During Monday’s work session, Sitka Assembly members elaborated on several goals for the future of local healthcare. They then voted – fixing green stickers to the paper – on their top priorities. (Emily Kwong/KCAW photo)
Sitka Community Hospital will have interested affiliates knocking on its door next month. The Sitka Assembly is requesting outside proposals for affiliation, merger, or other management ideas.
Three entities have expressed interest in submitting a management proposal for Sitka’s city-owned hospital: the Southeast Alaska Regional Health Consortium (SEARHC), which proposed merging last year, Quorum Health Resources LLC, a hospital company headquartered in Tennessee, and UW Medicine in Seattle and its affiliate RHHC HealthCare Partners. The deadline to propose is May 18th.
Steve Huebner and Sarah Cave came up to Sitka from Washington for a three day site visit this week. Their goal? To select an affiliation partner for Sitka Community Hospital by the end of the summer.
During a work session with the Sitka Assembly Monday night (04-16-18), Huebner echoed the words of previous consultants: that while Sitka Community has improved cash flow and can meet its short-term needs, it is not sustainable in the long run as a standalone operation.
Huebner described the hospital’s balance sheet as “somewhat vulnerable.” He told the Assembly, “The good thing is you’re headed in the right direction. The challenge is you don’t have a lot of room for leeway if anything heads in the other direction.”
Huebner’s message to the Assembly was that in coming to an agreement with an outside entity now, the City of Sitka can negotiate from a position of strength.
Of the twelve organizations that were sent the Assembly’s request for proposal, or RFP, three signaled their “intent to respond” by the Monday’s noon deadline.
They are the Southeast Alaska Regional Health Consortium (SEARHC), Quorum Health Resources LLC, and the collaborative entity of UW Medicine and RCCH HealthCare Partners. Cave and Huebner are also in back-and-forth dialogue with Anchorage Regional Hospital to gauge their interest.
Not on the list is Rob Petrie, the proprietor of the Sitka Hotel Rob Petrie, who voiced interest in buying the city-owned hospital last summer. “[Petrie] has some level of interest, but we have not had any direct interaction with him at this point,” said Cave to KCAW after the meeting.
Any organization that intends to submit a proposal for Sitka Community Hospital has until May 18th to do so. Read the city’s request for proposal here: RFP Document
Huebner and Cave are somewhat like headhunters, but for healthcare. Hired for up to $100,000 to oversee this process, the consultants will now support these interested parties in crafting their proposals.
In gathering feedback directly from the Assembly, the top goal of the five Assembly members in attendance was to mitigate current and future liabilities to the City and Borough of Sitka. Assembly members Steven Eisenbeisz and Aaron Bean were absent.
Assembly member Richard Wein said that whoever responds to the RFP must account for the $35 million owed to the station pension system (known as PERS) over the next two decades.
“As you balance that [liability] against Sitka’s finances, it becomes five or six ‘verys’ in the very, very important zone. Therefore the ideal solution is to keep Sitka Community going, so through ongoing operations they can cover the PERS,” Wein said.
Assembly members also favored an affiliate with a capital budget vision and the ability to increase the quality and scope of healthcare in Sitka, while recognizing the limitations of service on an island.
Wein preferred a willingness of the applicant to partner with the City of Sitka in the governance of the hospital. While recognizing the importance of local input, Assembly member Kevin Knox added that some on the Sitka Assembly would like to see the city exit the healthcare industry altogether.
Mayor Matthew Hunter drove that point home even further. He commented, “It hasn’t been healthy for the hospital to have this uncertainty. I recognize that. It would be nice if we could get it out of politics and have people who know how to run hospitals run the hospital.”
Since Eisenbeisz and Bean were absent, the consultants plan to reach out to them individually through City Attorney Brian Hanson. They also want to meet separately with Wein, who was a surgeon previously employed at both Sitka Community and SEARHC’s Mt. Edgecumbe Hospital.
“The consultants have some questions for Dr. Wein because of his particular connection to the hospitals in town,” said Hanson to the other Assembly members. “They’d prefer a little bit of time here after this meeting to ask him some questions.”
Selected proposers will be announced on June 6th. With site visits and oral presentations planned this summer, the preferred proposal is scheduled to be chosen on August 28th.
