Legislators to Community Hospital: Time to go public

Local legislators say they’ve been telling officials at Grays Harbor Community Hospital for more than a year now that if they want to survive, they need to take their case to the voters and become a public hospital district.

But hospital officials have been hesitant to do that, hoping for what amounts to a fee increase from the state without sacrificing the private, not-for-profit status of the hospital.

Last week, the state Senate approved legislation that would boost the reimbursement rate for Medicaid patients at the hospital to 125 percent of the hospital’s fee-for-service rate — but only if they become a public hospital district.

“If they want our support, it is pivotal for them to be a hospital district,” said Rep. Kevin Van De Wege, D-Sequim. “It’s been more than a year now. We’ve been waiting, but they’ve always pushed it off. Time is running out. Their debt has just snowballed and they have yet to take any action to move forward to become a public hospital district. There’s no longer any excuse they can use for why they shouldn’t. They must. And the people of Grays Harbor must support them.”

“It’s time to put it on the ballot, as soon as this November, and tell the people of Grays Harbor what’s happening,” added state Rep. Brian Blake, D-Aberdeen. “The wait is over.”

“I think Kevin and I started telling them to go this direction three years ago,” said state Rep. Steve Tharinger, D-Sequim. “I understand they’d prefer to be a private non-profit, but we need to show legislators that the local community has done all they can to support the hospital and, unless they’ve gone to the voters, they haven’t done that.”

Hospital spokesman David Quigg says that the hospital’s board of directors is meeting with hospital CEO Tom Jensen and staff for a retreat to discuss the various options available to the hospital. They won’t get back until Wednesday. The Vidette has been asking for at least a phone interview with Jensen since Wednesday of last week, but he’s not been available.

Last year, officials with Grays Harbor Community Hospital lobbied local legislators for support of a bill to increase the compensation for Medicaid payments. State Sens. Brian Hatfield, D-Raymond, and Jim Hargrove, D-Hoquiam, agreed to co-sponsor the bill — but found it difficult to get anyone to pay attention to it.

The legislation languished in committee — without even getting a public hearing. The committee chair didn’t appoint staff to do a non-partisan bill report for it.

State Sen. John Braun, R-Centralia, was the prime sponsor of the bill in the hope it could be used to boost the Medicaid compensation rates for hospitals in Centralia, Moses Lake, Bellingham, Port Angeles and Aberdeen. Ultimately, Braun said on the floor of the Senate last week, the costs were just too prohibitive. But he said neither he nor his hospital officials in Centralia “recognize maybe Grays Harbor is in a tougher situation and we wouldn’t want to stand in the way.”

The bill was re-written this year by Hargrove just to help the hospitals at Moses Lake, Port Angeles and Aberdeen — with the caveat that each hospital be a public hospital district.

Hatfield said the move shouldn’t have come as a surprise for Grays Harbor Community Hospital officials. He and other legislators had been saying for years that it would be the only way for the hospital to get the extra funding they need.

“Even if this bill didn’t move forward, just by becoming a public hospital district, by its nature, would mean the hospital would be getting better compensation and would get more funding,” Hatfield said. “I think it’s long past having the conversation. They know what they need to do.”

Hatfield had hoped to give Community Hospital more time to come forward with a concrete plan on what it would be like if the hospital converted its assets from a non-profit status to a public one.

Jensen, Community Hospital’s chief executive officer, testified in favor of the measure during a Senate Ways &Means Committee hearing on Feb. 10. At that time, Hargrove and Senate staff made clear that if Community Hospital wanted the extra funds, it would mean converting to a public hospital district. During the hearing, webcast by TVW, Jensen didn’t react or comment on the proposed change in legislation.

“Grays Harbor has struggled for many years but it has been most successful at one thing and that is high unemployment rates for the last several years,” Jensen told the committee, referring to the double digit unemployment rates that have existed on the Harbor since 2008. “The hospital struggles financially because there’s no one to cost shift to. Without jobs in the community, we’re really forced to look at our government payers and one of the largest government payers is the state Medicaid program.”

However, last week’s passage of the legislation by the state Senate was the first time most of the public had heard about the possiblity of Community Hospital going from a non-profit status to a public one.

“Growing up in Aberdeen, I always thought the word ‘community’ meant it was owned by the public already,” Rep. Blake said. “I know better now, but I bet there are a lot of people who have thought the same thing.”

Blake notes a public hospital district would also increase the transparency of the hospital and its board of directors, who would all have to be elected by the public. The hospital would have to obey the Open Public Meetings Act, opening up the board meetings, which as a private institution have always been closed to the public. The budgets and financials of the hospital would also be available for public review.

By state law, a hospital district can be initiated either by the hospital or through a citizen petition method. It would then go on the ballot for voter approval.

A hospital district has set boundaries. Just look east to Summit Pacific Medical Center and its related public hospital district for guidance. Grays Harbor Hospital District No. 1 consists of the old Mark Reed Hospital campus, including its existing clinic; two clinics in Elma and the new hospital in Elma. The district boundaries stretch from McCleary to Elma, formed by the voters in 1982, according to a history of the district. The hospital just conducted public elections for three of its board of commissioners in November.

