situations where it isn’t clear that they will be paid."

Since the Oct. 25 filing deadline, late contributions have continued to pour into No on E big-time, for a total of $59,500. That includes $25,000 from the Committee on Jobs, $2,500 from Jonathan Holzman, $6,000 from Elaine Tsakopoulos-Kounalakis, $1,000 from Chris Giouzelis, $1,000 from Nick Kontos, $1,000 from Farrah Makras, $1,000 from Victor Makras, $1,000 from Makras Real Estate, $5,000 from John Pakrais, $1,000 from Mike Silva, $1,000 from Western Apartments, $5,000 from Maurice Kanbar, and $5,000 from the San Francisco Apartment Association PAC.

The Yes on A committee hasn’t used the accrued debt scheme, but it has been the second-largest recipient of late contributions. It received $57,000 in late contributions, with donations from Engeo ($1,000), Singer Associates ($2,500), Trinity Management Services ($10,000), Elysian Hotels and Resorts ($5,000), Luxor Cabs ($1,000), Marriott International ($15,000), the SF Police Officers Association ($2,000), Sprinkler Fitters and Apprentices ($1,500), Barbary Coast Consulting ($2,500), and SEIU International ($3,397.14).

No on H (Neighbors Against Traffic and Pollution) received $4,500 in late contributions, with donations from Norcal Carpenters, Alice and William Russell-Shapiro, and Amandeep Jawa. And in what looks like a classic case of hedging bets, Singer Associates has made a $2,500 late contribution to both Yes on H and No on H.

Steven Mele, who is treasurer for Yes on A and No on H, told the Guardian, "There’s some people that time their contributions, but their names are out there, reported on public sites. A lot of corporate money comes in prior to the last deadline, then some afterwards. If campaigns are running with a lot of accrued debt, then those people must have an idea of what money is going to come in."

Unlike the campaigns controlled by the Sutton Law Firm, Mele’s committees, which work with Stearns Consulting, are not carrying massive loads of unpaid debt. Yes on A had received $302,452 and spent $279,890 and had $17,749 in debt as of Oct. 25. No on H had received $134,458 and spent $124,088 and had no debt as of Oct. 25.
Mele also believes that while campaign finance rules were written to make the money trail more transparent, "They’ve resulted in the public being inundated with so much information that they tend to glaze over."

Sutter bleeds St. Luke’s

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› gwschulz@sfbg.com

Dr. Bonita Palmer has worked at the embattled St. Luke’s Hospital on the southwest corner of César Chávez and Valencia for 17 years.

Before a packed room of union organizers and religious leaders Sept. 12 at St. Mary’s Cathedral near Japantown, she gave a brief speech about her experiences at the beloved but financially troubled hospital.

"St. Luke’s has been struggling to stay afloat for many years," Palmer told the audience. "Under managed care, reimbursements are down, the numbers of uninsured patients are up, and the growing gap between income and cost of care stresses the health of working people."

Money woes at St. Luke’s are no secret. Its parent company, California Pacific Medical Center, an otherwise lucrative group of San Francisco hospitals owned by Sacramento’s Sutter Health, describes the losses at St. Luke’s as anywhere from $20 million to $30 million annually.

Patient advocates and unions representing St. Luke’s workers have long feared closure of the hospital and its badly needed acute-care services, which thousands of residents — the city’s poorest among them, living nearby in the SoMa, Mission, and Bayview–Hunters Point neighborhoods — often visit when they can’t get expensive medical treatment elsewhere.

The hospital continually faces cuts executed by the CPMC, from its downgraded neonatal nursery to the subacute unit, where, Palmer says, patients who require nonemergency but highly specialized care from professionals are being turned away. "Sutter scrapped its plan for a much-needed upgrade to our emergency room even as we continue to receive the overflow of patients from" San Francisco General Hospital, she said.

Staffers learned most recently that outpatient physical therapy, which had already been trimmed, will be done away with completely, while the hospital’s 36-bed inpatient psychiatric unit and outpatient clinic have already been closed. A woman in the audience confessed afterward that she was nearly brought to tears by Palmer’s tale.

The decisions only worsened Sutter’s reputation across Northern California for dwelling on its bottom line and further enraged the United Healthcare Workers–West union, which represents thousands of Sutter workers and with which the company has regularly battled for a decade.

St. Luke’s contains one of the most active emergency rooms in the city, and aside from General Hospital a mile or so away on Potrero Avenue, it serves more patients benefiting from Medi-Cal and Sutter’s version of charity care services than just about any other facility.

The CPMC, which fully merged with St. Luke’s in January, promises the hospital will be a part of the company’s future. But the CPMC also comes closer every day to beginning construction of a new $1.7 billion hospital on Cathedral Hill, closer to the city’s wealthiest neighborhoods. And critics worry that CPMC’s new bid proves not only where its priorities are but also that once-independent St. Luke’s — opened in 1871 by an Episcopal minister — will suffer death by a thousand cuts.

Sup. Tom Ammiano, who’s closely observed the fate of St. Luke’s for years, says the CPMC is slowly amputating one of the few hospitals left in the southern portion of San Francisco while paying lip service to nonprofit health outreach.

"They lie without guile," he said. "Waterboarding would be more enjoyable than dealing with these people."

Sutter initially took over St. Luke’s in 2001 as part of a settlement agreement after the hospital sued Sutter in 1999, alleging state antitrust violations in Sutter’s brokering of an exclusive contract with the Bay Area’s largest network of doctors. St. Luke’s officials claimed the contract stripped wealthier patients away from the hospital, which hurt its bottom line.

The settlement required Sutter to bankroll St. Luke’s with a series of subsidies — and included a promise of up to $20 million for needed retrofit work that doesn’t appear to have been done — while allowing the hospital to remain somewhat independent. The terms expired last year, and St. Luke’s has since been completely folded into the family of San Francisco hospitals known as the CPMC, which includes the Davies Campus, nestled between the Castro neighborhood and the Lower Haight, the Pacific Campus on Buchanan Street, and the California Campus in the opulent Pacific Heights area.

While St. Luke’s can’t complete a fiscal-year cycle without coming up short of cash, the CPMC as a subsidiary of Sutter Health earns tens of millions of dollars in net income annually, much of which is sent to Sutter’s home office in Sacramento. In 2003, for instance, the CPMC transferred $118 million in net income — the money remaining after expenses are covered, which any other business would call profit — out of the city. Other ailing Sutter-owned hospitals around the state receive inflows of money from Sacramento, such as a Santa Rosa medical center that got $16 million in 2003, according to documents Sutter must provide to the state.

"In good times, affiliates share a portion of their revenue in excess of their expenses to help strengthen the network through this shared balance-sheet approach," Sutter spokesperson Karen Garner told us. "And in times of need, our affiliates can count on the network to help ensure that those services can continue to be available to their local communities."

But Sutter has announced that it plans to close part of the money-losing Sutter Medical Center of Santa Rosa, which faces high seismic retrofit costs, fueling concerns that something similar will happen at St. Luke’s. Sutter also last year moved to sever ties with Marin General Hospital and wash its hands of a costly needed retrofit there. An acute-care facility in San Leandro that loses money may soon be closed as well, as locals there learned just this month when a Sutter employee leaked the news to the San Leandro Times.

"CPMC plans to stop serving unprofitable areas, ignoring their obligation to the community," Helen York Jones, a union steward of CPMC employees, said at a July rally outside St. Luke’s. "How can they be entrusted with a large share of the area’s health care system?"

For a supposedly nonprofit chain of hospitals, Sutter Health is very profitable, having one of its best years in 2006. Its net income from operations amounted to more than $500 million, an increase of 33 percent from the previous year, which its execs attributed to the company’s outsize investments. Sutter controls more than two dozen medical centers throughout California and one located in Hawaii.

