acute intervention and stabilization for mental health patients. going forward, we're going to focus on strengthening the connection between acute interest in and community-based recovery programs. we will partner with dph and the progress foundation to move patients from the hospital setting to recover in the community where it is most effective clinically and cost effectively. we have facilities at the california, st. luke's, and davies campuses. we will be decommissioned in our beds at the california and st. luke's campuses. after an extensive dialogue with the help commission and the committee, we have made a commitment to keep 100 beds in san francisco so that 80 or so, the patients coming out of our hospitals will have automatic

placement. we also offer long-term care services to our patience today. we have a program at st. luke's. sub-acute patients are long-term care patients. they are usually with us for two or three years. many of them are in a persistent vegetative state. the blue ribbon panel recommendation is to transfer those patients to community based settings because these patients do not need to be in an acute care hospital. these are long-term care patients better served in the committee. now i will focus on the hospital services. today we serve about 1/3 of san francisco's health care needs in the hospital and emergency rooms. going forward after the rebuild, we will remain and maintain a proportion of services in san francisco. this is not a program to

dominate health care in san francisco. we will retain our portion of health care, about 1/3. we're proud to the liver one out of two babies in san francisco. we also provide services to support other hospitals. for example, we deliver all the babies at chinese hospital. we do this high-quality outstanding care. we are nationally recognized for quality and safety. we do this in outdated buildings. they are challenging to operate. to give you an example, at the emergency room at st. luke's, the pedestrian corridor cuts through the heart of the emergency room. every single day, hundreds of staff, physicians, and patients walk right through the heart of the emergency room creating degree and noise. this is only one of the few important reasons to rebuild the

health care delivery system. many others have alluded to the need for seismic safety. now i would like to share with you how we will -- how this will work. we're looking to rebuild our system, not as stand-alone systems as they were designed, but as a modern health care delivery system. what we're looking to rebuild is a system where community hospitals are connected and supported by specialty care hospital. the spoke hospitals are st. luke's and davies. both will be full-service hospitals, but with their own programmatic focus. they will be similarly sized from inpatient perspective. but st. luke's will have an award winning labor and a liver program -- delivery program. we will have an increased

emergency room capacity by about 50%. at davies, we will not have a labor and delivery program, but we will continue our strong and proud tradition of serving hiv/aids patients and neuroscience patients. the pacific campus will maintain the psychiatric program. it does not need to be in a hospital setting. we will keep it. it is. the campus eventually will transform to an outpatient medical center. our sickest patients from each of these facilities will be transferred to the cathedral hill hospital where we will have programs like organ transplantation and a neonatal intensive care unit. it is also important to point out cathedral hill will also provide general acute-care and emergency services to the surrounding neighborhoods. we are doing this because there is a strong consensus of

hospital planners and health care experts across the nation and across the world that is not feasible to duplicate specialty care of every community hospital. that is for two major reasons -- volume and physicians. with programs like organ transplant, we need to do hundreds of them to maintain quality and certification. the physicians who are highly trained to do that work, there is an acute shortage of them in the united states. to have them at one place and centralizing care for the sickest patients produces better outcomes for those patients. how will this work? i would like to give example. grandma lives in a district. she gets primary care from our st. luke's health care center, one of the dots on the bottom.

she also has a heart condition. she is comanaged a cardiologist at st. luke's. she can get all of her diagnostics done at the st. luke's campus. if she has a problem at night, she can come to our emergency room. if she needs a knee replacement, she can get that at st. luke's. she did even access help coaching to improve her diet and increase exercise. if she needs a heart transplant, she will be transported 3 miles to the cathedral hill campus where the heart transplant program is. organ transplant programs are very complex. we need to the several hundreds of them to maintain certification and keep up the skills of our staff and positions. in the case of heart transplants coming out of the st. luke's service area, there's probably not more than five of them in any given year. gramm of will be able to get

this at the cathedral hill campus. at the same time, she will be able to get the care she needs every day at the st. luke's campus. i think gramm, is pretty lucky to be able to get a heart transplant 3 miles away. there are a lot of folks from surrounding communities throughout california travel hundreds of miles to see physicians at cpmc to get the same kind of care that ground, -- grandma gets. our patient base is 70% san franciscans. 30% are from surrounding trees. san francisco is a medical destination. we have world-class care here because we have world-class hospitals. we also do a great help and biomedical research region but also great help and biomedical

