>> bid could be something that could be explored. supervisor avalos: can we explore that? >> we could. supervisor avalos: you mentioned project labor agreement, can that be made public? >> the project labor agreement is not between the city. and that gen -- i imagine cpmc and the unions could make that public. it was not negotiated with the city, per se. it was their agreement. supervisor avalos: lastly, we mentioned looking at the work force by trade and we expected to have on the project -- >> the numbers by trade? i can give you that.

>> passed a follow-up question? -- may i ask a follow-up question? president chiu: yes. >> why did you choose a number as opposed to a proportion? it seems like a tough number because we are calculating or forecasting. >> in doing this a lot, it could go either way. you could have done 40 or a percentage and came out a little less. we just looked at the numbers and it seemed like doing for the end of being able to roll it over was the better way to go. you could've put a percentage and, i don't know, came out with the data differently. we feel a lot with percentages, sometimes it doesn't give you a bigger number.

it just kind of depends. for the purposes of how we got here, looking at the past, the 40 seemed to get us further by the definition that we were using. >> you may have mentioned this, why five years? why just five years? how was that calculated? >> i think we were looking at the end of the -- i am forgetting. >> i think you're referring to the fact that the construction time for the hospital was five years from start to finish. >> we just looked at the life of the construction, and not the ongoing operations side. most of the agreements that we negotiate are built around the life of the construction, so that was pretty much of the way that we used -- and the way that we looked at this one as well.

supervisor avalos: that seems different from what i thought. >> of the 40 is the end-use. it was calculated over the period of time of the project. the buildout of the project. supervisor avalos: you said the 40 was part of construction jobs. >> the 40 jobs were over five years -- we negotiated the where there were 40 in-use of jobs over a five-year period. that a separate anything to do with construction. that is all based on the 30% -- it is too different deals, two different ways we negotiated.

does that make sense? i am not sure if that answers your question, supervisor kim. that is pretty much of the standard way we have done it. we have done the another example, you know, probably one of the other projects that has been similar arrau this is the bloomingdale's project that was negotiated at a very similar way. it went through the life of the project. the lowes agreement that we had was for the life of the project. what happens, even though it is negotiated that way, once you get in there with the employer, they call us back for reemployment as the jobs turnover. once you have kind of gotten that relationship, in my tenure, i have not had any problem with

those employers coming back to us when the positions turnover. now we have a system that is pretty much automatic. that is true with the lowe's project, the bloomingdale's site. it comes out that way anyway that they call us back for reemployment services. we have a reputation in a system, and they use it. president chiu: supervisor campos. supervisor campos: thank you, mr. president. i want to thank the staff members for their presentation and i wanted to ask a few questions on the issue of health care. and if i could, through the chair, if i could address my questions to the director of the public health. i would like to begin by thanking barbara garcia and her

staff that have been working for quite some time on this matter, and i appreciate the willingness to keep us informed of their progress had to make sure that our concerns are taken into account. i want to again, thank you for that and think the staff for all the work that has got into this. we passed the health care services master plan legislation that, for the first time, requires that we as a city and county think strategically about the short-term and long- term health needs, not only of the city as a whole, but of individual neighborhoods and district. it is with that mind set that i would like to ask you a few questions about how you approach the development agreement and the negotiations. just a general question about the extent to which the health care needs of the city and the

differing neighborhoods have been taken into account, the health care services master plan does not expressly apply to this project. it was already in the pipeline before the legislation was introduced. we expressly did not have applied -- it would not delay this project. i was wondering if you have general comments about where the health care needs of the city of the neighborhoods come into play. >> is really important to understand that when we look at this, we looked at the history of the health commission and how they looked at health care needs. i would start with st. luke's and the importance of st. luke's to the mission and southeast area. and looking at that in terms of having a commitment for a 20-

year commitment. the capital investments they are making, we believe it is a 20- year investment. to that extent, i think st. luke's is really important. the other issue that is really important, we try to construct a new medicare health program, particularly because it is moving to a neighborhood. it took us a lot of conversation to discuss how we would ensure that the st. louis was not the only health care provider in the system. and also incorporated too important community clinics within that period. we also want to have another one

