With the letter cancelled, both hospitals are free to negotiate with outside entities. The Sitka Community Hospital Board determined this was in their best interest, as they prepare to submit a plan for continued operation to the Sitka Assembly. SEARHC has offered a competing proposal for merger. (Emily Kwong/KCAW photo)
Sitka Community Hospital has cancelled its letter of intent to combine operations with SEARHC. The board made that decision at their meeting on June 22nd, tying up a loose procedural end and dissolving any future affiliation with the hospital across the bridge. Hospital leadership also recommends the board maintain the obstetrics and surgery programs until an outside consultant weighs in.
The findings of the consultant, Stroudwater Associates, will be folded into the hospital’s long term management plan and presented to the Sitka Assembly on Thursday, July 13th at 6 p.m. The Assembly will also hold a town hall meeting on the future of healthcare in Sitka on Monday, July 17th at 6 p.m. and a special meeting on the both hospitals’ proposals on Tuesday, July 18th at 6 p.m. Raven Radio will broadcast all three meetings live from Harrigan Centennial Hall.
When the letter of intent was signed in December of last year, it opened the door for a proposed affiliation between Sitka’s two hospitals. The talks, which began in a spirit of collaboration, soured in January. SEARHC has since offered to purchase Sitka Community Hospital for $6.5 million dollars upfront. Bryan Bertacchi, Sitka Community Hospital’s board chair, argued that renders the letter somewhat moot.
“We were given a mission to study a collaboration, which was penciled in this agreement. I think we clearly completed that mission and SEARHC has made an offer. I think there’s nothing wrong with us pursuing our business,” Bertacchi told the board. “Other alternatives could include management by another party.”
And the letter, as written, doesn’t allow for that. Section 2.2 requires the two hospitals to deal with each other exclusively and forbids the Assembly from considering offers from outside parties. For that alone, Assembly member Steven Eisenbeisz requested the board cancel the letter too.
“It only frees up my options and my ability to talk to potential other bidders or not talk if they don’t appear. So I am requesting that it be done as one Assembly member, but I am not speaking for the full Assembly,” Eisenbeisz said.
The board was swayed. Board secretary Connie Sipe crafted the motion, adding, “We are doing this so that the hospital can continue its business, without any intent to in any way prejudice or affect the discussions between the Assembly and SEARHC.” The board passed the motion unanimously and in doing so, gave the hospital more wiggle room as it carves out a financial future for itself.
In an e-mail to KCAW, SEARHC CEO Charles Clement said the cancellation of the letter does not affect SEARHC’s interest in purchasing Sitka Community Hospital. He wrote, “I think we are just focused on our proposal and if things change, we will of course make the corresponding adjustments.”
It’s a bit of a wait-and-see game: wait and see what the Assembly will do, and wait and see what Sitka Community Hospital proposes for its long-term management. Though the budget as written phases out the obstetrics program and reduces surgical coverage to half time, CEO Rob Allen is now recommending that the board keep those programs going.
While the board didn’t vote on that recommendation – which would require a budget amendment – Allen said he’d like to maintain the status quo and that if anything were to change, the obstetrics program would be phased out gradually.
“My recommendation would be that if we decide to stop doing labor and delivery – and this was based upon a lot of feedback from providers and patients and staff – was that we give seven months notice before we make a big change like that,” Allen said.
But in the meantime, they’re looking at alternative models. Could, for instance, their family practitioners deliver babies at SEARHC? Could the hospital get a birth center up and running? There are no practicing midwives in Sitka, but definite community interest in the idea. Last month, the hospital heard a presentation from the Juneau Family Health and Birth Center Director Madi Nolan Grimes to learn more about the model.
Sipe likes the option – she used a midwife herself – but isn’t sold on the feasibility of the business. Sitka Community Hospital delivers around 40 babies a year and SEARHC around 60.
“You’ve still got only a limited number of births in Sitka. You got a town that’s aging rapidly and is going to have a lower and lower birth rate because of the aging difference. Whether or not a birthing center for us – or an independent midwifery birthing center can financially make it on the number of births – would need to have some business model work done, on calculating it out,” Sipe said.
With the birth center idea still in its infancy, the hospital has hired Stroudwater Associates, an outside healthcare consultant, to review the operation from the ground up. Stroudwater’s report will recommend what should be cut, what should be kept, and how much city support is truly needed to keep the hospital going.