In 2010, residents on the North Beach used the petition method to try and create a hospital district encompassing the city of Ocean Shores and other nearby areas. Voters shot the measure down in the February 2011 election.

Wishkah resident Al Smith said he attended a recent Grays Harbor Democrats meeting and heard from local legislators about the need for the Grays Harbor Community Hospital to become a public hospital district.

“I thought about pushing forward, myself, on a petition process, but decided against that,” Smith said. “I’m worried about the hospital. I really hope they move forward and do the right thing.”

Community Hospital Board President Pete Scroggs told The Daily World last week that legal restrictions as a representative keep him from being able to make a positive or negative remark about whether the hospital should become a district. However, he said the board has discussed the possibility over the past year.

“Given the financial concerns of the hospital right now, we’re looking at all of the different options,” Scroggs said. “Obviously, it’s one that would provide some relief in financial terms.”

Scroggs said a steering committee has been in the works for a year now, but didn’t go into any detail as to the options being pursued.

“If the board decides to look into being a public hospital district, at the end of the day, it’s up to the voters,” Quigg said. “That’s not for them to decide or the board to decide, that’s up to the public. And even if the board decides to move forward with the plan, the hospital wouldn’t take a position on whether it’s a good idea or a bad idea. … I know the legislators are anxious for us to look into a hospital district, but we want to make sure we look into all of the options and what will be best for our patients.”

The East County hospital district levies a property tax on its residents, which the hospital uses mainly to pay off debt.

Olympic Medical Center in Port Angeles became a hospital district a few decades ago, but didn’t go out to take a property tax levy until about a decade ago, Van De Wege said.

In recent months, Grays Harbor Community Hospital officials have been gathering community support, asking residents to send letters and phone calls to local legislators to get them on their side. They’ve taken stacks of letters in to legislative offices.


State Rep. Dean Takko, D-Longview, says the support has been overwhelming. He’s been seeing letters and phone calls come in all the time. Community Hospital has posted the template of a letter to send to the local legislators on its website and advocated the public to lobby for the legislation and save “the nearly 650 jobs at Grays Harbor Community Hospital.”

But Takko and other legislators note that they completely support Community Hospital and say the hospital is taking their campaign for support in the wrong direction. Instead of lobbying so hard with the legislators, they should be lobbying the people at this point.

“The six of us (legislators) stick together pretty close but our budget leaders always push back on us and that is one of the reasons Grays Harbor hospital is in financial crisis — because they are not a public hospital district,” Van De Wege said. “And we’ve tried to help them over the years, but we’re running into dead ends real soon if they don’t become a public hospital district. And, not only that, but they need to go out to the voters and get a property tax levy. They need to do that. … I am absolutely convinced it is in the best interest of everyone who lives in Grays Harbor to overwhelmingly support them and support the continued level of service. I can guarantee you that people do not want to see the hospital get taken over by creditors, because that’s the direction things are moving and there will be a severe reduction in services offered.”

“Even if they didn’t put in place a tax levy, they will be able to get a better revenue stream from some programs just by being a public non-profit rather than being private,” Tharinger added. “They should be able to make a pretty good case to the voters.”


Tharinger notes two years ago he was able to get legislation approved that helped Community Hospital’s finances, but things for the hospital have gotten worse in recent years with layoffs and cutbacks.

In testimony to the Ways &Means Committee earlier this month, Jensen noted that 75 percent of the people that walk into the hospital have government-related insurance.

“About 7 percent of the people who walk into our facility have no means to pay at all,” Jensen testified.

Dr. Steve Reznicek, a doctor at Grays Harbor Community Hospital, testified that he’s a trained urologist, but because there are so few primary care physicians seeing new patients, he gets overwhelmed by the numbers of people who use the emergency room as their primary care providers.

“I am, as a urologist, seeing these people bounce back from the emergency room with severe problems to me directly and I am seeing that I also must take care of these individuals, ordering chest X-rays and all kinds of heart studies, stuff that I’m not trained to do but I’ve got to do it because I don’t have anyone else doing it there,” Reznicek testified.

The measure boosting the Medicaid rate passed by the Senate on a 47-1 vote and now moves to the House Appropriations Committee for further consideration.

If approved, and if Community Hospital becomes a hospital district by Jan. 1, 2015, the hospital would gain an estimated $1.74 million per year, according to a staff report made to the Senate Ways &Means Committee. Sen. Hargrove said on the Senate floor last week that those funds, along with whatever extra funds they could generate from a property tax levy, means the hospital “would be doing everything they can to keep the hospital in their community.”

“Grays Harbor hospital and the communities on the coast are an hour to hour and a half away from hospitals in the Olympia area and if we did not have a hospital in our area then, obviously, all of the Emergency Medical Service and ambulances would continue to ferry people to the Olympia area and I think this would not just be a life-threatening issue but a big hit to all of our local emergency services, as well,” Hargrove said.

Quigg says there’s still some hope the measure can be amended on the House side so that Community Hospital won’t have to become a hospital district to get the better rates.

Tharinger says the hospital should concentrate its lobbying efforts on actually becoming a hospital district.

“Time to go to the people,” Tharinger said. “That’s the way to go.”


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