in the tenderloin area. that is a new service, a new way of providing care and they will have benefits. it was a very important constructs that we created to insure that patients would be able to take advantage of the program. the other was the fact that working internally in terms of its discharge, many times the discharges from the hospital's heart difficult and you kind of lose their community connection. it is a warm handoff, and we have asked them to work with community programs to assist them in the patient's navigation program. those are the major three areas, and trying to keep to the charity care physician and

continuing that in the future. supervisor campos: if i may ask you more specifics about that, the issue of charity care is an important issue. i don't know if you are aware of this independent study that just came out -- it just came out at the hastings college of law. quite frankly, it is a very disturbing study in terms of what it points to. it finds thatcpm cpmc is the city's most profitable hospitals. it posted a net income -- that is compared to say to mary's

hospital, and saint francis that lost close to 15 million. when you look to the issue of charity care, according to the study, cpmc is not living up to the same level of charity care than other hospitals are. it is less than half of that of saint francis even though it is more than three times the size of that hospital. the profits of $743 million in saint francis close to $15 million. what do you think of that? what are your plans going forward in terms of addressing that disparity that you had the most profitable hospital that is providing a level of charity

care that is below that of other hospitals. >> of the health commission has had many conversations about this. they worked directly with them for many years. they have the attempts to expand the charity care. in the future, as my deputy talked-about, we will have people who moving from charity care. we addressed some of those issues because of the charity care to focus on the future is missing an important area. many of the individuals today can be seeking charity care, and a few years, they will have a benefit for insurance. we would try to work towards the future of that, for the last

four years the health commission has continued to increase the charity care. to develop a program for the future that will capture the rest of the vulnerable population that now has a benefit. the proposal did not have that when we started that compensation. that is how we are looking at it. it will also be supervised from the health care perspective and we will continue to discuss that issue. in the future, they have some projects that they are looking at to continue to look at charity care and the development partnership. but it is a concern and has been a concern for the health commission for the last four years or five years. to try to approach it from a future direction in terms of the large population that does not have insurance or coverage today will have that. and how you structure a program to ensure that the future of a

vulnerable populations will be covered. we believe the program will address some of your concerns. >> on the issue of charity care, the board of supervisors has taken a position on this, calling upon cpmc to provide more charity care. as i understand, what you are envisioning right now is that you are asking that they provide about $86 million worth of charity care plus inflation. as i understand that figure, that figure basically, if they do that, it would maintain them at the level of historical levels in terms of what they had been doing around charity care. but it doesn't actually increase that level. >> it would be my opinion that in the future, charity care will reduce due to the fact that many

of the individuals will be having coverage. in anticipation of that, we try to develop a program that would address that issue by moving people to a new program with benefits. i understand your concern, and it is an issue of partnership that they continue to provide charity care. supervisor campos: i will get to the issue of medical shortly. if you look at what you're proposing, it is a little over 1/3 of the 3% that the board resolution calls for. if we really are, we want them to address the issue of charity care and do something that is comparable to other hospitals that are a lot less profitable,

why not ask them to provide charity care that is beyond -- >> part of the negotiation is what is the future of health care? i think that in the future of charity care, we will see a drop in all hospitals. we do believe that is starkly -- the commission has worked very hard for the last four years as we have seen a continued increase of charity care. supervisor campos: i know that as a concern for the folks there represented districts like mine

where you have issues that are directly impacting our constituents. i just want to make sure that we are aware that the level of charity care at least that we are talking about is a lot less than what prior boards have indicated in the past. in terms of medical, how did you get to 10,000 by 2015? >> what is that we worked with the northeast medical services, trying to look at the capacity of the clinics in existence that are trying to provide this kind of comprehensive plan that would also not only provide the primary care, but special hospitalizations. with the clinic consortium, we

looked at how quickly can we get the number of lives within the system. we felt that 10,000 or 30,000, 1/3 is unable to be met. one concern was that if we raise that much more, we may not be able to meet that number. not because we don't want to meet those numbers, but because we don't have the infrastructure in the clinic to be able to approach it. from the health department, it is the managed care system. we have the infrastructure and the administrative ability to manage these along with cpmc. it is their ability to serve and the ability for clinics to do that. that is another reason we have asked for a contribution for the

community clinics, to build the infrastructure so that they can have their management services organization and the relationship with the hospital. i don't think we could be doing a good service for any of us. supervisor campos: a final area of inquiry is the issue about st. luke's. i want to thank you and the mayor for the commitment that you have made a route to st. luke's. but one of the things -- one of the things that i am worried about, though, from my understanding and maybe i am mistaken, he approached that you are taking a around the commitment to operate saint luke's for 20 years is that there is an escape clause, if you will, that would be embedded

