Summit Pacific wants Montesano excluded from new district

Officials at Summit Pacific Medical Center in Elma are making the case that Grays Harbor Community Hospital shouldn’t include Montesano in a proposed new hospital district, adding to a growing cacophony of voices that want the East County area excluded from the upcoming ballot measure.

In fact, the East County hospital contends, including Montesano in Public Hospital District No. 2 would seriously restrict Summit Pacific’s ability to grow in the future.

“This proposed boundary would essentially land lock (Summit Pacific) and not allow any room for future growth west, for services or tax revenues,” according to a document prepared by Summit Pacific and shared with Community Hospital’s steering committee.

It’s a financial issue. Grays Harbor Community Hospital wants the revenue that would come from Montesano property tax owners. And Summit Pacific sees the Montesano territory as a possible direction for growth.

The Grays Harbor County commissioners actually set the boundaries that will be proposed to voters on the Hospital District 2 vote. The boundaries Grays Harbor Community Hospital proposed to the commissioners include all areas of Grays Harbor County not already covered in Summit Pacific’s Public Hospital District No. 1, with the exception of the Oakville area. Those boundaries include Montesano and Brady, a point of contention with some residents and elected officials.

The East County hospital’s CEO, Renee Jensen, explained that the two facilities are different, and also complementary. Grays Harbor has a higher trauma designation and provides more specialists, surgery and other inpatient services, while Summit Pacific focuses on primary care services and providing initial, critical care to its emergency room patients. Summit Pacific’s services accounted for more than 1,000 referrals to Community Hospital in the last year, Jensen points out.

“We are a beautiful complement to each other,” she said on Tuesday. Summit Pacific CEO Renee Jensen is married to Tom Jensen, the CEO of Grays Harbor Community Hospital, who has been promoting the hospital’s bid to form a public district.

But, the finances of both facilities are tenuous.

“What might be OK today is very fragile,” Jensen said. “We need to think long-term and long-run for both facilities.”

Leaving Montesano out of the new hospital district means it could still be a potential tax revenue source for Summit Pacific in the future if residents agreed to be annexed.

That funding source could prove important down the road. Summit Pacific is a Critical Access Hospital, a designation for small, rural hospitals allowing them to access better reimbursement rates from Medicare and Medicaid. As recently as 2011, cuts to the Critical Access Hospital program have been proposed at the state level. Though the cuts never made it into the final budget, the funding has at times been a target of budget writers.

“SPMC is a very fragile organization dependent upon special reimbursement,” according to the document prepared by Summit Pacific. “This reimbursement has been and is threatened; at this point, if the special reimbursement was reduced, the additional tax revenues (from Montesano) could be the only thing that would save the services being provided.”

The document, titled “Impacts of Public Hospital District No. 2 including East County,” cited other reasons for careful consideration when it comes to Montesano:

• Summit Pacific is closer to the Montesano area, offering a 10-minute transport time from Montesano, as opposed to a 20-minute transport time to Community Hospital.

• In the past 12 months, Summit Pacific has provided about 1,510 emergency room visits for residents in the 98563 zip code, which includes Montesano, Brady and the Preacher’s Slough area, as well as the Wynooche Valley Road. Summit Pacific estimates that number accounts for more than half of the total emergency visits from that area in that time span. (Grays Harbor Community Hospital reported just more than 1,600 ER visits from the same area in the 2013 calendar year.)

Summit Pacific officials estimate that excluding the Montesano area will only cost the new hospital district about $250,000 in property tax revenue, possibly even less. And, removing Montesano might even improve the chances of passage for the measure to create the new district, the document contends.

Essentially, for Summit Pacific officials, the issue is which facility benefits most from the potential future tax revenue from Montesano.

“Prior to February 2014 (Community Hospital) had a plan to implement a bill that would access federal funding providing stability to their operations. At no time was becoming a (public hospital district) and collecting tax revenues part of their plan until it was essentially forced upon them,” the document stated, referring to the recently passed Sole Community Hospital law. “This clearly demonstrates GHCH had a strategic plan that did not rely on tax revenues.”


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