Although the move will end its 46-year history as an independent community hospital, Stevens will have access to the financial resources of a much larger organization, allowing it to provide new services in the community, both sides said.
This includes $600,000 in monthly lease payments, which are to increase 3 percent each year, for the 30 years of the agreement. The Edmonds hospital can use the money to promote community health programs, which could include expanding mental health services, providing health care to the uninsured or programs to battle childhood obesity and diabetes.
Swedish, a nonprofit health care organization, will take over management of the Edmonds hospital.
The agreement with Swedish was voted on unanimously Wednesday by the Stevens Hospital board. It won the backing of board member Dena Knutsen, who acknowledged that she had voted “no” in several steps leading up to Wednesday's vote.
“I believe there is potential in this deal,” she said. “There's potential for the community and for this hospital. And I do believe that in the spirit of what has been proposed between Swedish and Stevens, we can do great things.”
Union and physician groups also backed the proposal.
“This is an absolutely historic day,” Diane Sosne, president of the Service Employees International Union No. 1199 NW, which represents professional, technical and service workers at the hospital. “Our union is proud to endorse this alliance.”
The Swedish-Stevens agreement must be approved by the state Department of Health, a process that could take about six months, said Mike Carter, Stevens' chief executive.
Barring any snags, the partnership between the two organizations could formally begin in late summer or early fall.
One big factor pushing the Stevens Hospital board toward considering a new business partnership was the cost of needed improvements — an estimated $179 million over six years, according to a consultant's report.
The Stevens-Swedish partnership will allow more health care services to be provided locally in south Snohomish County, said Cal Knight, Swedish's president and chief operating officer.
It also allows Stevens to benefit from Swedish's name recognition and expertise in medical specialties.
Over the next six months, officials from both organizations will look at which specific specialty services could be offered at Stevens, Carter said. “I almost feel like a kid in a candy store to bring this type of expertise into our community,” he added.
Swedish operates three hospitals in Seattle and is opening a fourth in Issaquah next year, key pieces of a health care group that also includes 40 specialty and primary care clinics and a visiting nurse service that operates in Snohomish and King counties.
Last year, Swedish Health Services had revenues of $1.3 billion.
In January, Swedish announced a bold new entry into the Snohomish County market — a standalone or satellite emergency room and other medical services that will be located in a new $30 million medical office building. It is expected to be built near the 128th Street exit of I-5. It is scheduled to open at the end of this year.
Stevens' name will likely change. A decision could be announced in a few weeks, officials said.
The hospital's taxing district, which includes property owners in Brier, Edmonds, Lynnwood, Mountlake Terrace, Woodway and nearby unincorporated areas, will continue to collect current bond and levy taxes to help pay for services.
In addition to monthly lease payments, Swedish has pledged to make $90 million in general investments over the next decade and $60 million in building improvements and expansion.
This includes a sophisticated and expensive electronic medical records system, expected to be ready to turn on by early 2012, Knight said. The system is now used at all of Swedish's hospitals and clinics.
Swedish also plans to establish electronic monitoring of patients in Stevens' intensive care unit, a system now in place at its three hospital campuses in Seattle. Through this system, intensive care beds are electronically monitored day and night by nurses at a remote center and by an intensive care doctor, in addition to bedside care.
Instituting both systems at Stevens is expected to cost about $15.5 million.
Ties between Swedish and Stevens span nearly two decades. Since 1991, Swedish has provided cancer care and heart and vascular services at Stevens through the Swedish Cancer Institute and Swedish Heart and Vascular Institute. Combined, Swedish now has 50 employees working at Stevens.
The deal at a glance
Highlights of the proposed management agreement between Swedish Health Services and Stevens Hospital:
Swedish will pay Stevens $600,000 a month in lease payments, which is to increase 3 percent a year for 30 years, commit up to $90 million in capital upgrades during the first 10 years and an additional $60 million in facility improvements. Swedish will put at least 25 percent of the earnings from Stevens back into its operations.
Stevens Hospital board members will continue duties such as overseeing charity care policies, ensuring that hospital services are properly funded and that union employees are treated fairly.
The hospital's Certificate of Need, a state document required for the hospital to operate, will be transferred to Swedish. Stevens Hospital will retain ownership of all assets.
Swedish is committed to retaining existing employees and management staff. Employees will receive the same pay, benefits, positions and shifts.
The contract with the Service Employees International Union will continue under its existing terms under Swedish management.
Possibilities for added services
Developing, supporting and/or operating community clinics to assist the uninsured.
Health improvement programs, such as classes to quit smoking, battle childhood obesity and manage diabetes.
Community safety programs such as bicycle helmets for children, baby car seats and helping seniors avoid falls.
Developing a mental health services network among clinics, hospitals and government agencies.
A team with Swedish Health Services and Stevens Hospital staff will help coordinate the change.
The state Department of Health must approve the agreement.
Swedish could take over management of the hospital late this summer or early fall.
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