in the development agreement. i am wondering if you can, or at least there is thought that your thinking about a possible escape? any time that is being talked about, the fear is that the devil was in the details, it opens the door for someone like whoever to really use that clause creatively and find a way to get out of its obligation to build and operate the hospital. >> hotel and rich has been the financially. >> as soon as we first started discussions, immediately saint luke's rose to the top of our discussion and we said that we

need a promise that you can't open your big hospital hot cathedral hill until you open st. luke's. nothing can happen during construction, you have to open st. luke's. secondly, once you open it, you need a running for 20 years. those discussions were difficult to get into, but we made it clear that we really needed these gangs. we can get to the 20-year commitment. you and everyone else wants to have it. if there were a caveat that said that the system, not save lives but the whole system, is going broke, there is a way to consider that. but you have to understand that by going broke, we mean going broke. we meet on the verge of insolvency. the devil is in the details, but we have not arrived at a measure

for that caveat. but i will make it clear that it is something that we have to be very comfortable with. it is incredibly unlikely to happen. before you take action on this project, you will have a chance to look at that number and talk about it. we don't have the number yet, but is the approach we are taking. president chiu: can i ask a question to the city attorney about that? part of the wonders why such a clause will be necessary. legally, there are certain obligations that you have when you enter into a contract. i don't even know why the need for something like that would be, so i am trying to understand how typical this kind of clause is in a development agreement? is this something with any other

project that has come before us for the typical project that we allow for the inclusion of something like this? >> i do not think that a clause like this is legally necessary. one of the things, it is a business and the negotiation. i also did not think that having a clause that requires me to maintain an operation for 20 years is normal either. in most of the development of payments, we care about getting in bill. there are no longer any ongoing operations. you have to build its, maintain and operate it. when we do reach agreement on that clause, we approve of what we are doing is reasonable.

without any more specifics, i don't have any more to say about that. >> i think the devil is in the details. i think that the extent of this clause is not legally necessary, i wonder why we will have it in there. the statement that this is so unlikely to happen, kind of don't worry about it. i have seen that movie before. you have corporations, pg&e is the perfect example. they did the reorganize and after filing for bankruptcy, turned around and gave executives millions of dollars. so there have been examples in the corporate world, and i am not saying that it is going to happen here. we don't live in an ideal world.

and so, that is the fear and concern that i have, and again, the devil will be in the details. you will be wise to heed some of the comments. >> if you had to take the most critical sentence, it will define this caveat as carefully as we can losing -- using outside expertise. we're being very deliberate and careful --

supervisor campos: we want to be sure that we are careful about how we approach this. it is something that i asked as the supervisor, and someone who is a consumer in terms of health care and is something that i think all of us have to worry about. it is the rising cost of health care. we had a hearing that the government ought and oversight committee that talked about how expensive health care in san francisco is relative to other parts of the state. one of the concerns that came

out who was the extent to which it seems, at least, they have been able to increase costs and drive some of the costs. so what are we doing to make sure to the extent that we are asking things of them, we are not opening ourselves to a situation where the turnaround and pass those costs onto consumers, whose san franciscans, to the city as a provider. >> our director of our own health services system, she is here. i would like to give her an opportunity to address that. supervisor campos: i know that she cares deeply about these issues and has been doing great work on this. i certainly know how critical is

for her. thank you for being here. >> thank you, supervisors. at the government operations committee, it was established in our testimony that average cost for the health services for hospitals today was about $1,000 more than the average cost of other hospitals. 70% of our blue shield costs are hospital costs. the health service board is entertaining right now passing substantial amounts of the premium costs on to employees in the form of co pays and deductibles just to keep lucio competitive. the increasing cost of hospital care is what is driving the health premium cost of. having that is why we are looking at the office of

economic development who work with cpmc to make sure the costs of the development agreement are not passed on. sutter did step up and agreed to allow us to have our consultant who worked into the cost data. that agreement was come to relatively early on and lucio was pleased for that as well. the cost per day in hospitals is significantly higher than the facilities in center and it is driving the health costs of. supervisor campos: i have to say that what makes me nervous is that we see there are some that things that havepe