research. health care is our number one industry in the city. we generate about 100,000 jobs as an industry. 18% of the city work force. these jobs pay better, about 22% more on average. many of the health professionals are women. cpmc is an integral part of this important industry. this is a quick overview of our plan to modernize our health care system. we're very excited to embark on this conversation with you. i wanted to leave by highlighting some of the benefits of the building. we will build and double the number of earthquakes eight beds in san francisco. that means we will be here and operational after a major earthquake. we will improve health care without disrupting care for 1/3 of san franciscans on any of the campuses today. we will maintain the regional

center of excellence programs in san francisco. we will control rising health care costs by as much as possible and eliminating redundancies. we will commit and simultaneously construct st. luke's hospital and cathedral hill hospital at the same time. st. luke's hospital is planned to be brought up first. we will protect and expand health services for the poor and underserved. thank you for the opportunity to talk with you. now with like to introduce david came to talk about the program from the facilities standpoint. >> could we have the screen again? cpmc's plant in visions five new buildings. each one is sophisticated designed to support a specific program. they will complement the character of existing neighborhoods. the neurosciences institute

davies campus will improve public access to the campus through a new accessible concourse. the lower podium height establishes an appropriate street skill. the upper level of the building is set back and turned 90 degrees and provides pedestrian linkages to the existing facility. looking south, a small corner garden provides access to the lobby congress. the upper setback for is not visible from this vantage point. at van ness and geary, the new building will provide enhanced public realm. the hospital is bounded by street. looking south of the corner of van ness, it rises along the southern edge of the site. the remaining building rises to an average of 80 feet from the street, lower in most cases than

existing buildings on the edges. it has a positive urban design benefit. placing the tower on the southern edge of the site minimizes the shadow and shake falling onto streets. this placement dramatically improves the sidelines for neighboring buildings to the north, east, and west. in this slide, we're looking south on van ness. it will provide new retail frontage to complement additional plantings and seeking provided in the expanded areas formed by renewable -- removal of parking. looking north, we are applying principles outlined in the better streets guidelines. the design creates an appropriate streetscape coordinated with new buildings to support windows on the street and an enhanced and pleasant pedestrian environment.

the main pedestrian door ways to the hospital and medical office building are located near the corners to provide easy access to transcend -- transit and liven the street scape in these locations. looking east on geary is the medical office building. it captures the existing corniced lines. it is simple and consistent with the natural variety and scale seen along the street. this view looking along cedar street, cedar street is completely redesigned to provide a safe pedestrian environment and intra- plaza for the medical office building. -- entry plaza for the medical office building. the new buildings provide a very skyline. they are stepping up the hill. each building is divided into multiple smaller parts to

provide appropriate scale and variety. looking west up cedar street, the buildings are different but compatible and fit into the neighborhood character and urban context. in this view of cesar chavez from valencia, the redevelopment of st. luke's campus is clear and comprises three elements. a new hospital, a new integrated medical office building, and a new plaza on the vacated right of way between the two new structures. as part of the site development, the main staircase to the historic building on valencia will be reopened to use by the public. varied massing and materials tied to the character of the neighborhood. the new hospital steps down dramatically to the west in deference to the scale of adjoining acres. a major new plaza will support a

dramatically improved public realm that integrates the campus with the community. the new plausible provide access to the hospital and medical office building, the fountain, multipurpose room, seating, staircase, and provide wonderful access to the south. the staircase leads to the applause and on 27th street. hospital program lobby and programmer will support the of deposit. we believe the five new buildings will be great additions to the city. they will provide the highest quality new health care. they will complement the neighborhood and will be built to last. thank you. supervisor mar: thank you, mr. king. there is an overflow room in 264. -- 263.

the sheriff's deputies have told us people should move if they do not have a seat in either of these rooms. let me turn it back over to ken rich. >> i will go through the overview quickly. i will rely on members of the committee to slow me down if i go too quickly. can i have the slide again, please? basically we have been clear from the start this project only makes sense for the city becomes a certain commitments from cpmc for a set of public benefits. we will give in to these. broadly they include a commitment to help care for the poor and underserved, a commitment to st. luke's, a commitment to affordable housing, and a commitment to local hiring and workforce development and transit and street improvements. it is a binding legal contract between the city and cpmc.

