Daily Sitka Sentinel

Assembly Supports Sitka Hospital RFP

By SHANNON HAUGLAND
Sentinel Staff Writer
    The Assembly voted 6-1 Tuesday to direct the city administrator to move ahead – with Assembly members’ contributions – in drafting a Request for Proposals for the “purchase, lease, partnership, management or affiliation” of Sitka Community Hospital.
    Richard Wein cast the dissenting vote.
    The Assembly held the special meeting to discuss a six-page draft of an RFP seeking proposals from parties interested in buying, leasing or managing the community hospital, or operating it under some sort of partnership or affiliation.
    In addition to approving the concept of soliciting proposals on the future of the hospital, the Assembly agreed that members would be free to contribute ideas to the RFP before it is presented in its final form at a public meeting, expected in late January or early February.
    The Assembly met in executive session for about a half hour at the beginning of the meeting to review legal issues with City Attorney Brian Hanson, When members returned to regular session, they agreed to waive their attorney-client privilege on the draft document, and distributed copies to the public at the meeting.
    The meeting was attended by a half-dozen Sitka Community Hospital employees and a few other members of the public.
    The RFP represents the end stage of a more than two-year process that started with discussions between Sitka Community Hospital and the Southeast Alaska Regional Health Consortium about how the two health care providers could better cooperate to reduce duplication of services, reduce costs, and provide better and a greater variety of health care services in Sitka.
    Meetings between the two entities, facilitated by an outside consultant, eventually led to a proposal by SEARHC to purchase Sitka Community Hospital for $6 million, with the aim of consolidating most hospital services at SEARHC’s Mt. Edgecumbe campus.
    The Sitka hospital retained its own consultant, who reported on ways the community hospital could improve operations and be successful in the long-term. An SCH board-driven Request for Qualifications, seeking offers on taking over management of the hospital, didn’t yield any formal responses, although a few health care companies expressed interest.
    The draft RFP up for discussion by the Assembly Tuesday was intended to be broader in scope, asking for all ideas for the future of SCH.
    A more recent development in the discussion has been the completion of a financial assessment to determine the amount of the “unfunded liability,” or the debt that the city hospital would still have for employee retirement, if the city were to sell SCH. That figure came to over $37 million.
    After the Assembly voted Tuesday night in favor of having the city administrator, with input from Assembly members, refine the RFP, Wein proposed limiting the scope of the RFP to entities that wanted to manage the hospital. He said he believes SCH has the tools it needs to “get its house in order,” and should start the process by looking for parties interested in managing SCH. The city needs to act “expeditiously,” Wein said, and commented that the city has already lost a lot of time through the collaboration process with SEARHC.
    “SEARHC is not standing still,” Wein said. He noted its purchase of land next to the city hospital, and legislation currently moving through Congress to transfer 19.25 acres of land on Japonski Island to SEARHC from the Department of Health and Human Services. SEARHC has previously outlined its vision for a combined Sitka health care complex at that location. He also mentioned the new agreement between the hospitals to close the obstetrical unit at Sitka Community Hospital and shift all OB education services and deliveries to the Mt. Edgecumbe Hospital. (See story, this page.)
    Assembly members who voted in favor of a broad-scope RFP said it was in the best interest of the city to cast a wide net in the request, and not limit it to just the purchase or management of Sitka Community.
    “If we limit it to management, we’re shutting ourselves down,” Steven Eisenbeisz said. He’s most interested in the ideas for affiliation or partnership, but feels the lack of responses to the RFP for management options means the city has to be open to other ideas, he said.
    Aaron Bean admitted the process may not happen as fast as some would like, but felt the Assembly was heading in the right direction with the process.
    Bob Potrzuski and Ben Miyasato also spoke in favor of a being open to more ideas than just the management option.
    Wein’s motion to limit the request to only management proposals only failed on a 1-6 vote, with Wein voting in favor.
    From the public, Travis Hudson said he was glad to see the RFP under way, but felt the unfunded liability meant the purchase option should be off the table.
    “That amount of value we need for a sale means we have to suck it up and support the hospital,” he said. “I don’t think a purchase is in the cards.”
    Acting SCH Board President Connie Sipe talked about the range of successful options at work in smaller hospitals around the state, and limiting the scope of offers would mean the city wouldn’t hear about them.
    Assembly members said they wanted to contribute ideas for the final RFP, or work on a committee to fill in some of the gaps they saw in the present draft. In the end it was decided they would submit comments to Administrator, in order to avoid the possibility of Open Meetings Act violations.
    It was agreed that members of the public would be welcome to look at the RFP and contribute their own ideas, either through Assembly members or by testifying at the public meeting where the final RFP will be introduced.
    The current draft sets out three phases for entities submitting proposals, and includes requirements to retain “ongoing meaningful (Assembly) participation in the governance of SCH,” as well as describing plans and intentions of continued employment of the hospital’s existing employees, including management.
    The draft RFP said the Assembly is looking for the following characteristics in general:
    – a commitment to the continued provision of quality health care services to Sitka residents
    – a shared strategic vision for the future of SCH
    – a demonstrated culture of quality and accountability
    – a proven track record of operational success to ensure the ongoing vitality of SCH as a stable and professionally rewarding organizations for its employees and medical staff
    – sufficient capital to allow SCH to maintain high quality care for patients and improve facilities
    – a system reputation that will add value to SCH’s brand and reputation within the community and among physicians, consumers and insurance plans
    – capabilities, facilities, clinical integration, leadership and strategies necessary to be well positioned for success in an era of health care reform
    – a commitment to transparency in dealing with its constituencies
    – a demonstrated history of following through on promises and commitments
    A copy of the draft RFP is available on the city website, under the documents for the Tuesday special meeting.