The company’s mammoth $2 billion investment portfolio brought the company $159 million in returns last year. Sutter’s CPMC subsidiary also benefited from more than $50 million in local, state, and federal tax breaks during 2005, according to figures maintained by the San Francisco Department of Public Health.

Meanwhile, Sutter has announced plans to spend $1.1 billion fully replacing facilities in Sacramento and San Mateo. In fact, the company broke records in June when it acquired state-backed bond financing of $958 million — which essentially amounts to a low-interest, tax-free loan — which it intends to use for seismic retrofit projects at several of its hospitals across the state.

But according to state records, the company doesn’t intend to use any of the loan money for retrofitting the St. Luke’s campus, part of which the state has concluded poses "a significant risk of collapse and a danger to the public after a strong earthquake," according to state structural ratings. State law gives hospitals until 2013 to meet strict seismic standards or shut down.

"Sutter wants to use money to fuel their corporate expenses in markets that are making money or have the potential to make money," Sal Roselli, president of the United Healthcare Workers–<\d>West, said.

Roselli believes the CPMC wants to close the emergency room at St. Luke’s and more or less turn the hospital into a clinic, perhaps once the Cathedral Hill location is completed; Sutter, he said, promises to maintain community services during its hospital takeovers but often backslides on those promises within months.

CPMC spokesperson Kevin McCormack doesn’t outright deny the possibility that St. Luke’s will someday see vastly fewer ER patients.

"St. Luke’s is still going to be a vital part of anything we do in terms of providing health care in San Francisco," McCormack said. "We intend to strengthen its role — not just to keep it going, but to make it better. Because right now what happens is that a lot of people don’t have access to preventative care, so they end up using the emergency room when they have a problem with, say, diabetes or asthma."

But Ammiano remains skeptical.

"If we allow this to happen and if we can’t find alternatives," he said of the cuts at St. Luke’s, "it’s really going to not just tear a hole in the fabric of that neighborhood but also the whole southeast section."

Unions intervene in GGRA lawsuit

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By Sarah Phelan
Last week, a judge granted four unions–The S.F. Labor Council, SEIU Local 1021, SEIU United Healthcare Workers West and Unite Here Local 2—an intervention in the suit that Golden Gate Restaurant Association, a non-profit trade association, has brought against the City and County in the matter of the soon-to-be implemented San Francisco Health Care Security Ordinance.
GGRA is arguing that the mandatory aspect of this local ordinance is preempted by federal law.
Specifically, GGRA’s beef is with the part of the ordinance that requires employers with 20 employees or more to spend a minimum amount per hour worked to provide health care benefits. Employers would also have to maintain records of health care benefit spending, record and report such spending and make records available for inspection. These mandatory requirements won’t be implemented until January 2008, but the City and County will start coverage of unemployed (and therefore uninsured) San Francisco residents, as of July 1, 2007.

The Martin Luther King you don’t see on TV

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It’s become a TV ritual: Every year on April 4, as Americans commemorate Martin Luther King’s death, we get perfunctory network news reports about “the slain civil rights leader.” The remarkable thing about these reviews of King’s life is that several years – his last years – are totally missing, as if flushed down a memory hole. What TV viewers see is a closed loop of familiar file footage: King battling desegregation in Birmingham (1963); reciting his dream of racial harmony at the rally in Washington (1963); marching for voting rights in Selma, Alabama (1965); and finally, lying dead on the motel balcony in Memphis (1968). An alert viewer might notice that the chronology jumps from 1965 to 1968. Yet King didn’t take a sabbatical near the end of his life. In fact, he was speaking and organizing as diligently as ever. Almost all of those speeches were filmed or taped. But they’re not shown today on TV. Why? It’s because national news media have never come to terms with what Martin Luther King Jr. stood for during his final years. In the early 1960s, when King focused his challenge on legalized racial discrimination in the South, most major media were his allies. Network TV and national publications graphically showed the police dogs and bullwhips and cattle prods used against Southern blacks who sought the right to vote or to eat at a public lunch counter. But after passage of civil rights acts in 1964 and 1965, King began challenging the nation’s fundamental priorities. He maintained that civil rights laws were empty without “human rights” – including economic rights. For people too poor to eat at a restaurant or afford a decent home, King said, anti-discrimination laws were hollow. Noting that a majority of Americans below the poverty line were white, King developed a class perspective. He decried the huge income gaps between rich and poor, and called for “radical changes in the structure of our society” to redistribute wealth and power. “True compassion,” King declared, “is more than flinging a coin to a beggar; it comes to see that an edifice which produces beggars needs restructuring.” By 1967, King had also become the country’s most prominent opponent of the Vietnam War, and a staunch critic of overall U.S. foreign policy, which he deemed militaristic. In his “Beyond Vietnam” speech delivered at New York’s Riverside Church on April 4, 1967 –– a year to the day before he was murdered –– King called the United States “the greatest purveyor of violence in the world today.” (Full text/audio here: http://www.informationclearinghouse.info/article2564.htm) From Vietnam to South Africa to Latin America, King said, the U.S. was “on the wrong side of a world revolution.” King questioned “our alliance with the landed gentry of Latin America,” and asked why the U.S. was suppressing revolutions “of the shirtless and barefoot people” in the Third World, instead of supporting them. In foreign policy, King also offered an economic critique, complaining about “capitalists of the West investing huge sums of money in Asia, Africa and South America, only to take the profits out with no concern for the social betterment of the countries.” You haven’t heard the “Beyond Vietnam” speech on network news retrospectives, but national media heard it loud and clear back in 1967 – and loudly denounced it. Time magazine called it “demagogic slander that sounded like a script for Radio Hanoi.” The Washington Post patronized that “King has diminished his usefulness to his cause, his country, his people.” In his last months, King was organizing the most militant project of his life: the Poor People’s Campaign. He crisscrossed the country to assemble “a multiracial army of the poor” that would descend on Washington – engaging in nonviolent civil disobedience at the Capitol, if need be – until Congress enacted a poor people’s bill of rights. Reader’s Digest warned of an “insurrection.” King’s economic bill of rights called for massive government jobs programs to rebuild America’s cities. He saw a crying need to confront a Congress that had demonstrated its “hostility to the poor” – appropriating “military funds with alacrity and generosity,” but providing “poverty funds with miserliness.” How familiar that sounds today, nearly 40 years after King’s efforts on behalf of the poor people’s mobilization were cut short by an assassin’s bullet. In 2007, in this nation of immense wealth, the White House and most in Congress continue to accept the perpetuation of poverty. They fund foreign wars with “alacrity and generosity,” while being miserly in dispensing funds for education and healthcare and environmental cleanup. And those priorities are largely unquestioned by mainstream media. No surprise that they tell us so little about the last years of Martin Luther King’s life. ___________________________________________ Jeff Cohen is the author of “Cable News Confidential: My Misadventures in Corporate Media.” Norman Solomon’s book “War Made Easy: How Presidents and Pundits Keep Spinning Us to Death” is out in paperback.

Valentine’s Day events

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PARTIES, EVENTS, AND BENEFITS

"Amor del Mar" Aquarium of the Bay at Pier 39, Embarcadero at Bay; 623-5323, www.aquariumofthebay.com. Wed/14, 7pm, $125 single, $200 couple. Support the nonprofit Aquarium of the Bay Foundation during this romantic evening featuring cocktails, culinary delights, and a live salsa band.

"Cupid Stunt — Club Neon’s Third Annual Valentine’s Day Underwear Party" Rickshaw Stop, 155 Fell; 861-2011, www.neonsf.com. Wed/14, 9pm, $10. A chance to dance with no pants, featuring DJs, a lingerie fashion show and trunk sale by designer Danielle Rodriguez, and Valentine’s visuals by Chris Golden.

