Photos/Video: Yakima Memorial seeks partner to help transition into uncertain future [Yakima Herald-Republic, Wash.]

Oct. 24--Financial uncertainty for stand-alone hospitals and a changing health landscape are pushing leaders at Yakima Valley Memorial Hospital to seek a potential "affiliation" with one of four larger institutions in the Seattle area.

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Who are the proposed affiliates?

Swedish Medical Center

-- Corporate status: Nonprofit founded in 1910

-- Facilities: Three hospitals in Seattle; hospitals in Edmonds, Issaquah; freestanding emergency room and specialty centers in Redmond and Everett; a network of more than 100 specialty-care and primary-care clinics

-- Licensed beds: 1,432

-- Employees: 10,395

-- Annual revenue: $1.9 billion

-- Note: Swedish is affiliated with Providence Health & Services, which is a Catholic, not-for-profit organization founded by the Sisters of Providence in 1856 with 27 hospitals, 214 physician clinics and almost 53,000 employees across five states.

Peace Health

-- Corporate status: A Catholic nonprofit with origins in an 1890 effort by nuns to build a hospital for loggers in Fairhaven, Wash.

-- Facilities: 4 hospitals in Washington; 4 in Oregon and 1 in Alaska; numerous medical groups and laboratories

-- Licensed beds: 1,560

-- Employees: 800

-- Annual revenue: $2.3 billion

-- Note: Peace Health would be aligned with the University of Washington Medicine, which operates four medical centers, neighborhood clinics and the School of Medicine.

Virginia-Mason Medical System

-- Corporate status: A nonprofit started by doctors in 1920 in Seattle

-- Facilities: Hospital, network of regional facilities, research institute, AIDS care facility

-- Licensed beds: 336

-- Employees: 5,500

-- Annual revenue: $933 million

-- Source: Company websites

"I think what we see lying ahead is going to be some challenging times for stand-alone hospitals," Memorial board chairman Bill Dolsen said at a news conference Wednesday. "We are just being proactive and looking at our options."

The organizations under consideration are Swedish Medical Services/Providence Health and Services, Virginia-Mason Hospital and Medical Center, and PeaceHealth, in collaboration with University of Washington Medicine. Memorial initiated contact with some of the organizations last October and continued discussions through the spring.

The hospital made the announcement Wednesday morning after telling medical staff Tuesday night. The possibility of a new partnership is something hospital directors have been discussing in earnest since late 2012, though the idea first surfaced during a leadership retreat in June 2012.

Officials said it's too early to know what kind of affiliation Memorial will end up with, or how much control would remain in local hands.

They have not ruled out the possibility that Memorial would be sold to one of the other hospital corporations. But maintaining significant local control is a priority, they said.

Any partnership would have to meet the goals of Memorial's not-for-profit mission, Dolsen said.

"We've really noticed in the course of the communications and the contact we've had with these organizations that they are very, very positive about Memorial," said board vice chairman Jim Berg after the news conference. "They like what we have done; they like the spirit that we have, the nature of the care that we provide."

Officials at Providence, Virginia-Mason and PeaceHealth all said it's too early to offer specifics of what a partnership would look like.

PeaceHealth's official statement noted that Memorial shares the organizations strong not-for-profit tradition.

"PeaceHealth has a track record of expanding access and services when invited to collaborate with new communities," the statement says. "We look forward to exploring ways in which PeaceHealth and UW Medicine can work with Memorial for the benefit of their patients and community."

PeaceHealth is a huge organization, with centers in Oregon, Washington and Alaska. It's also Catholic, as is Providence, which is affiliated with Swedish Medical Center.

Providence already has a strong presence in Eastern Washington, with Sacred Heart Medical Center and Children's Hospital and Holy Family Hospital in Spokane, and St. Mary's in Walla Walla. Sisters of Providence owned Yakima Regional Medical and Cardiac Center and Toppenish Community Hospital until their sale to Hospital Management Associates, HMA, in 2003.

Providence spokesperson Colleen Wadden said Providence and Swedish have only submitted "a very initial response" to Memorial's request for a proposal.

"We regularly explore partnerships with people and different organizations that would help us improve quality and reduce the cost of care and enhance patient experience," Wadden said.

Virginia-Mason is affiliated with Wenatchee Valley Medical Center for cardiac services, and this summer started collaborating with KVH Hospital in Ellensburg for neurosurgical consultations and other services in Ellensburg.

Dolsen acknowledged that Memorial's move raises many questions. Though they've already been talking about this for a year in private, officials say they are presenting the idea to the community now to seek input and ensure that whatever is done is in Yakima's best interest.

This should be "a great advantage for patients in our community," Berg said.

Aligning with a larger institution provides more financial stability for the hospital and allows access to more advanced medical technology, he said.

"As we look to a possible alignment, one of the primary purposes of that is to enhance our ability as best we can to maintain a high quality, a broad base of health care in the community," Berg said. "It's not adverse to local health care needs at all."

Uncertainty over reimbursement is one of the biggest factors in this decision. A large portion of Memorial's patients are on Medicaid and Medicare, which historically have not reimbursed on par with private insurance.

"The state is continually having problems with funding Medicaid; the federal government is going to be reducing down Medicare payments ... There are significant changes in how two major payers are going to be approaching their responsibility," Memorial CEO Rick Linneweh, who is retiring in January, said.

Plus, with health reform, the "disproportionate share" of funding that Memorial gets for serving such a large uninsured and low-income population will be going away.

"There's just a lot more uncertainty out there; the certainty that we do have tends to be negative pressure," said Scott Wagner, secretary-treasurer of the board. "It's a very unsure horizon."

While remaining a stand-alone hospital puts Memorial "in increasing jeopardy," Berg said, nothing is set in stone, and it's possible that hospital leaders might conclude after a year of investigation that none of the Seattle organizations are a good fit.

"As board members, we are vested with taking measures and investigating things so we can best preserve Memorial in its commitment to this community," Berg said. "We would hope that we can find something that will allow us to maintain as much local control as possible, and if we can't, maybe we stay stand-alone."

Officials promised to give periodic updates as plans develop, but said the decision process will continue for at least the next year.

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