the purpose is to codify the commitments as well as lay out remedies and damages if either party fails to live up to the commitments. when adopted by the board and signed by the mayor, they can only be modified by future board action. in general, it is effective 30 days after the mayor signs it and has a basic term of 10 years. however, certain obligations survive beyond the 10 years. notably those involving continued operation of st. luke's hospital. as you will see under the development agreement, cpmc may not open the new cathedral hill hospital until it first opens st. luke's hospital. the obligation begins when cpmc begins construction on cathedral hill. some obligations are triggered immediately on the effective date. others are triggered when legal challenges are resolved or when cpmc begins building. vesting of the development rights is a major obligation of

the city to cpmc. approvals for the 5 near term projects are vested by the da as well as the impact fees that are frozen. what we call long-term projects, those identified in the long- range development plan, those do not have approval bested by the da. the city is obligated not to downzone the sites or create new categories new categories of impact fees to apply to those sites. continuing quickly. they contemplate vacation and a portion of san jose avenue between 27th and cesar chavez. this is a portion of the street that has been closed for many years. cpmc will pay appraised market value of about $1 million. in terms of enforcement, there

are a variety of strong enforcement mechanisms. we can talk about those in future hearings. if there's nonperformance of monetary obligations, the city has the right to terminate and sue for damages. the city has negotiated liquidated damages for non- performance of many of the health care related obligations including the obligation to open st. luke's before cathedral hill, operates it looks for 20 years, and other key health care obligations. really quickly, on monitoring, it requires an annual report of compliance on all obligations and requires the director public help in planning certify each year cpmc is in compliance with the requirements. if the the director finds cpmc is out of compliance, they can begin the enforcement process with the city attorney. that is a general overview of the general terms. i will turn it over to barbara

garcia who will go through the health care portions at an overview level. >> good morning. barbara garcia, director of health. i am pleased to be here with my deputy director to provide you with an overview of the health- related provisions in the cpmc development agreement and discuss some of the background that got us to where we are today. as you are aware, this is largely the result of state law that requires, for hospitals to meet seismic safety standards. having seismically safe hospitals that can be ready to care for san franciscans when it they will need it the most common in an earthquake or other disaster, is a critical importance. all hospitals, including our own general hospital, are on their way to meeting stringent seismic safety standards. in addition to meeting our needs for seismic safety, we're also

in the the need for our hospitals to meet the needs of the most vulnerable san franciscans. in advising of the health aspects of the deval agreement, i thought it was important to build upon the significance work already done over the past five years by the health commission and the blue ribbon panel at st. luke's, specifically the recommendations that these bodies highlighted three key priorities. first, ensuring a secure future of st. luke's. st. luke's is a valuable community asset with a long history in san francisco of serving the underserved. san francisco 6 hit -- san franciscans in the mission and beyond rely heavily on st. luke's for hospital and outpatient care. the emergency room helps to meet the emergency medical needs of patients, sharing that responsibility with san francisco general hospital. the second priority was to ensure increased access to cpmc, specifically with the new cathedral hill campus, for charity care and medi-cal

patients. we wanted to ensure that the new cathedral bell campus would be similarly accessible to san francisco most vulnerable population. with the passage of federal health care reform, it was important that these discussions have forward-thinking and are made in the context of this changing help the environment, regardless of the supreme court 's action that will be made on the next few days. last, the desire to focus cpmc's community benefits on the most vulnerable population. we believe nonprofit hospitals have a social obligation to provide a broader benefit to the committees they serve. this has been long mandated by state law. since the passage of health care reform, it is now also federal law. we wanted to ensure that cpmc's community benefits are really focused on a disadvantage san franciscans with limited resources and limited access to health care resources they need. it is with these three key

priorities that we approached discussions in cpmc on the development of this. i believe the provisions you'll hear about today and at your next hearing address these three key priorities. to go further into our health agreement, our deputy will provide an overview. thank you so much. supervisor mar: thank you, ms. garcia. can we get the microphone? >> and also the overhead, please. good morning. today i will provide you with an overview of the health-related provisions of the cpmc developer agreement. i will go through these quickly, because and i more comprehensive review will be provided on june 25. this provides information on the specific provisions that relate to the first priority of ensuring a secure future for st. luke's. first, the proposed da requires