"Isn’t It Romantic: New Connections Valentine’s Day Benefit Concert" Castro Theatre, 429 Castro; www.newconnections.org. Wed/14, 7:30pm, $20. Local chanteuse Nancy Gilliland sings love songs from the ’20s, ’30s, and ’40s to benefit New Connections’ HIV/AIDS healthcare services. Tickets available via www.ticketweb.com.

"Love Your Way to Abolition: Party with Saint Valentine" El Rio, 3158 Mission; www.elriosf.com. Thurs/15, 6pm, $5-50. This benefit for Justice Now, an organization that works with incarcerated women and local communities to build a safe, compassionate world without prisons, will feature speakers and live music.

"Pink’s Valentine’s Party: Cupid’s Back" 296 Liberty; www.pinkmag.com. Sat/10, 8pm, $25. This party will raise funds to support the GLBT Historical Society’s world-class archives of queer history. Romance tips given by Clint Griess, life coach on Queer Eye for the Straight Guy, and an open bar provided by Bulldog Gin and Peroni Beer. Space is limited.

"Randall Museum Presents a Valentine’s Day Sex Tour" Randall Museum, 199 Museum Way; 554-9600, www.randallmuseum.org. Thurs/15, 7:30pm, free, donations encouraged. Guest speaker Jane Tollini of the San Francisco Zoo leads an entertaining and educational romp through the wild kingdom, featuring fairly explicit photos and her own blend of knowledge and humor.

"Sea of Love Scavenger Hunt" California Academy of Sciences, 875 Howard; 321-8000, www.calacademy.org. Sat/10-Thurs/15, 10am-5pm, free with museum admission. Embark on a self-guided scavenger hunt to find the museum’s most amorous creatures and earn fun prizes. G-rated tours available for children.

"The Sweet Cheat Gone — a Free Public Street Game" Meet at corner of Steuart and Market; www.sfzero.org. Sat/10, 7pm, free. Participants take sides in the prosecution of a defendant accused of committing a crime. Teams will travel by foot, bike, or Muni (no cars or taxis) to various San Francisco locations, competing with each other to collect or destroy evidence and prove their case.

"Valentines, Fashion, and You" Nordstrom San Francisco Center, 865 Market; 243-8500, ext 1240. Sat/10, 12pm, free. Event features live models, the hottest fashions in lingerie, refreshments, and prize drawings. Space is limited to the first 100 who RSVP to the number listed above.

"The Vampire Tour of San Francisco" Meet at corner of California and Taylor; (650) 279-1840 (reservations), www.sfvampiretour.com. Wed/14, 8pm, $15-20. Spend Valentine’s Day in the company of a vampire, and take an amorous walk through beautiful Nob Hill. A few special guests are dying to meet you.

"Woo at the Zoo" San Francisco Zoo; Sloat Blvd at 47th St; 753-7263, www.sfzoo.org. Sun/11, 12pm, Tues/13-Wed/14, 6pm, $70. This new and dynamic multimedia event provides an entertaining approach to the erotic life of animals, including how they choose their mates and raise their families. The 90-minute tour features up-close animal encounters and romantic refreshments. Admission includes presentation, refreshments, parking, and zoo admission.

BAY AREA

"Have a Heart" MOCHA — Museum of Children’s Art, 528 Ninth St, Oakl; 510-465-8770, www.mocha.org. Sat/10-Sun/11, 1pm-4pm, $5 per child. Make a papier-mâché heart sculpture or a lacy wire heart mobile and design unique cards for your loved ones.

"Nils Peterson’s Valentine’s Day Poetry Reading" Le Petit Trianon Theatre, 72 N Fifth St, San Jose; www.pcsj.org. Wed/14, 5:30pm, $10 includes glass of wine. The Poetry Center San Jose presents Nils Peterson, whose long literary career includes a 30-year tenure teaching creative writing at San Jose State University. Also featuring Sally Ashton.

"Saint Valentine’s Day Poetry Reading" Frank Bette Center for the Arts, 1601 Paru, Alameda; (510) 523-6957, www.frankbettecenter.org. Wed/14, 7pm, free. Alameda’s poet laureate Mary Ridge and others will read about people they have loved and welcomed.

"Week of Valentines at Habitot Children’s Museum" Habitot Children’s Museum, 2065 Kittredge, Berk; (510) 647-1111, www.habitot.org. Wed/7-Wed/14, $6 per child and $5 for accompanying adult. Add your unique artistic touch to a large heart sculpture and create handmade Valentine cards for your family and loved ones using recycled materials at this award-winning discovery museum for young adults.

FILM, MUSIC, AND PERFORMANCE

"BATS Improv Special Valentine’s Day Performance" Bayfront Theater, Fort Mason Center, bldg B, Marina at Laguna; 474-8935, www.improv.com. Wed/14, 8pm, $10 advance, $15 at the door. In the first half of the show, audience suggestions will spark scenes and improv games that illustrate the humor in romance. In the second half, the audience will supply a title and a theme for an improvised story that will be created on the spot by BATS’s improv troupe.

"Club Chuckles Presents: Soft Rock vs. Smooth Jazz Valentine’s Day Bash" Hemlock Tavern, 1131 Polk; 923-0923, www.hemlocktavern.com. Wed/14, 9pm, $5. A battle of the bands that pits the forces of soft rock against smooth jazz, as played by bands Cool Nites and the Sound Painters, respectively. Moderated by comedy duo Carole Murphy and Mitzi Fitzsimmons, who will also dispense advice to the lovelorn and romantically challenged.

"Love Bites the Hand That Feeds It" Theatre Rhinoceros, 2940 16th St; 861-5079, www.therhino.org. Fri/9-Sat/10, 8pm, $15-$30. The Lesbian/Gay Chorus of San Francisco presents its annual anti-Valentine’s Day cabaret. Both evenings feature a variety of solo, duet, and group performances and will include a fifty-fifty raffle. The Feb. 10 event features a live auction.

"The Love Show by the Un-Scripted Theater Company" Phoenix Theatre, 414 Mason; www.un-scripted.com. Wed/14, 8pm, $15-40. "The Love Show" will feature songs, scenes, and love-themed fun, all completely improvised. Couples and singles are encouraged to come. (There will even be a "quirky alone" seating section.)

"Mortified: Doomed Valentine’s Show" Make-Out Room, 3225 22nd St; www.makeoutroom.com. Fri/16-Sat/17, 8pm, $12. Frequently featured on This American Life, Mortified is a comic excavation of teen angst artifacts (journals, poems, letters, lyrics, and home movies), as shared by their original authors. More information at www.getmortified.com.

"Nice Jewish Girls Gone Bad" Red Devil Lounge, 1695 Polk; www.nicejewishgirlsgonebad.com. Wed/14, 9pm, $12. Featuring comedy, music, spoken word, and burlesque from performers seen on Comedy Central, HBO, and MTV. These girls thrill everyone but their mothers.

"Valentine’s Day Film Program: Labor of Love" Exploratorium, McBean Theater, 3601 Lyon; www.exploratorium.edu. Sat/10, 2pm, free with museum admission. In the spirit of Valentine’s Day, the Exploratorium presents a program of short, expressive films about people who love what they do.

BAY AREA

"Comedy Night in Novato" Pacheco Playhouse, 484 Ignacio Blvd, Novato; 883-4498, www.pachecoplayhouse.org. Wed/14, 6:30pm and 8:30pm, $15. Local comics bring levity to this most romantic of nights. A champagne celebration will close the evening.

