Hospital resumes merger talks with 2 hospitals
MONROE - Valley General Hospital has restarted merger talks and is looking at working with either Providence Regional Medical Center Everett or Evergreen Healthcare of Kirkland.
“Serious discussions with each of them are underway, and we should be coming to some conclusions in the next month,” said Michael Fraser, Valley General interim chief executive officer, last week.
Both hospital systems confirmed talks with Valley General.
Valley General, a public hospital, has been recording debts for the past five years due to charity care and bad patient debt as well as declining reimbursements from both the state and federal government.
The partnership would help the hospital’s financial situation, which Fraser admitted “isn’t great.”
A merger could also mean an increase in specialists, more health care services, new medical equipment or hospital renovations.
Since Valley General is a public hospital, the emergency room can’t turn away people who don’t have health insurance or the ability to pay. As a result, unpaid hospital bills Valley General wrote off in 2011 added up to $8.3 million — the highest for any hospital in the state.
Uncompensated care by the end of 2011 was expected to exceed $1 billion in Washington state, a 2011 state Office of the Insurance Commissioner study found. In general, rural areas have a higher number of people who don’t have health insurance, the study noted.
Uncompensated care affects people who do have insurance in the form of higher premiums, the study found.
Valley General is a taxing district and collects from home owners about nine cents per $1,000 assessed home value, the lowest public hospital levy rate in the state.
The hospital board of commissioners hasn’t yet decided whether or not to raise the levy rate. If they were to do it, Fraser said, it would likely come before voters in the 2013 February election.
The hospital worked on an agreement for a full year with Capella Healthcare before the deal stalled. Mike Liepman, Valley General chief executive officer at the time, said they “simply weren’t able to find a structure that worked for both parties because of finances.”
Representatives from both sides made comments that indicated that the merger was as good as done until just weeks before agreements were to be finalized. Capella pulled out of the deal in April 2012 citing financial problems.
At the time, Valley General spokeswoman Collette Reams said the hospital was coming up with “wish lists department by department.”
Other hospitals across Washington state have been using the “merger” strategy to help ease the pressure the economic burden of the health care system is putting on their budgets.
Stevens Hospital in Edmonds inked a deal with Swedish after realizing the public hospital couldn’t afford to build a new emergency room through taxes. Swedish pays Swedish Edmonds monthly lease payments totalling $7.2 million a year.
“We’re very pleased with the progress we’re making and continue to be,” said Marcel Loh, chief executive of Swedish Suburban Hospitals and Affiliates.