During a recent special meeting to review management proposals for Sitka Community Hospital, the Assembly chose to advance all of them to the next round. And they threw in a caveat: In order to advance, the applicant has to make their proposal public. The vote came in response to the public’s demand for greater transparency.
There’s a numerical symmetry to this story: Five committee members reviewed five proposals to manage Sitka Community Hospital. And Tuesday night, with the absence of assembly members Bob Potrzuski and Aaron Bean, it was up to five Assembly members to decide what to do next.
Potrzuski had penned a letter, read by City Clerk Sara Peterson, explaining he was out of town celebrating his mother’s 90th birthday and capturing the emotions of this decision for many.
“I continue to struggle with the Sitka Community Hospital issue, lying awake as recently as Sunday night at 2 a.m. working through all the facets of this conundrum,” Peterson said, reading Potrzuski’s letter.
Indeed, there are many facets. Steve Hartford, the hospital’s director of operations, said he personally wanted the Assembly to postpone their decision altogether and give the hospital two more years of independence.
“We are growing the number of Sitkans we serve and our bottom line. At the end of April, we had more than $3.5 million in the bank. May was our highest patient revenue month in the 60 year history of the hospital,” Hartford said.
There’s major administrative changes too: a search for a new CEO to replace Rob Allen (whose contract ends in mid-October), the implementation of a new electronic health records system, and the hire of a new surgeon.
But the Assembly did not consider that idea and instead, moved forward with exploring who else could manage the city-owned hospital. One year ago, SEARHC made an offer to merge. Then, hotel proprietor Rob Petrie said he was interested in buying Sitka Community so it could continue to compete with SEARHC.
The Assembly pumped the brakes and issued a request for proposal (RFP), calling for anyone to submit a management idea. They hired a pair of consultants – Sarah Cave and Steve Huebner – to facilitate the process. Five healthcare entities submitted by the May 18th deadline.
The applicants are (1) the Southeast Alaska Regional Health Consortium (SEARHC), (2) Quorum Health Resources LLC, a hospital company headquartered in Tennessee, (3) RHHC HealthCare Partners in affiliation with UW Medicine in Seattle, (4) Alaska Regional Hospital based in Anchorage, and (5) Sitka Jet Center, the business of Rob Petrie.
See how the proposals scored and Cave and Huebner’s presentation to the Assembly here: 2018-06-05 REVISED special meeting SCH RFP
While the Assembly has read all the proposals, attorney Michael Gatti suggested they not be made public. Assembly member Richard Wein asked why during the special meeting on Tuesday.
Wein: Is a suggestion or is it law?
Gatti: This is my advice. And this is based upon case law, Dr. Wein that treats public procurement as a quasi-judicial process.
Meaning, that the courts have historically favored that competitive proposals of this kind not be released to the public. Wein said such a judgement runs counter to the Assembly’s promise to inform citizens of the choices before them.
“How can meaningful comment be obtained when no one knows what the proposals are? Having reviewed the proposals, there is certainly no proprietary information in them,” Wein said.
Assembly member Steven Eisenbeisz agreed. He made a motion, seconded by Wein, that in order for a proposal to move forward, it had to be made public.
“I want [the healthcare provider] to be as inviting to the community as hopefully the community, in the end, will be to them,” Eisenbeisz explained.
Community involvement and full disclosure is exactly what the over a dozen citizens that testified wanted to see more of. Karen Lucas wondered if the applicants could work out some cooperative agreement from each other.
For instance, Cave and Huebner explained that RCCH’s plan is contingent on UW purchasing another hospital in Alaska (Cave would not disclose which hospital). The evaluation committee didn’t like that contingency and recommended RCCH’s proposal not advance. The committee includes Cave, Huebner, city administrator Keith Brady, hospital board president Connie Sipe and Chief of Staff Dr. Kimberly Bakkes.
Lucas, however, wondered if a creative solution could be had among the current applicant pool.
“I’m thinking about Alaska Regional Hospital with UW, if all they need is a hospital. We have the opportunity to be a really cool hub for healthcare in Southeast, Alaska. I’m not against SEARHC, but I am against monopolies,” Lucas said.
Considering that idea, Gatti said “typically, you don’t invite the competitors to collaborate with each other.”
The Assembly, however, did heed the public’s call for transparency. They advanced all five proposals to Phase 2, under the stipulation that the proposal be made public. That means, in order to stay in the running, SEARHC, Quorum Health Resources, RCCH in partnership with UW, Alaska Regional Hospital, and Sitka Jet Center will make site visits July 11th and 12th. Their expanded proposals are due July 27th.