"Valentine’s Day Comedy with Johnny Steele and Pals" Village Theater, 223 Front, Danville; (925) 314-3400; www.johnnysteele.com; Wed/14, 8pm, $18. Winner of the San Francisco International Comedy Competition, Johnny Steele has been plying his trade for nearly 20 years. A cavalcade of comics joins him for the third annual event.

ART SHOWS

BAY AREA

"All Heart" Expressions Gallery, 2035 Ashby, Berk; (510) 644-4930, www.expressionsgallery.org. Fri/10, 6pm, free. A collaborative art show with Children’s Hospital Oakland and Art for Life Foundation. The show runs through March 9. Presenting the work of patients participating in Art for Life programs as part of their care and rehabilitation. *

A tough pill to swallow

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The furor over escautf8g prescription drug prices has inspired dozens of state investigations and civil lawsuits in recent years across the United States, most of them targeting manufacturers.
But another factor in the increases quietly surfaced Oct. 6 in a Boston federal courthouse. Two major Bay Area companies were accused in court documents of infutf8g the cost of prescription drugs to the tune of an estimated $7 billion between 2001 and 2005.
The Wall Street Journal first reported in early October that a drug data publishing company based in San Bruno called First DataBank had reached a settlement with a group of unions in Massachusetts and Pennsylvania over how the company gathered and presented prices in the pharmaceutical catalog that it’s maintained for years.
First DataBank is a subsidiary of the New York–based media empire Hearst Corp., owner of the San Francisco Chronicle, Esquire, and dozens of other publications across the country. Another company still being targeted by the plaintiffs is the San Francisco–based drug wholesaler McKesson Corp., which earned $88 billion in revenue last year and is ranked 16th among Fortune 500 companies.
First DataBank’s price listings play an enormous role in determining what Americans pay for medications. When you receive a bottle of antibiotics to treat an infection, for instance, your private health insurer or state Medicaid program (known as Medi-Cal here) will refer to First DataBank’s listed drug prices as a benchmark to determine what it’ll pay the pharmacy as a reimbursement. That means if the benchmark goes up, so too can your insurance premiums and the cost to state governments.
The settlement, according to federal records, forces First DataBank to adjust the formula it uses to determine those prices. An economist hired by the plaintiffs testified that the savings in 2007 alone for consumers could amount to a staggering $4 billion. First DataBank has also agreed to cease publishing the prices in their drug guides within two years.
Physicians, hospitals, pharmacists, and all manner of other health care professionals pay First DataBank a subscription rate for access to a digital clearinghouse of information on drug dosages and allergies, among other things.
More importantly, First DataBank publishes what’s known as an “average wholesale price” for more than 290,000 pharmaceuticals. There are three major drug wholesalers in the United States, including McKesson, that buy drugs directly from manufacturers and then mark up the price before selling the drugs to pharmacies. The average wholesale price — widely used around the country to determine what pharmacies will get as a reimbursement — is supposed to be a reasonable reflection of what the pharmacies pay the wholesalers for drugs.
First DataBank claimed to survey these wholesalers to come up with an average price that includes the markup, which it then lists in its drug-pricing database. But in recent years, the Journal reported, such surveys have been few and far between, and sometime around 2002, First DataBank inexplicably froze the markup at 25 percent, even though the prices pharmacies were actually paying fluctuated dramatically due to competition.
Citing testimony from one employee, the Journal notes that First DataBank began surveying only one company to come up with its average: McKesson. The cost to pharmacies still varied, but McKesson had reportedly standardized its markups on paper at 25 percent. That meant insurers and state health care administrators relying on First DataBank were making reimbursements that translated to higher profits for the pharmacies.
The employee’s testimony and documents in the case indicated that McKesson knew exactly what was happening. What remained unclear at press time was why First DataBank would choose to survey only McKesson or how it might have benefited from the decision.
The Journal notes the pharmacies were the only ones that stood to profit from the standardized markups, not McKesson directly. But internal McKesson e-mails show the company not only was aware of its impact on First DataBank’s published figures but hoped pharmacies would see McKesson working in their best interests — a marketing scheme, if you will.
An e-mail from one McKesson product manager gleefully exclaims that the profit for pharmacies dispensing a bottle of the cholesterol drug Lipitor leaped from $6.86 to $17.18.
First DataBank admitted no wrongdoing and is not paying money to the plaintiffs of the Boston settlement. The company was founded in 1977, and Hearst purchased it in 1980. Federal records show that in 1998, Hearst bought a $38 million company that owned one of First DataBank’s only real competitors, Medi-Span.
A later investigation by the Federal Trade Commission revealed that Hearst had failed to turn over key documents to the Justice Department’s antitrust division during the sale. As a result the feds slapped Hearst with a $4 million fine in 2001, at that time the largest premerger antitrust penalty in US history. The FTC also belatedly concluded that Hearst’s ownership of Medi-Span gave it a monopoly over the drug database market and not only required that Hearst give up Medi-Span but forced the company to disgorge $19 million in profits generated from the acquisition.
Hearst spokesperson Paul Luthringer directed us to a bare-bones statement when the Guardian called with questions about the Boston suit. “The allegations made in these actions have raised concerns with respect to the integrity of the pricing information that is provided to First DataBank for purposes of publishing [the average wholesale price],” the release states. “In light of these concerns, First DataBank has determined to make certain changes in its drug pricing reporting practices.”
Climbing drug costs can’t be attributed mainly to First DataBank or McKesson, of course. In fact, recent investigations and civil suits spearheaded to find out why prices have skyrocketed have focused on the manufacturers. During those inquiries First DataBank has been hit with dozens of subpoenas nationwide requesting company records and testimony, according to San Mateo Superior Court records. Many of those cases are still ongoing.
Attorneys for the plaintiffs in Boston who made McKesson and First DataBank defendants in the summer of 2005 declined to comment. McKesson also has remained tight-lipped since the Journal story was published. Spokesperson James Larkin said the company would not answer questions beyond a prepared statement.
“If First DataBank decided to survey McKesson only, it did so without telling McKesson,” the statement reads. “In fact, First DataBank has affirmed in an earlier lawsuit involving other parties that it never told McKesson that at times McKesson was the only wholesaler being surveyed.” SFBG
Here are links to key documents, including federal court records of the Oct. 6 Boston settlement with the Hearst-owned First DataBank (www.hagens-berman.com/first_data_bank_settlement.htm), the Justice Department’s antitrust fine of Hearst in 200l (www.usdoj.gov/atr/cases/indx330.htm), and the Federal Trade Commission decision requiring Hearst to give up its monopolistic subsidiary, Medi-Span (www.ftc.gov/bc/healthcare/antitrust/commissionactions.htm).

