By SHANNON HAUGLAND
Sentinel Staff Writer
As the city moves into the next phase of the SEARHC proposal to purchase Sitka Community Hospital, the city-owned hospital has been doing business as usual, with the focus on patient care, said hospital CEO Rob Allen.
“We are making sure we can take care of patients and continue to operate,” Allen said. “We’re definitely doing that.”
The Assembly voted in August to move forward into the next phase of the offer by SEARHC to purchase Sitka Community Hospital, which included a guarantee to retain SCH employees in Sitka and a payment of between $9 million to $16 million.
The city appointed a team to work on the next phase of due diligence and negotiations.
City Administrator Keith Brady said the two negotiating teams have not had many meetings, but he and Dan Neumeister, SEARHC senior executive vice president, are speaking regularly.
Both SEARHC and the city teams are working on due diligence, that is, for each party to gather all the information necessary to ensure that the deal to combine the hospitals will go through as envisioned, and eliminate possible financial risks to their side.
“It’s exhaustive, it’s a lot of information, but it’s good information,” Brady said.
The due diligence portion will help answer the question for both entities, “Is it a good deal we’re getting into?” Brady said. “We should be asking, can they do what they said they will.”
SEARHC and the city signed a Letter of Intent outlining details for SEARHC to assume the provision of health care services for the community, guarantee similar employment for all Sitka Community Hospital employees, and equal access to health care services to beneficiaries and non-beneficiaries. SEARHC says it plans to build a new 25-bed health care facility, medical offices and a 20-bed nursing home on Japonski Island to serve all Sitkans.
“The biggest thing is whether SEARHC has the ability to build the hospital they say they are going to build,” Brady said. “That’s important because it’s part of their proposal, it’s part of the deal of expanding and enhancing health care.”
The city has received a number of requests for information under SEARHC’s due diligence process, and the city is working on its own list.
“Part of it is we want to hear from Assembly members on due diligence,” the administrator said Monday. “That should be going out today, and we’re hoping they can spend a week thinking about it getting back to us next Monday or Tuesday.”
The due diligence will also include a study of the cost of the city’s obligation to retirees under the Public Employees Retirement System.
While there haven’t been many changes at SCH since the signing of the Letter of Intent, the board did make the decision at a recent meeting to halt the conversion to the Cerner electronic health records system. SCH negotiated the contract with Cerner before the city made the decision to sell the hospital. Officials said halting the installation will free up hospital staff time that was being spent on Cerner, but the deal with Cerner will obligate the city to continue its monthly payments for some time.
Allen said employment has stayed steady at SCH, with no loss of doctors or physician assistants. The letter of intent includes provisions for Sitka Community to reach out to SEARHC for help during the transition.
“We’ve asked for assistance in a few areas, and we’ll continue to do that,” Allen said.
