Daily Sitka Sentinel

City to Seek More Hospital Proposals

By SHANNON HAUGLAND
Sentinel Staff Writer
    The City and Borough Assembly decided at a special meeting Tuesday night to open up the process of deciding how hospital services will be provided for Sitkans in the future.
    Already on the table were proposals from SEARHC to buy Sitka Community Hospital and one from SCH showing how the city hospital could survive as a stand-alone facility. A local businessman has also stated that he would like the opportunity to make a bid on buying the hospital.
     The motion to publish a request for additional proposals came at the end of a three-hour special meeting about the hospital. The motion passed 6-1, with Steven Eisenbeisz opposed.
     The motion was “to ask staff to work with an outside firm to draft an RFP, for Assembly review, seeking solutions for our Community Hospital in Sitka through collaboration, affiliation, a management agreement, an outright sale, a merger or the creation of a non-profit, with the goals of increasing the quality of health care offered to Sitkans, the scope of services offered in Sitka for Sitkans, maintaining or increasing the employment in our health industry in Sitka, and improving the financial position of Sitka Community Hospital including our PERS obligation and operational losses.”
    Voting in favor were Tristan Guevin, Kevin Knox, Aaron Swanson, Aaron Bean, Bob Potrzuski and Mayor Matthew Hunter. Eisenbeisz said he voted against the motion because it lacked clarity.
    “I just didn’t know what I was voting on,” he said today. “I would’ve liked to have seen it gone to a committee to refine the motion before it comes back to the Assembly.”
    In the prior discussion there was agreement among the Assembly members that SCH should start following through on some of the recommendations of Stroudwater Associates, the consulting firm that it hired to advise on the feasibility of continuing to operate as a community hospital.
    Those recommendations included eliminating OB services and making surgery available by appointment, rather than 24-7.
    About 60 members of the public attended the meeting at Centennial Hall. A number testified about the need for a town hall meeting for a more general discussion about health care in Sitka and to bring more of the public into the discussion.
    “A lot of us have questions,” said Lindsay Evans. “I think a public dialog is very important. I’d like to hear from the Native population ... I don’t know what the rush is.”
    Bryan Bertacchi, president of the hospital board, urged the Assembly to be as specific as possible.
    “If the community desires to move forward with a change to the hospital, let the process be designed to answer important questions of the community,” he said. “Will this change/improve health care in Sitka; can they demonstrate strong financials, can they demonstrate strong experience in health care and in Alaska, how will they reduce financial risk for the city, how will they reduce the $31 million PERS risk for the city, how will they provide stability for hospital employees, will they provide charitable services to the community, how will they provide value for the hospital property, what is their track record in responding to the community and providing community outreach, do they establish best practices in health care? Answering questions like those will lead to the right answer for the community.”
    The discussion on improving health care services in Sitka, and improving finances for SCH and the city, started more than a year and a half ago.
    The city and the Southeast Alaska Regional Health Consortium jointly sponsored a study by ECG, a consulting firm specializing in hospital mergers to make recommendations on how the two hospitals in Sitka could work together.
    In their final report, the ECG said the best solution for Sitka, both financially and in improved health care, would be to merge with SEARHC, which then offered to purchase the Sitka hospital for $6.5 million.
    SCH commissioned the Stroudwater study and came up with its “Plan B,” to show the Assembly how it could continue to operate on its own.
    In the meantime, Rob Petrie, a businessman with property in Sitka and Texas, said he wanted the opportunity to make a bid on buying the hospital.
    At Tuesday night’s meeting there were questions from the public about how the various options would affect hospital employees and patients, and about the decisions on major investments by the hospital that are being delayed while the Assembly considers the SEARHC offer.
    Sitka Community CEO Rob Allen said today said he was pleased to see general support for the Stroudwater report from the Assembly, which will allow the hospital to go forward on some of the consultant’s recommendations.
    “There’s been several months of uncertainty with the RFP process,” he said. “That will be a challenge for us and the board as far as making decisions.”
    Allen said it’s still not clear to him what the priorities of the Assembly are.
    “I still would love to see more discussion of what they’re trying to accomplish,” he said. “Is it to improve health care or lower the risk to the city? That will be important for any process. It’s important to have that identified up front.”
    Mayor Matt Hunter told the audience at the outset that his top priorities are to improve the quality of health care and maintain jobs in Sitka, as well as improve the hospital’s finances.
    He and others highlighted factors that need to be taken into consideration in the discussion, such as Medicaid and Medicare funding, the possible repeal of the Affordable Care Act, the history of financial crises at the hospital, the need for stability in employment, and the unfunded pension liability for current and past hospital employees.
    The hospital is currently paying its share of the liability, estimated at around $1.6 million annually. In its offer to buy the hospital, SEARHC noted that the sale would allow the city to save the $150,000 annual appropriation to the hospital for capital needs and the $600,000 in tobacco tax proceeds that the city dedicates to the hospital.
    Hunter supported putting out the RFP, and provided the wording of the motion that was adopted.
    Eisenbeisz at the outset of the meeting expressed concern that the Assembly was not addressing how a sale or merger of the hospital would improve health care in Sitka.
    Eisenbeisz stated his support for the hospital, and for giving it the tools it needs to carry out the recommendations of Stroudwater. He added today he would like to see a list of goals, objectives and time line.
    “We need solid results in a year, or we’ll have no choice other than to go out for (outside) management,” he said. “I’m in support of giving them a year to meet (Stroudwater’s) objectives and seeing where that takes us.”
    Converting long-term beds to swing beds, and expanding the clinic and increasing efficiency were among the other recommendations.
    Assembly member Bob Potrzuski wondered whether the board and hospital officials would be able to make the changes, given public pressure against them. He cited a similar Stroudwater recommendation from more than a decade ago calling for the elimination of OB services and reduction in surgical services, for financial reasons. In the end, the services were not cut.
    “Can the board, can senior management, stand up to pressure from the public to make these changes,” Potrzuski asked. “That’s going to be key in this whole point. Sitkans want a lot, but they don’t necessarily want to pay for it yet.”
    Bertacchi agreed that the public does need to weigh in.
    Asked for a comment, SEARHC Chief Operating Officer Dan Neumeister said, “Clearly, it’s been a journey.” He said he would encourage the city to move forward with their RFP, which may yield other “creative opportunities,” other than the SEARHC option.
    “I would encourage you to go forward with the process,” he said. “It seems to me a prudent way to preserve all options.”