The first 40

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› bruce@sfbg.com
On Oct. 27, l966, my wife, Jean Dibble, and I and some journalist and literary friends published the first issue of the first alternative paper in the country that was designed expressly to compete with the local monopoly daily combine and offer an alternative voice for an urban community.
We called it the San Francisco Bay Guardian, named after the liberal Manchester Guardian of England, and declared in our statement of intent that the Guardian would be a new model for a big-city paper: we would be independent and locally owned and edited, and we would be alternative to and competitive with the San Francisco Examiner and San Francisco Chronicle, which were published under a joint operating agreement that allowed them to fix prices, pool profits, share markets, and avoid competition.
We stated that “the Guardian is proposed, not as a substitute for the daily press, but as a supplement that can do much that the San Francisco and suburban dailies, with their single ownership, visceral appeal and parochial stance, cannot and will not do.” And we played off the name Guardian by stating that we would be “liberal in assessing the present and past (supporting regional government, nuclear weapons control, welfare legislation, rapid transit, tax reform, consumer protection, planning, judicial review, de-escalation and a promptly negotiated settlement in Vietnam.)” But the Guardian would also be “conservative in preserving tradition (civil liberties and minority rights, natural resources, watersheds, our bay, our hills, our air and water).”
It was rather naive to challenge the Ex-Chron JOA with little more than a good idea and not much money and a wing and a prayer. We had almost no idea of what we were getting into in San Francisco, a venue that Warren Hinckle of Ramparts and many other defunct publications would later describe as the Bermuda Triangle of publishing. But we had, I suppose, the key ingredient of the entrepreneur — the power of ignorance and not knowing any better — and somehow thought that if we could just get a good paper going, the time being l966 and the place being San Francisco and the world being full of possibilities, we would make it, come hell or high water.
Well, after going through hell and high water and endless soap operas for four decades, Jean and I and the hundreds of people who have worked for the Guardian through the years have helped realize the paper’s original vision and created something quite extraordinary: an influential new form of independent alternative journalism that works in the marketplace and provides what little real competition there is to the monopoly dailies. And let me emphasize, the alternatives do not require government-sanctioned JOA monopolies and endless chains and clusters of dailies and the other monopolizing devices that dailies claim they need to survive.
Today I am delighted to report that there are alternative papers competing effectively with their local chains throughout the Bay Area (seven, more than any other region), throughout the state from Chico to San Diego (22, more than any other state), and throughout the nation (126 in 42 states, with a total circulation of 7.5 million, and more coming all the time). There are even cities with two and three competing alternatives, and there are cities where the monopoly daily is forced by the real alternatives to create faux alternatives to try to compete (it doesn’t work). And alas, there is now a Village Voice–New Times chain of 17 papers in major markets, including San Francisco and the East Bay, that is abandoning its alternative roots and moving to ape its daily brethren.
Jean and I met at the University of Nebraska at Lincoln in 1957. Two friends and I were driving around Lincoln one fine spring day, drinking gin and tonics, which were drawn from a tub of gin and tonic that we had mixed up and stashed in the trunk of our car. We happened upon Jean and her younger sister, Catherine, who had come from a Theta sorority function and were standing on a street corner waiting for their mother to pick them up and take them to the Dibble family home in nearby Bennet (population: 412). We stopped, convinced them to ride with us, and got them safely home. They declined our offer of gin and tonics, as did their astonished parents and grandmother when we arrived at the Dibble house.
Jean and I made a good team. We both had small-town Midwestern values and roots in family-owned small-business. Her father owned lumberyards in small towns in southeast Nebraska. Her maternal grandfather founded banks in Kansas and Nebraska and was the state-appointed receiver for failed banks in Kansas during the Depression. Her paternal grandfather owned a grocery store in Topeka, Kan. Jean had the business background and the ability to create a solid start-up plan — she was a graduate of the Harvard-Radcliffe Program in Business Administration and had worked in San Francisco for Matson Navigation as well as Hansell Associates, a personnel firm.
I was the son and grandson of pioneering pharmacists in Rock Rapids, Iowa. (Population: 2,800. Slogan: “Brugmann’s Drugs. Where drugs and gold are fairly sold. Since l902.”) I had the newspaper background, starting at age l2 writing for my hometown Lyon County Reporter (under the third-generation Paul Smith family); going on to the campus paper (which we called the Rag) and then the Lincoln Star (under liberal city editor “Sterl” Earl Dyer and liberal editor Jimmy Lawrence); getting a master’s degree in journalism at Columbia University in New York City; and then working at Stars and Stripes in Korea (dateline: Yongdongpo), the Milwaukee Journal (where I got splendid professional training at one of the top 10 daily papers in the country), and the Redwood City Tribune (where I plowed into some of the juicy Peninsula scandals of the mid-l960s in bay fill, dirt hauling, and the classic Pacific Gas and Electric Co.–Stanford University Linear Accelerator battle). To those who ask how Jean and I have worked together for 40 years, I just say we have complementary abilities: she handles the bank, and I handle PG&E.
Not only did I find my partner at the University of Nebraska, but I also got the inspiration for the Guardian. In fact, I can remember the precise moment of truth that illuminated for me the value of an alternative paper in a city with a monopoly daily press (then, in Lincoln, a JOA between the afternoon Lincoln Journal and the morning Lincoln Star) that was tied into the local power structure, then known as the O Street gang (the local business owners along the downtown thoroughfare O Street). The O Street gang was so quietly powerful that it once decided to fire the Nebraska football coach before anyone bothered to notify the chancellor.
As a liberal Rag editor in the spring of 1955, I had just put out an important front-page story on how one of the most controversial professors on campus, C. Clyde Mitchell, who had been under fire for years from the conservative Farm Bureau and others because of his liberal views on farm policy, was being quietly axed as chair of the agricultural economics department.
We had gotten the tip from one of Mitchell’s students and had confirmed it by talking to professors in his department who had attended the meeting where the quiet firing was announced by Mitchell’s dean. Our lead story was headlined “Ag Ex Chairman Mitchell said relieved of post, outside pressures termed cause.” And I wrote a “demand all the facts” editorial arguing in high tones that “any attempt to make professors fair game for irresponsible charges, any attempt by pressure groups unduly to influence the academic position of university personnel … is an abridgment of the spirit of academic freedom and those principles of free communication protected by the Constitution and the Bill of Rights.” It was a bombshell.
The Lincoln Journal fired back immediately with a classic daily front-page story seeking to “scotch” the nasty rumors started by that pesky Rag on the campus. The story had all the usual recognizable elements: it did not independently investigate, did not quote our story properly, did not call us for comment, took the handout denial from the university public relations office, and put it out without blushing. Bang, that was to be the end of it, on to the next press release from the university.
It made me mad. I knew our story was right, the daily story was wrong, and the story was important and needed to be pursued. And so I stoked up a campaign for the rest of the semester that ultimately emboldened Mitchell to make formal charges that the university had violated his academic freedom. He gave us the scoop for two rousing final editions of the Rag. The proper academic committee investigated and upheld Mitchell but dragged the case out and waited until I graduated to release the report.
Against the power structure and against all odds, Mitchell, the Rag, and I had won the day and an important victory on behalf of academic freedom in a conservative university in a conservative state during the McCarthy era. During this battle I learned how the power structure fights back against aggressive editors. At the height of my campaign defending Mitchell, I was kept out of the Innocents Society, the senior men’s honorary society, although my four subeditors and managers all made it in. The blackball, the campus rumor went, came directly from the regents president, J. Leroy Welch, then president of the Omaha Grain Exchange (known to our readers as the “Old Grain Head”), via the chancellor via the dean of men.
I am forever indebted to them. They taught me at an impressionable age about the power of the alternative press and why it is best exercised by an independent paper on major power structure issues. They also taught me a lot about press freedom, which they were trying to grab from the Rag and me, and how we had to fight back publicly and with gusto.
When Jean and I founded the Guardian, we did so in the spirit of my old Rag campaigns. In fact, we borrowed the line from the old Chicago Times and put it on our masthead: “It is a newspaper’s duty to print the news and raise hell.” We wanted a paper that would be willing and able to do serious watchdog reporting and take on and pursue the big stories and issues that the monopoly dailies ignored — and then were ignored by the radio, television, and mainstream media that take their news and policy cues from the Ex and Chron. In JOA San Francisco that was a lot of stories, from the PG&E Raker Act scandal to the Manhattanization of the city to the theft of the Presidio to the steady conservative downtown drumbeat on such key issues as taxes, social justice, the homeless, privatization, war and peace, and endorsements.
Significantly, because of our independent position and credibility, we were able to lead tough campaigns on public power, kicking PG&E out of a corrupted City Hall and putting a blast of sunlight on local government with the nation’s first and best Sunshine Ordinance and Sunshine Task Force.
