LUTHERAN QUILTERS – Members of the Quilts for Comfort Group stand between pews draped with some of the 205 quilts they made, in the Sitka Lutheran Church Tuesday. The group made the quilts for five local non-profits and one in Anchorage. The remaining quilts are sent to Lutheran World Relief which distributes them to places around the world in need, such as Ukraine, as part of Personal Care Kits. Pictured are, from left, Helen Cunningham, Kathleen Brandt,Vicki Swanson, Paulla Hardy, Kim Hunter, Linda Swanson and Sue Fleming. (Sentinel Photo by James Poulson)
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Daily Sitka Sentinel
Sitka Public Speaks On Hospital Merger
By SHANNON HAUGLAND
Sentinel Staff Writer
Representatives from the city and SEARHC negotiating teams fielded questions from the public Wednesday night about documents outlining the terms under which the Southeast Alaska Regional Health Consortium will purchase the Sitka Community Hospital business, and lease the hospital building.
The Asset Purchase Agreement and Lease Agreement were released to the public online Friday, with printed copies available at the Sitka Public Library.
Some of the 60 members of the public attending the more than two-hour information meeting had questions about specific sections of the APA document, others expressed concerns about the proposed affiliation, and some objected to the process and timeline leading to a final decision.
The Assembly is scheduled to review the documents and make a final decision at a special meeting 6 p.m. Monday, April 15.
The more than 100-page APA addresses terms under which Sitka Community Hospital employees will be offered employment for at least a year at SEARHC; the purchase price options; Sitkans’ access to health care; the composition and purpose of a new governance council; and various technical provisions of the document.
The audience included a number of employees from both SEARHC and SCH, four Assembly members, Community Hospital board members and members of the general public. On the panel answering questions were city consultants Sarah Cave and Steve Huebner; outside attorney Sandy Johnson; City Attorney Brian Hanson; Sitka Community CEO Rob Allen and Medical Director Roger Golub; SEARHC Senior Vice President Dan Neumeister; and City Administrator Keith Brady.
“We recognize that Sitka Community Hospital has been a great resource for Sitka for decades,” Brady said in his introduction. “We know that health care is very personal. We feel that the agreement we have negotiated is in line with the community’s needs and the goals and direction from the Assembly to ensure expanded and enhanced health care for Sitka into the future.”
Dan Neumeister, SEARHC senior executive vice president, speaks at Wednesday night’s hospital merger meeting at Harrigan Centennial Hall. (Sentinel Photo)
Consultants reviewed the process that began with informal talks and a decision by the Assembly to issue a request for proposals, followed by a review of proposals from health care entities and other businesses, and the decision by the Assembly to select SEARHC from among the five who submitted responses.
Cave said SEARHC’s proposal met some of the Assembly’s top priorities of increasing the quality and scope of health care in Sitka, mitigating the city’s financial liability, and maintaining and expanding health care employment opportunities.
She stressed that outside consultants have concluded that Sitka Community Hospital is not financially sustainable in the long term.
One slide in her Power Point presentation said:
“Every consultant engaged to evaluate SCH’s potential for survival, as well as the proposing organizations, expressed concern about SCH’s ability to compete effectively in a two-hospital community with fewer than 10,000 residents.”
“It’s just not a sustainable model,” she said.
Cave said Sitka Community’s cash position is “extremely vulnerable,” and that although the hospital started out with a strong performance this year, “historical operations have been sporadic and unpredictable from month to month.”
Assembly members have expressed concerns about the hospital’s ongoing operations and capital costs, and the pension liability of more than $30 million for its workers under the Public Employees Retirement System.
SEARHC, she said, is in a strong financial position, and has considerable financial reserves and debt capacity to fund the affiliation, a plan for a new hospital campus and “other growth projects.” She said there is also a “high degree of alignment” between SEARHC’s strategic plan and the city’s goals of affiliation.
Some members of the public had specific questions about the lengthy APA document, and needed clarification about certain provisions.
Others were concerned about the provision of services under SEARHC, access to health care, job security under SEARHC, and SEARHC’s financial security, given its reliance on the Indian Health Service for some of its funding.
Some said they didn’t have enough time to fully review the document that will affect the entire town. Others said they felt left out of the process.
“How can we be a part of this process, when it’s a done deal, and so depressing,” said Nancy Yaw Davis.
“We need information as an indigenous community,” David Sam said, in pointing to the effects of the merger on the quality of health care SEARHC already provides for Alaska Native beneficiaries, and objecting that beneficiaries had not been consulted directly. “I would hope the negotiations process would include constituents,” he said.
“We’re not getting all the information in a timely fashion,” said Carin Adickes, who is a member of the Sitka Community Hospital board. She commented on the potential loss of jobs because some current employees of the Sitka hospital don’t want to work for SEARHC. She noted SEARHC’s comment early in the process that it didn’t want the merger unless it had community support.
Fellow SCH board member Carolyn Evans asked for an explanation on why there was an election in Wrangell on whether to merge their hospital with SEARHC, and the city clerk’s office has rejected local requests on a citywide vote.
Hanson explained that it is the Assembly’s role under the state constitution to sell a public asset, and “voters can’t usurp that authority, and take that from the Assembly.”
As to why Wrangell did have a vote on the SEARHC takeover of health care services, Hanson said the community didn’t take up the constitutionality of having the vote, but noted that the SEARHC affiliation in Wrangell was “highly favored.”
Karen Lucas said the process felt rushed, and asked how the city planned to pay back the community hospital’s unfunded pension liability.
Brady responded that the city will be receiving $700,000 from SEARHC (under the consultants’ recommended payment option) and will also have the tobacco tax proceeds, which will no longer be dedicated to the hospital operation, to help cover the cost. The hospital also owes about $42,000 a month for an electronic health records system.
Assembly member Richard Wein said to Neumeister: “Thank you for giving us your health care system. But it was at the cost of the (Mt. Edgecumbe) hospital’s mission.”
On Wein’s question to the panel about the escrow account that the city must set up, Hanson said the amount the city must set aside is not yet known, but the city has hired a regulatory compliance attorney and evaluators to determine the potential liabilities, in order to make sure the city is covered. Allen said today that the hospital has a number of employment agreements that are being reviewed by the evaluators mentioned by Hanson.
On a question about whether SEARHC will build its 25-bed acute care hospital, medical offices and long-term care facility if the deal falls through, Neumeister said, the organization would.
“Our hospital is 75 years old,” and needs to be replaced, he said. He said the organization’s mission is to take care of all patients, whether they are beneficiaries or non-beneficiaries, as it does in most other Southeast communities. He said the organization has an “excellent transition plan” and is looking ahead to SCH providers joining the SEARHC staff, as well as the potential to offer more services. That will include a clinical affiliation with Swedish hospital starting next month.
“I’m excited with the opportunities to have a thriving health care community,” Neumeister said. “I think the community will be pretty impressed with what the community ends up with if the merger is allowed to take place.”
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20 YEARS AGO
March 2004
Advertisement: Tea-Licious Tea House & Bakery 315 Lincoln Street Grand Opening! Freshly Baked Scones, Cakes & Pastries Innovative Salads, Soups & Sandwiches Harney & Sons Tea. Lunch * Afternoon Tea * Supper.
50 YEARS AGO
March 1974
Photo caption: National Republican Chairman George Bush takes a drink of water offered by Jan Craddick, Sitka delegate, during the Republican convention held here. Mrs. Craddick explained to Bush that the water was from Indian River, which means, according to local legend, that he will return.