County’s last independent hospital seeking business partnership

ARLINGTON — Talks between Cascade Valley Hospital and PeaceHealth for a business partnership unexpectedly broke off last summer.

Now the Arlington hospital, the last independent one in the county, is restarting talks with three medical groups to see if a new business deal can be made.

The hospital is talking to UW Medicine, Providence Health &Services and, once again, PeaceHealth, said Clark Jones, Cascade’s chief executive.

“Right now, we’re just asking for what their thoughts might be,” Jones said. Detailed written responses are due by March 2. “If we found something attractive to us, then we may go forward with one or more for a formal proposal,” Jones said. That step could come by late spring.

He said the agreement could be similar to one made by the former Stevens Hospital in Edmonds, which approved a lease of that building by Swedish, a Seattle-based medical group.

If the Cascade board agreed to a similar deal, it would allow the Arlington hospital’s taxing district to continue to own the building and other assets but be operated by another organization, Jones said.

The tax-supported hospital did better financially last year than in other recent years, making a small profit, Jones said. That’s due to an improved economy and more people getting health care at the hospital or its clinics, he said. Medical care is more widely available because of the federal requirement for everyone to have health insurance.

The move to have a business partnership with a larger health care organization isn’t driven by failing finances at Cascade, he said. It’s the industry economics of medical groups joining to together to provide services. “There is not a place for a small, independent hospital in a suburban area,” Jones said.

One example of the trend of medical groups joining larger networks occurred when the Boeing Co. last year created two large medical networks that employees can use. By getting health services in-network, employees can save money. Cascade joined one of those networks, led by UW Medicine.

Cascade was on the brink of wrapping up a deal with PeaceHealth last year. The Catholic health care organization broke off talks in July. An executive blamed the change of course on financial problems caused by a conversion to electronic medical records. PeaceHealth operates hospitals and clinics in Washington, Oregon and Alaska.

There was some public opposition to Cascade, a tax-supported hospital, affiliating with a Catholic health care organization, because of the church’s opposition to birth control, abortion and assisted suicide for those who are terminally ill.

State Attorney General Bob Ferguson issued a formal opinion in 2013 saying that tax-supported hospitals have to provide access to birth control and abortion services.

Sharon Salyer: 425-339-3486; salyer@heraldnet.com.