Our first big target in our prototype issue was the Ex-Chron JOA agreement, which we portrayed in an editorial cartoon as two gigantic ostrich heads coming out of a single ostrich body, marked in the belly with a huge dollar sign. Our editorial laid out the argument that we have used ever since in covering the local monopoly and in positioning the Guardian as the independent alternative. “What the public now has in San Francisco, as it does in all 55 or so of 1,461 cities with dailies, is a privately owned utility that is constitutionally exempt from public regulation, which would violate freedom of the press. This is bad for the newspaper business and bad for San Francisco.”
The Guardian prospectus, used to raise money for the paper, bravely put forth our position: “A good metropolitan weekly, starting small but speaking with integrity, can soon have influence in inverse proportion to its size. There is nothing stronger in journalism than the force of a good example.”
It concluded, “The Guardian can succeed, despite the galloping contraction of the press in San Francisco, because there are many of us who feel that the newspaper business is a trade worth fighting for. That is what this newspaper is all about.” And we quoted the famous phrase used by Ralph Ingersoll in the prospectus for his famous PM newspaper in New York: “We are against people who push other people around.”
Our journalistic points were embarrassingly timely. A year before the Guardian was launched, Hearst and the Chronicle had formed the JOA with the Examiner and killed daily newspaper competition in San Francisco. The two papers combined all their business operations — one sales force sold ads for both, one print crew handled both editions, one distribution crew handled subscriptions and got both papers out on the streets. The newsrooms were supposedly separate — but as we pointed out over and over at the time and ever after, the papers lacked any economic incentive to compete.
The San Francisco JOA became the largest and most powerful agreement of its kind in the country, and San Francisco was the only top-10 market in the country without daily competition.
This was all grist for the Guardian editorial mills because the JOAs, most notably the recent SF JOA, were in serious legal trouble. The US attorney general was successfully prosecuting a JOA in Tucson, Ariz., claiming the arrangement was a violation of antitrust laws. Naturally, the local papers were blacking out the story. But if the Tucson deal was found to be illegal, the Chron and Ex merger would be illegal too — and the hundreds of millions of dollars the papers were making off the arrangement would be gone.
The JOA publishers, led by Hearst and the Chronicle, quietly started a major lobbying campaign in Washington for emergency passage of a federal law that would retroactively legalize their illegal JOAs. They called it the Newspaper Preservation Act. Meanwhile, the late Al Kihn, a former camera operator for KRON-TV (which was at the time owned by the Chronicle), had prompted the Federal Communications Commission to hold hearings on whether the station’s license should be renewed. His complaint: his former employer was slanting the news on behalf of its corporate interests. We pounced on these stories with relish.
For example, in our May 22, 1969, story “The Dicks from Superchron,” we disclosed how private detectives under hire by the Chronicle were probing Kihn’s private life and seeking to gather adverse information about him to discredit his complaint and to “harass and intimidate him,” as we put it. Later, I found that the Chronicle-KRON had also hired private detectives to get adverse information on me.
I was a suspicious character, I guess, because I had gone to the KRON building to check the station’s public FCC file on the Kihn complaints, the first journalist ever to do so. The way the story came out at a later hearing was that the station’s deputy director left the room as I was going through the records and called Cooper White and Cooper, then the Chronicle’s law firm. An attorney called their investigators, and four cars of detectives were pulled off other jobs and ordered to circle the building until I came out and then follow me when I left the station to return to my South of Market office. They also surveilled me for several months and even sent a detective into the office posing as a freelance writer. (The head of the detective agency and I later became friends, and he volunteered that I was “clean.” He gave me a pillow with a large eye on it that said “You are being watched.” I displayed it proudly in my office.)
Kihn and I were asked to testify before a Senate committee about the Chronicle-KRON’s use of private detectives at hearings on the Newspaper Preservation Act in Washington in June 1969. I took the occasion to call the legislation “the bill for millionaire crybaby publishers.”
I detailed the subsidies in their special interest legislation: “amnesty, immunity from prosecution, monopoly in perpetuity, the legal right to gun down what few competitors remain, and as the maraschino cherry atop this double-decker sundae, anointment as the preservers and saviors of the newspaper business.” And I summed up, “If you plant a flower on University of California property or loose an expletive on Vietnam, the cops are out of the chutes like broncos. But if you are a big publisher and you violate antitrust laws for years and you emasculate your competition with predatory practices and you drive hundreds of newspapers out of business, then you are treated as one of nature’s noble men. And senators will rise like doves on the floor of the US Senate to proffer billion-dollar subsidies.”
After I finished, Sen. Everett Dirksen (R-Illinois) rose as the first dove and characterized my testimony as “quite a dramatic recital” but said that I had not provided a “workable, feasible solution.” Sen. Philip Hart (D-Michigan) recommended that the publishers ought to “read their own editorials and relate them to their business practices.” Morton Mintz, who covered the hearing for the Washington Post, came up and congratulated me. His story, with my picture and much of my testimony, was on the front page of the Post the next day.
Back in San Francisco the Chronicle published a misleading short story in which publisher Charles de Young Thieriot avoided admitting or denying the detective charge and added he had no further comment. Less than a week later, Thieriot wrote the Senate subcommittee and admitted to the charge, saying the use of the detectives was “entirely reasonable and proper.” This statement, which contradicted his statement in his own paper, was not reported in the Chronicle. The “competing” Examiner also reported nothing — neither the original private detective story nor the Washington testimony nor the Thieriot admission.
Nor did either paper report anything about the intensive JOA lobbying campaign headed by Hearst president Richard Berlin, who twice wrote letters to President Richard Nixon threatening the withdrawal of JOA endorsements in the l972 presidential election if he refused to sign the final bill. This episode illustrated in 96-point Tempo Bold the pattern of Ex and Chron suppression and obfuscation they used to advance their corporate agenda at the expense of the public interest and good journalism, all through the years and up to Hearst’s current monopoly maneuvers with Dean Singleton and the Clint Reilly antitrust suit to stop them.
Perhaps the most telling incident came when Nicholas von Hoffman, in his Washington Post column that was regularly run in the Chronicle, called the publishers “as scurvy as the special interests they love to denounce.” He singled out the Examiner and Chronicle publishers, writing that they were “so bad that the best and most reliable periodical in the city is the Bay Guardian, a monthly put out by one man and a bunch of volunteer helpers.” Neither paper would run the column, and neither paper would publish it as an ad, even when we offered cash up front. “The publisher has the right to refuse to run anything he wants, and he doesn’t have to give a reason,” the JOA ad rep told us. The Guardian of course gleefully ran the censored column and the censored ad in our own full-page ad.
On July 25, l970, the day after Nixon signed the Newspaper Preservation Act, the Guardian filed a major antitrust action in San Francisco attacking the constitutionality of the legislation and charging that the Ex-Chron JOA had taken the lion’s share of local print advertising, leaving only crumbs for other print publications in town. We battled on for five years but finally settled because the suit became too expensive. The Examiner and Chronicle continued to black out or marginalize the story, but they and the other JOA papers gave Nixon resounding endorsements in the l972 election even though he was heading toward Watergate and unprecedented disgrace.
Well, in October 2006 the mainstream press is a different creature. Hearst and publisher Dean Singleton are working to destroy daily competition and impose a regional monopoly. The Knight-Ridder chain is no more, and the McClatchy chain has turned the KR remains into what I call Galloping Conglomerati. Even some alternatives, alas, are now getting chained. Craigslist has become a toxic chain. Google, Yahoo!, and Microsoft (known as GYM in the online world) are poised to swoop in on San Francisco and other cities throughout the land to scoop up the local advertising dollars and ship them as fast as possible back to corporate headquarters on a conveyor belt.
I am happy to report on our 40th anniversary that the Guardian is aware of the challenge and is gearing up in the paper and online to compete and endure till the end of time, printing the news and raising hell and forcing the daily papers to scotch the rumors coming from our power structure exposés and our watchdog reporting. The future is still with us and with our special community and critical mission, in print and online. See you next year and for 40 more. SFBG
STOP THE PRESSES: As G.W. Schulz discloses in “A Tough Pill to Swallow,” (a) Hearst Corp. was fined $4 million in 200l by the Justice Department for failing to turn over key documents during its monopoly move to purchase a medical publishing subsidiary, the highest premerger antitrust fine in US history, according to a Justice Department press release; (b) Hearst was also forced by the the Federal Trade Commission to unload the subsidiary to break up its monopoly and disgorge $l9 million in profits generated during its ownership; (c) Hearst-owned First DataBank in San Bruno was alleged in the summer of 2005 to have inflated drug costs by upward of $7 billion by wrongly presenting drug prices, according to a lawsuit reported in a damning lead story in the Oct. 6 Wall Street Journal. Hearst blacked out the stories. And the Dean Singleton chain circling the Bay Area hasn’t pounced on the stories as real daily competitors used to do with fervor.
STOP THE PRESSES 2: SOS alert to the city and business desks of the “competing” Hearst and Singleton papers: here are the links to the key documents cited in our stories, including federal court records of the Oct. 6 Boston settlement with the Hearst-owned First DataBank (www.hagens-berman.com/first_data_bank_settlement.htm), the Justice Department’s antitrust fine of Hearst in 200l (www.usdoj.gov/atr/cases/indx330.htm), and the Federal Trade Commission decision requiring Hearst to give up its monopolistic subsidiary, Medi-Span (www.ftc.gov/bc/healthcare/antitrust/commissionactions.htm).

