Changes coming to Valley General Hospital

MONROE — Mike Liepman, chief executive at Valley General Hospital, has announced he is leaving the hospital in June.

Liepman, 58, has accepted a job as chief operating officer of Skagit Valley Medical Center in Mount Vernon.

His departure comes as Valley General is in negotiations with Capella Healthcare, a Tennessee-based, for-profit health care organization, to lease the taxpayer-supported hospital.

The hospital is struggling financially, a common trend among smaller community hospitals in Washington.

Valley General lost between $500,000 and $700,000 in November and December, part of what could add up to an annual operating loss for 2011 of nearly $4 million, Liepman said.

The losses led Capella to reconsider the offer it had made to lease the hospital, which included $14 million in capital improvements and leasing the hospital for 40 years for a lump sum payment of $33 million.

“They came back and said, ‘We need to take another cut at how we structure this deal,’ ” Liepman said.

Part of the hopsital’s losses are attributed to the high number patients treated at the hospital who can’t pay their bills, he said.

Overall, about 20 percent of all medical services provided by the hospital have to be written off as either charity care, people who can’t pay their bills, or who pay just a portion of their bills.

“That’s a big burden for a little hospital,” Liepman said.

That’s expected to add up to about $5 million this year out of a $51 million budget.

“We continue to lose money at a pretty steep rate,” he said. “We’re still struggling to come anywhere close to having a (positive) bottom line.”

The hospital lost $3 million in 2010.

Cassie Sauer, spokeswoman for the Washington State Hospital Association, said hospitals face problems not found in other types of businesses.

“You couldn’t walk into a clothing store and say, ‘I want that blouse, but I don’t have any money,’ ” she said.

But if someone is injured in a wreck and taken to an emergency room, “they treat everyone who walks in the door regardless of their ability to pay,” she said.

A hospital’s financial stability also is affected by its location, Sauer said. Some hospitals have far more patients who are insured through Medicare and Medicaid. “They pay well below what it costs to provide care,” she said.

Liepman said the past two-and-a-half years at the hospital have been tough. “You’re kind of constantly looking for the silver bullet to fix everything,” he said.

Neil Watkins, chairman of the three-member hospital board, said that the board is working hard to find a business partnership agreement with a health care organization “to sustain the hospital for many years going forward as the highest quality hospital possible.”

Even with the hospital’s budget woes, board member Alice Cabe said the hospital continues to have the support of the community.

When she’s out shopping in Monroe, people often tell her they want to continue to have a local hospital, she said.

“They say keep working on this; it’s really important to keep this hospital here,” Cabe said.

Sharon Salyer: 425-339-3486 or

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