Prov. last summer thought VGH better as an 'outpatient hospital'
By Polly Keary, Editor
Providence Regional Medical Center was not interested in a partnership with Valley General Hospital last summer if VGH remained an inpatient hospital.
A series of emails acquired in a public records request earlier this month shows that, when Providence and Valley General seriously discussed a possible partnership last summer, the deal would only happen if VGH decided to end inpatient care.
The conversation began between Providence CEO Dave Brooks and Valley General interim CEO Michael Fraser at the end of May last year.
In early June, Brooks requested detailed information about VGH, including information on debt, inpatient and outpatient care, finances, retirement plans of employees, taxes and more.
June 21, Fraser referenced an earlier conversation about impatient care at the hospital.
"I have been an advocate for maintaining inpatient beds at VGH," he wrote in an email to Brooks. "Some of that is because I feel that an Emergency Department without an inpatient capacity is really high level urgent care. The practical application of that is ambulances will bypass the hospital and take patients to what they perceive the highest level of care."
Fraser went on to say that he'd thought of a "compromise." VGH could just keep observational beds open, he suggested.
"It would allow the ambulances to come here most of the time and for the hospital to take care of a good many of the urgent problems," he said.
After commenting on the possible ramifications of such a move, he said, "I know that you are not convinced that VGH can continue to support inpatient care and that other alternatives should be considered."
Brooks replied that the idea had merit, and a few days later gave Brooks a "heads up" that Providence would that week begin promoting the medical building that the Providence organization planned to build at North Kelsey.
"Even though our VGH/Prov discussions are reenergizing, please know that our plans for the replacement have in some form or another been in the works for a few years and solidified over the last half year as our direction was clearer," he said.
Fraser met with leaders at Providence, including Brooks, Aug. 7. The following day he wrote a memo to VGH's board of directors.
He wrote that Brooks had said that inpatient admissions were declining, and that it was due in part to a trend in healthcare moving away from inpatient care.
What Brooks expected to see in coming years was a move on the part of smaller hospitals to become "outpatient hospitals" that offer an array of hospital services with the exception of inpatient beds. Instead, he said, the inpatient beds would be replaced with observation beds.
About 9-14% of the inpatient beds in Providence Everett and Seattle were on observation status, he said.
"Providence feels that Valley General Hospital would function well as an 'outpatient hospital,'" Fraser wrote, saying that anti-trust laws might prevent Providence from participating in the discussion about ending inpatient care.
"The commitment to this would have need to occur if there was to be further discussions with Providence," Fraser wrote. "I know Providence does not want to be perceived as closing inpatient beds in Monroe."
If VGH did decide to become an outpatient hospital, Brooks envisioned a partnership ensuing, and the hospital would then be named Providence Regional Medical Center Monroe Campus. They would fund the operations of the hospital. And they would consider expanding some services such as hospice.
Fraser ended the memo saying that he in turn had expressed an expectation that Providence would do more for poor patients.
"I indicated to them that Medicaid, traditional Medicare and uninsured patients were not accepted at their Monroe clinic," he wrote.
Providence leaders responded that Providence does a great deal of uncompensated care and suggested that it was hard for new patients to gain access to the busy clinic.
"While I did not state it at the time, when Collette Reams was working on the new Medicaid information system for the Emergency Department, the clinic manager from Providence Monroe was very clear that they were not accepting new Medicaid patients," Fraser wrote, saying that he felt Providence representatives understood that the VGH board of commissioners would want to see them demonstrate greater commitment to the poor of the valley.
Brooks later suggested that Fraser and commissioners tour the Mill Creek Swedish campus to learn about the "advanced and robust 'outpatient' approach" there.
Aug. 15, Brooks sent a formal letter to Fraser, making it clear that Providence was only interested in an outpatient hospital.
"Providence has no interest in acquiring, leasing or otherwise operating its acute care hospital services," he wrote. "We understand our position may result in the district pursuing other options and we respect such a decision."
Last week, Tom Brennan, Chief Strategy Officer at Providence, said that Providence essentially just wanted to learn what VGH wanted to do.
"Our position was, you need to decide what you want to do," said Brennan. "If they came to the conclusion they didn't want to operate a hospital, we would talk about how to use the physical assets in the community, but we weren't in a position to operate another hospital."
A lot of care that once was performed on an inpatient basis is now outpatient, he said.
"As we look at where health care is going, the definition of a hospital is changing," he said. "A lot of care is outpatient."
Providence never tried to dictate VGH's course of action, he said.
"It's not our position to decide what the hospital and its commissioner want to operate," he said, but if VGH did decide to cease inpatient care, Providence would have taken the building on and made a "long-term commitment," he said.
Talks came to an end in September because of VGH's desire to continue inpatient care, according to a brief in an employee newsletter published shortly thereafter.
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