The preliminary round of Valley General Hospital‘s hunt for a business partner is over.
Seattle’s Swedish Health Services is out. Providence — and thr
ee other health care organizations — are in.
The next step is for the Monroe hospital’s board and administration to meet with each organization for in-depth discussions, said Mike Liepman, Valley’s chief executive.
The key question is: “Can we work well together?” he said.
Last month, the hospital announced that it was contacting eight health care organizations in Western Washington about the potential for business partnerships. The offer was wide-ranging, anything from adding specific new medical services at the hospital to leasing the hospital or selling it outright.
In addition to Swedish and Providence Health & Services, the parent organization to Providence Regional Medical Center Everett, offers went out to Virginia Mason and UW Medicine, both in Seattle; Skagit Valley Hospital in Mount Vernon; Overlake Hospital Medical Center in Bellevue; Evergreen Hospital Medical Center in Kirkland; and PeaceHealth, a Catholic health care system with hospitals in Alaska, Washington and Oregon.
Providence and UW Medicine said they were interested. And Evergreen Hospital Medical Center and Skagit Valley Hospital offered a joint proposal, Liepman said.
The request for partners from the Monroe hospital follows four consecutive years of financial losses for the taxpayer-supported hospital, which has an operating budget this year of $55 million. For comparison, Providence, the county’s largest hospital, has an operating budget of $600 million.
Over the past decade there has been a wave of mergers, acquisitions and other business arrangements in health care, including some between smaller community hospitals and larger health care organizations.
The most recent example in Snohomish County occurred last year, when Swedish took over management of the former Stevens Hospital in Edmonds, now called Swedish/Edmonds.
Liepman said the talks with other health care organizations could move more quickly than people might think, in part because Valley General is a relatively small community hospital.
“We don’t have to worry about, ‘Does someone have to give something up to make it work?’ ” he said.
An agreement could be wrapped up before the end of the year, Liepman said.
The Monroe hospital hopes to retain some control so that it can continue to respond to the specific needs of the community for health care services, he said.
After initial talks with health care groups, the next step would probably be a non-binding letter of intent, Liepman said.
Dave Brooks, Providence’s chief executive, noted that the Everett hospital is part of the larger Providence Health & Services, which has 28 hospitals in five western states.
Additionally, there have been long-standing ties between the Everett hospital, east Snohomish County and the Monroe hospital, he said.
This includes a Providence Physician Group clinic in Monroe, across the street from the hospital.
In its 60-page proposal, Providence outlined several potential business arrangements, including acquiring the hospital, Brooks said.
Providence Health & Services has several types of business arrangements with hospitals it has recently acquired in Oregon, including leasing and buying, he said.
UW Medicine, which is affiliated with the university and operates hospitals and clinics in Seattle, has recently made two moves to expand their patient base. The organization officially took over Seattle’s Northwest Hospital in January 2010. And it now is making a business proposal to Valley Medical Center in Renton.
The organization didn’t make a specific proposal to the Monroe hospital. Instead, it outlined the medical services it has and “how we could continue to partner with them as needed,” said Johnese Spisso, chief health system officer.
Evergreen Hospital Medical Center’s proposal to Valley General includes a potential partnership between three public hospital districts — Evergreen, Skagit Valley and the Monroe hospital, Liepman said.
In essence, the goal would be to create a relationship that ensures the viability of the Monroe hospital through decreasing costs and improving efficiencies, said Kay Taylor, an Evergreen vice president.
Swedish, which has made two major expansion moves in Snohomish County, ultimately decided not to put in a proposal, Liepman said.
The organization felt it already had a number of major initiatives under way, he said. In addition to taking over administration of the former Stevens Hospital in Edmonds last year, it opened a new satellite emergency room and medical offices in south Everett last month.
It also opened a similar satellite emergency room in Redmond in December. And it is building a new $200 million hospital in Issaquah, with the first part of the project scheduled to open this summer.
Sharon Salyer: 425-339-3486 or salyer@heraldnet.com.
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