Capella pulls out of talks with Valley General
MONROE - Valley General Hospital announced last week that it has suspended talks with Capella Healthcare on a possible partnership.
“We have worked nonstop for almost a year to make this partnership happen,” Valley General CEO Mike Liepman said. “Unfortunately, we simply weren’t able to find a structure that worked for both parties because of finances.”
Valley General has been vocal about its financial issues.
Declining reimbursement rates for Medicare are expected to cost the public hospital $2.3 million in revenue for 2012. Changes at the state level will cost another $800,000. Charity care and bad debt also is impacting the hospital, costing $8.3 million in 2011, or about 17 percent of its budget. That amount is one of the highest for any hospital in the state.
“With the downward pressure on reimbursement from federal and state budgets, along with proposed reductions from insurance companies, we simply could not find a financial model that would work for both parties,” said Richard Charbonneau, vice president of business development for Capella.
Most area hospitals are reporting declines in patient volumes as people delay seeking care or reduce their spending for health services in a difficult economy, according to Valley General. The current economy has been the underlying force for the high level of merger and acquisition activity in the Puget Sound area.
Valley General is in discussions with other regional hospital systems. Most recently, Valley General partnered with the UW Medical Center to link the community hospital with a state-of-the-art stroke treatment program.
In addition, the board of hospital commissioners will consider placing a levy lid lift on the November general election ballot to get the hospital the funding it needs to continue as an active member of the health care safety net in East County. Valley General has the lowest levy rate in the state at a little over nine cents per $1,000 of assessed value. That is about $27 per year for a $300,000 home.
“Now is the time to have a frank conversation with the community about what health care delivery will look like for central and east Snohomish County,” Liepman said.
Liepman recently announced that he was stepping down as CEO at Valley General for another job.
By TRIBUNE STAFF
Published April 25, 2012