by Polly Keary, Editor
– Monroe Monitor –
After a year and a half of pursuing collaborations with other hospitals and two collapsed partnership deals, Valley General Hospital announced last week that it is prepared to enter a deal with EvergreenHealth of Kirkland.
The partnership will be an affiliation, a much less far-reaching level of partnership than the previous two proposals had been.
But the CEOs of both organizations last week said they believe it will help Valley General survive without reducing services, and will in fact mean more and better health care options in the valley, including more primary care.
Since Valley General put out a request for partnership proposals in February of 2011, Providence Everett proposed making VGH a Providence hospital before withdrawing from talks in August of that year, and Capella, a for-profit organization based in Tennessee, proposed a 40-year lease of the hospital and an infusion of as much as $30 million before withdrawing from talks in April of this year.
Evergreen is not proposing a lease of the hospital, or a takeover, but rather a modest investment for now that could expand into a more robust partnership in the future.
“The idea is that we remain separate organizations, but we have a strong affiliation with Evergreen, where we get to take advantage of their economies of scale and services and they establish a relationship with us,” said interim Valley General CEO Michael Fraser. “A number of their employees and patients come from this area, and this is an opportunity for greater coordination of care.”
Fraser believes the relationship will shore up the hospital’s finances, which have been in steady decline for years due largely to having the third highest rate of unpaid care among state hospitals, combined with the lowest levy rate in the state, currently at 12 cents per $1,000 of assessed property value. Evergreen’s levy rate, including bonds, is just under 50 cents.
Because Evergreen is a much larger hospital than Valley General, (Evergreen has 275 beds; VGH has 51 in use) it can buy supplies in bulk, and VGH can benefit from the savings. Also, the two hospital CEOs, including Bob Malte of Evergreen, said that they anticipate new efficiencies that will save money, such as streamlining invoicing and eliminating duplication of services.
But Evergreen doesn’t plan to reduce the services VGH offers, said Malte.
“The intention for affiliation is to keep the services in the community in the community, not to take them out of the community,” he said.
Levy part of plan
Part of the plan to stabilize the hospital financially includes a levy, which Fraser said the hospital probably will run next year.
But the deal doesn’t depend on the levy, he said.
“The thing that pleases me with Evergreen, they are willing to work with us through those challenges,” he said.
Evergreen, like Monroe, is a taxpayer-owned hospital, so they can’t use their public funds to subsidize another hospital.
But if a levy doesn’t pass, Evergreen will stay involved, although services at VGH could be modified, said Fraser. They are committed to continuing to offer inpatient care at VGH, they said.
Even if the levy does pass, money from the tax increase won’t be available until late 2013, meaning VGH will have to continue to make deep cost cuts until then, Fraser wrote in a recent message to staff.
New services, doctors
Evergreen does plan to offer new services in Monroe, as well as expanded ease of access to Evergreen’s services, including services offered by Evergreen’s other partners, Seattle Cancer Care Alliance and Virginia Mason.
Monroe is short of primary care physicians, said Malte, and this week Evergreen plans to begin a search for two to practice out of the Sky River Medical Center next to the hospital. It usually takes about six months to find a doctor, so the hospital wanted to get started right away, said Malte.
Before Capella pulled out, The University of Washington considered joining the deal in order to provide Monroe with primary care doctors, as they can help funnel patients to specialists at the larger organization.
Even though Providence Everett recently announced plans to build a $22 million medical facility on North Kelsey, which will include 16 primary care doctors, Malte says there is room for more due to an aging population and the coming health care reforms that will mean many more insured people increasing the demand for doctors.
In fact, Evergreen has a goal of eventually adding four primary care physicians to Sky Valley Medical Center. It’s not a cheap venture; it costs about $50,000 just to recruit one doctor and another $100,000 to set one up to practice.
Evergreen also offers extensive home health care services in King and Snohomish counties, and anticipates expanding them in the Sky Valley through Valley General. Many things traditionally done in hospitals are now provided at home, such as infusions, dressings and some therapies, which is a cost savings, said Malte.
Evergreen has the only 3D digital mobile mammography unit on the West Coast, and it can detect cancerous lesions much sooner than can traditional mammograms, while reducing the number of false positives and call backs.
“I will take a look at that and if we are able to offer that here, it would be a tremendous benefit to residents, as well,” said Malte.
The two CEOs also said that the community needs more psychiatric services and that they would like to begin offering those services at VGH.
One of the main benefits to area residents could be Evergreen’s relationships with other organizations, which include about 900 providers, said Malte.
“We are about to open a new cancer center,” he said. “It’s more than a facility; it is a partnership with the Seattle Cancer Care Alliance that opens in 2012 and gives residents an option for the best cancer care.”
The SCCA is a leading cancer research and treatment facility with about 250 specialists treating about 5,000 patients at any time, offering among their services many research-based treatments and clinical trials.
“We see the potential to tie in through Evergreen and to the Alliance as a real benefit, and access to the research protocols, when dealing with esoteric forms of cancer,” said Malte.
And Evergreen collaborates with Virginia Mason in Seattle on a number of services, as well. Having Monroe doctors well-versed in the offerings of Virginia Mason and the Seattle Cancer Care Alliance, as well as Evergreen, can help new cancer patients and others with complex medical issues understand and navigate their options, said Malte.
Providence’s alternative proposal
Providence was also again exploring a partnership with VGH, even as it prepares to build a large facility in Monroe, but the two options were strikingly different, according to a recent VGH employee newsletter.
“In the proposal from Providence Regional Medical Center Everett, Valley General Hospital would be required to terminate its inpatient and acute-care hospital services and would operate solely as an outpatient facility,” the newsletter stated.
Also, the letter said that Providence would lease the hospital and would likely terminate many jobs, as it would need far fewer employees as an outpatient-only facility.
Valley General respects Providence, Fraser emphasized.
“We’ve enjoyed our relationship with Providence and they have been strong supporters of local services,” he said. “This is a good fit with Evergreen and it closely matches our needs.”
Fraser said he was excited about Evergreen’s national ratings, too. In an article on hospital safety in the August issue of Consumer Reports, Evergreen scored at 67, well above the national average, and the second highest in the state.
Providence came in at 11 out of 19 Washington hospitals evaluated, and was rated the worst in the state on infections, although it was given the best possible rating on scanning, as was Evergreen. VGH was too small to be ranked.
The VGH Board of Directors voted last week to approve the Letter of Intent to go forward with the deal. Evergreen’s board is expected to approve the Letter of Intent Tuesday.
Then the organizations will have 60 days to complete due diligence and finalize the agreement.
Valley General will keep its own name under the agreement, and will remain locally governed, with its own board of directors. A subcommittee called an Affiliation Governance Council, made up of two Evergreen commissioners and one VGH commissioner, as well some executives, will be tasked with assuring both parties’ satisfaction in the venture.
Many details of the arrangement, including the level of investment on the part of Evergreen, have yet to be finalized, but Monroe Fire Chief Jamie Silva said he is glad to hear that Valley General seems less likely to close or stop offering emergency services.
“If Valley General doesn’t stay there, we’d have to transport to Providence or Evergreen and that takes our people out of service for an hour or longer,” he said. “It compounds as you go up the Valley; Sultan and Gold Bar has that much further to go. I think it’s good news.”