Or you can read the Guardian each week in print or online.

Politics, beauty, and hope in the Guardian’s arts pages


Forty years of fighting urbicide — and promoting a very different vision of a city

Healthy Compromises

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Sup. Tom Ammiano and Mayor Gavin Newsom took another step today towards making health care accessible to all uninsured San Franciscans.
The San Francisco Health Care Security Ordinance, which Ammiano and Newsom announced their joint support for July 11, offers access to comprehensive medical services, while requiring that medium and large business meet minimum spending requirement on employees’ health care.
While the agreement is optimsitic, it wasn’t reached without compromise on the employer spending mandate.
From July ’07, when the ordinance would become law, until Jan. 2008, employers will have to provide healthcare for employees who work 12 hours or more. That requirement tightens to 10 and then 8 hours, in Jan. ’08 and Jan.’09, respectively.
Meanwhile, medium sized businesses, (20-50 employees) have until March 31 2007, to start making mandatory payments, (which amounts to about a $1 an hour per worker.
Other tweaks: employers won’t have to make health insurance payments, if their employee has coverage elsewhere (through a parent, a spouse, or presumably another job), but the employee decides who pays.
Of all three compromises, the 12-10-8 compromise spells the greatest danger for the local labor pol (what if stores cut workers’ hours to 11 each per week?)
A special Budget and Finance Committee meeting is set for Monday July 17 at 1pm, and the full Board will discuss it July 18, with a final vote expected on July 25.
With Sups. Sean Elsbernd and Michela Alioto-Pier continue to stand on the sidelines? Will Mayor Gavin Newson step inside the county supes’ chambersn? and How many signatures does the business community need to get a referendum on this matter launched by August 9? Stay tuned.

Amalgamated health care

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› sarah@sfbg.com
Mayor Gavin Newsom has taken credit and sought the national spotlight for a plan he touts as an innovative way to deliver universal health care access to the city’s uninsured. Yet Newsom has consistently ducked the vitriolic public debate over how to the pay for the plan, which a companion measure by Sup. Tom Ammiano would cover with a controversial employer mandate.
But as the measures were headed for the first of at least two hearings before the Board of Supervisors (on July 11 after Guardian press time), a board committee and Newsom’s public health director, Dr. Mitch Katz, finally made it clear that Newsom’s plan can’t stand alone, as much as the business community would like it to.
“The two pieces of legislation were created to and do fit together,” Katz said at a July 5 Board of Supervisors’ Budget and Finance Committee hearing. “One can’t successfully move forward without the other.”
Katz made the comments after budget analyst Harvey Rose said the mayor’s plan doesn’t contain a specific funding mechanism. Rose’s admission prompted Sup. Ross Mirkarimi to characterize the mayor’s proposal as “a one-winged aircraft that doesn’t fly.” Sup. Chris Daly added that “It’s time to be up front that [the San Francisco Health Access Plan] only works if it has significant contributions from outside sources, including Ammiano’s plan.”
Neither Newsom nor his spokesman Peter Ragone returned repeated calls for comment on the issue. The Mayor’s Office also has not fulfilled a June 22 request by the Guardian for public records associated with the plan in violation of deadlines set by the city’s Sunshine Ordinance.
“Celebrating one resolution while pooh-poohing the other is disingenuous, because if they don’t work together, nothing works,” Mirkarimi added at the hearing, shortly before he, Daly, and a mostly mute Sup. Bevan Dufty voted to combine both proposals into one health care plan: the San Francisco Health Care Security Ordinance.
“After today’s meeting,” Ammiano wrote in a follow-up press release, “I’m confident that the citizens of San Francisco and the media will understand that the Worker Health Care Security Ordinance and the Health Access Program are one comprehensive health care plan, and are now codified as such in a single bill.”
The decision to amalgamate left small business owners voicing fears over the economic impact of the employer spending mandate, which would raise an estimated $30 million to $49 million of the $200 million cost of providing health care access for San Francisco’s uninsured.
As the controller’s Office of Economic Analysis points out, most of the financial burden of the employer mandate “falls on businesses with 20 to 49 employees, since these firms currently are less likely to offer health care benefits to their workers.”
With the cost of covering 20 full-time employees’ health care estimated at $43,000 to $65,000, many business owners fear the mandate will result in layoffs, economic downturns, and the erosion of their already marginal profits.
Although the controller predicts a “nearly neutral impact” on the city’s economic picture — a loss of 60 to 590 jobs from staff cuts or business closures mitigated by 140 to 250 new health care–related positions — small businesses worry about the controller’s “moderately adverse impact” prediction for employers who currently aren’t offering health care benefits at mandated levels.
“It’s going to add another $50,000 to my already high health care costs,” John Low, who runs a small company in the Tenderloin, said at the hearing. San Francisco Soup Company owner Steve Sarver claimed the mandate could force him to abandon expansion and hiring plans: “Projects that I was borderline on, I’m now going to go toward eliminating those jobs.”
As written before the July 11 hearings, the mandate would kick in January 2007 for large businesses and the following January for small businesses. Mirkarimi says the board should be “extremely sensitive” to the small business community’s concerns.
“The business community knows best how to speak about profit margins. Right now, an employer spending mandate is the only option in orbit. If there are other options, great, but so far all we’re hearing is nothing but distortion,” Mirkarimi told the Guardian. He said the proposal by some downtown leaders to increase the sales tax by a half cent — an alternative to Ammiano’s mandate — comes from “the same community who would sabotage any attempt to enact a tax-based funding mechanism.”
Mirkarimi told us the mayor’s plan was “prematurely pitched through the media on a national stage,” while Ammiano’s legislation, “which is really the heart and soul of the plan, has struggled to get any notoriety locally.” Mirkarimi told us he hopes Newsom will directly address small business concerns — including the reality that his health access plan can’t work without Ammiano’s mandate.
“The mayor needs to make an effort to show small business that he intends to mitigate the negative financial side effects of his plan. But what is the mayor’s communication? And why is he relying on the Board of Supes to fill in the blanks? The mayor needs to exercise leadership, to admit that for his plan to work somebody has to pay, and decide who that somebody is going to be, then build confidence that he has adequate answers. But right now, he’s deflecting that responsibility onto the board.”
Dr. Katz, who was a member of the Universal Healthcare Council that created the plan to offer health access to all the city’s uninsured residents, said he neither hopes nor believes that all 82,000 of the city’s uninsured will enroll.
“We hope that large employers continue to chose commercial health insurance,” Katz said at the meeting, noting that 95 percent of businesses with more than 100 employees already have commercial health insurance.
“If people enroll in a commercial health insurance plan, the city doesn’t get the revenue, but we also don’t get costs,” said Katz, who believes the city can offer health access to all uninsured residents without building additional health centers.
“All existing clinics and facilities have shown a desire to join the program and accept people,” Katz said, noting that the $104 million the city already spends on San Francisco’s uninsured is on the lowest-income individuals, plus a minute subsidy to small- and medium-size business but no subsidy for large businesses.
“Most of SF’s 82,000 uninsured residents are getting care right now, but not in a rational way,” Katz explained. “I look at how much capacity could we add to health centers by only paying for additional providers, like nurses, doctors. And the answer is a lot. We’re not doing evenings or Saturdays, so we just need to open for more hours and hire more doctors, nurses.”
Acknowledging that the Department of Public Health already saw 49,000 uninsured residents last year, Katz said that doesn’t mean that people are getting what he calls “rational care.”
“So when we create a system, we’ll create a demand,” he said. “It’s not just the woman with a bad cough who comes in, but now she’ll also get a pap smear.” SFBG
For coverage of the July 11 hearing and other updates on the health plan, visit www.sfbg.com.