that cpmc construct an open in new seismically safe seat looks hospital. second, the st. luke's hospital operating commitment. under this provision, cpmc would agree to operate st. luke's is a general acute-care hospital with an emergency room for it least 20 years, providing that the cpmc consistently remain financially solvent. the concept is measured by looking at operating margins, the percentages by which total revenues exceed total expenditures. as long as the operating margin for all cpmc's operations in san francisco, not just st. luke's, remains above 1%, c.p. -- cpmc is required to operate st. louis for the full 20 years. st. luke's can only be closed if the operating margins fall below 1% for two consecutive years and after public notice and an extensive meeting process. there, the developer agreement includes several provisions to ensure that st. luke's is meeting the needs of its surrounding community. these provisions build upon the

blue ribbon panel recommendation and require that st. luke's be operated as a full-service, general acute-care hospital with an emergency room which will be 50% bigger than the existing emergency room. it will have centers of excellence in senior and community health. the final provision related to st. luke's relates to the new medical office building. the proposed of all the agreement requires cpmc to a tunnel in new office building as part of this process and would require that the process of constructing the medical office building begin within four years of the opening of st. luke's hospital. it that does not happen, the city does not have the right to lease the property for a nominal amount of work with the developer to build the office building. in addition to providing for a secure future for sale luke's, and in accordance with the second priority, the proposed bill would agreement ensures cpmc access for medi-cal and charity care patients in two ways. first, requiring the

continuation of the baseline level of care for these a vulnerable populations for the next 10 years. cpmc will continue to spend at least $86 million each year on care for vulnerable populations. there are three components that comprise this baseline level of care. the first is charity care, the provision of health care for uninsured people without the expectation of reimbursement. the second is medi-cal shortfall, the u.n. reimbursed costs for caring for medi-cal patients. third, grants that also provide care for these low-income populations. the base line of $86 million was set by averaging cpmc's last three years of expenditures in this area and will adjust each year by medical inflation. the base line commitment will be limited to 40% of cpmc's ebidta. it is a measure of income that was used here because it excludes the effects of capital

projects. using that ensures that the cost of rebuilding these two hospitals cannot, in and of itself, affect cpmc's baseline obligations. finally, cpmc will provide a $20 million back stock fund to supplement the baseline commitment should the cost exceed 40% of ebitda. one less important point, every other provision in the development agreement is over and above this continuing commitment and cannot be counted as part of the $86 million base line. earlier, director garcia told you that we approached the discussions on access to cpmc for medi-cal and charity care patients with an eye toward health reform. under health reform, an estimated 30,000 low-income san franciscans are currently uninsured will become eligible for minikel. the proposed avella agreement would require cpmc to provide care for 10,000 of its 30,000

newly eligible medi-cal beneficiaries. but they would partner with at least two primary care providers, one of mitch must be located in the tenderloin, to provide hospital care to the cathedral hill campus. it accounts for one-third of the anticipated new medi-cal beneficiaries of the same proportion as cpmc's hospital care in san francisco. this provision was crafted specifically in response to the health reform, and the 30,000 individuals being transitioning from uninsured and relied on charity care services to becoming ensured and participating in medi-cal managed care to the cost of caring is seeds the reimbursement by medi-cal, and the development agreement limits cpmc's and reimbursed costs for seven to 10,000 but a fair share is to $9.5 billion per year, adjusted annually for medical

inflation. the city conducted actuarial analysis and predicted rates of service utilization by these new to those of patients and is confident that the $9.5 million of parliament will be sufficient to ensure that all 10,000 beneficiaries can be cared for in this managed care system. i mentioned that this provision was specifically crafted in response to health reform and will move health care into the future. although health reform will reduce the number of uninsured who rely on charity care services, it will not eliminated. the need for charity care and other care for san francisco's low-income populations will remain, which is why the maintenance of the baseline commitment was an important element in the development agreement. as director garcia mentioned, the supreme court is currently reviewing health reform and is expected to render its decision this month. it is unclear how the court will rule. however, even if it is wholly or partially start them, the state

can implement many of the provisions of health reform and have stated its intent to do so. the development agreement does include a provision that requires that the city and cpmc meet and confer a there is a change in the law that renders any portion of the development agreement unachievable. if it comes to that, i suspect we would discuss a range of alternatives depending on how the court rules, but i imagine our discussions that address increasing levels of charity care and other services for low- income san franciscans. in accordance with the third goal the director garcia mentioned, focusing cpmc's community benefits on san francisco's most vulnerable populations, $20 million community care innovation fund will be established under this a deval agreement and will help the san francisco community- based clinics develop the capacity to thrive under reform. this will develop the infrastructure and capacity of the existing primary care provider serving tenderloin residence, to