Shotgun marriage

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› sarah@sfbg.com
Mayor Gavin Newsom has garnered media accolades for his San Francisco Health Access Plan, which would provide the city’s 82,000 uninsured residents a package of health care services, including preventative, primary, specialty, and emergency care, lab work, X-rays, pharmaceuticals, and inpatient hospitalization.
All of this sounds good until you consider how the press has glossed over serious flaws in Newsom’s plan, which was coauthored by Sup. Tom Ammiano. And SFHAP could be doomed to fail unless coupled with the more controversial Ammiano-authored health care legislation: the Worker Health Care Security Ordinance (WHSCO).
Ammiano’s ordinance would require employers operating within the city that have at least 20 employees (or 50 employees for nonprofits) to provide health care coverage for their workers. Predictably these mandatory spending requirements have the business community screaming its opposition — and Newsom, who is up for reelection next year, pussyfooting around the issue.
But the truth is that Newsom hasn’t detailed how to fully pay for his plan or avoid its policy pitfalls without the financial and structural boost that WHSCO’s mandates provide.
“There is no separation between the two pieces of legislation except in the way they’ve been presented. They’re joined at the hip, and there will be no funding gap with both pieces of legislation working together,” Ammiano told the Guardian.
Here’s how the plans work: To cover the estimated $200 million cost of Newsom’s sliding scale SFHAP, the city would contribute the $104 million it currently spends on the uninsured, hoping that more preventive care would efficiently translate into lower emergency room costs.
Add that to an estimated $60 million that the city thinks higher income enrollees will pay, plus an additional $10 million in estimated savings from increased federal cost-sharing. But even if all that works out, there’s a $30 million shortfall.
Enter Ammiano’s plan, which would generate an estimated $30 million to $40 million in employer contributions. There’s also another key piece of Ammiano’s plan that saves the one Newsom is touting: Unless Ammiano’s plan becomes law, there’s nothing to stop employers who already offer health insurance from saving money by dumping their workers into Newsom’s newly minted program, thus expanding the number of uninsured and potentially overwhelming the city’s clinics.
While Ammiano’s plan requires businesses with more than 20 employees to cover 50 percent of workers’ health care costs ($1.06 an hour), and those with more than 100 employees to cover 75 percent of those costs ($1.60 an hour), it also offers employers a wide array of health care expenditure options, including providing insurance, creating health savings accounts, or paying into the Health Access Plan.
There’s a reason for these options: the federal Employee Retirement Income Security Act. The act prevents cities and states from specifying which health care plan employers must provide. But as Ammiano discovered, municipalities can stipulate how much employers must spend on health care.
Asked why he thinks Newsom isn’t giving Ammiano’s mandatory plan his public blessing, Ammiano waxes diplomatic.
“I asked the mayor, ‘So, what could you live with?’ and the answer was the Health Access Plan, in which everyone is covered, and there are no preexisting conditions,” Ammiano told us.
But the business community latched onto the idea as if it existed in a vacuum. Nathan Nayman of Committee on Jobs helped develop the Newsom plan but continues to slam Ammiano’s ordinance. At a Budget and Finance Committee hearing on June 26, Nayman called Ammiano’s ordinance “a full frontal assault on small and medium businesses.” But when challenged by Sup. Ross Mirkarimi over how killing the ordinance would incapacitate Newsom’s plan, Nayman suggested “putting both plans on hiatus.”
Ammiano said he’s running out of patience with Nayman and his downtown allies.
“They didn’t lift a finger except to come in at the last minute with a proposal that was neither progressive nor legally viable,” he complained, referring to an 11th-hour suggestion that businesses be charged a license fee. The fee would have fallen heavily on businesses with less than 20 employees — which don’t have to provide health insurance — and likely would have been challenged as a tax in disguise, thereby triggering a ballot.
Not that the Ammiano camp is afraid of voters. In 2004, 69 percent of San Francisco voted for Proposition 72, which would have provided employer mandated health care had it not narrowly failed statewide. So while Ammiano anticipates resistance from the business community, he isn’t expecting a “monolithic rebellion.”
“They’ve been doing their own polling, so they know if [mandatory health care spending] goes to ballot, it’ll pass, and they’ll only get much more rigid legislation,” Ammiano told us.
Ken Jacobs, who Ammiano describes as the brains behind WHSCO and who was also part of the mayor’s 37-member Universal Healthcare Council that developed SFHAP, told us WHSCO not only helps workers who don’t have health care access but also serves to stop the erosion of employer-sponsored coverage.
Jacobs — who is deputy chair of UC Berkeley’s Labor Center — said it’s important not to erode the 85 percent of SF-based businesses already providing employee health care benefits. Even Newsom’s health director, Mitch Katz, has publicly said that good health insurance is better than the access plan Newsom is touting.
Crediting San Francisco’s existing clinic system for making SFHAP conceptually possible, Jacobs noted that its estimated $200 million annual cost is based on “a fully ramped-up program in which every uninsured resident is enrolled” — something he believes won’t happen immediately.
Jacobs also points out that if employers who currently don’t offer medical benefits sign up for private insurance because of WHSCO’s mandate, their employees will no longer be uninsured, thus reducing the public system costs. He also believes that because WHSCO makes large employers spend $274 a month, it’s unlikely they’d opt for SFHAP because that plan is limited to care in San Francisco.
Conversely, SFHAP requires participants to be willing to apply for state and federal benefits. They also must pay monthly fees ranging from a nominal $3 for those earning below $19,600 to $35 for those earning between $19,600 and $40,000 to $201 a month for those earning over $50,000.
There’s also one more reason why Newsom will likely to be forced to accept the marriage with Ammiano’s plan, despite the grumbling from his business community supporters: Eight supervisors have now signed on as WHSCO cosponsors, giving it a veto-proof majority.
Newsom’s spokespeople did not return our repeated calls for comment, but Eileen Shields of the Department of Health confirmed that “Ammiano’s legislation supports making the SFHAP a reality financially.” SFBG