The mission statement for Sitka Community Hospital posted in the waiting room. The hospital is hiring a new CEO and and implementing a new electronic billing system, but its overall future hangs in the balance. The Asssembly will vote next week on whether to give the management of the hospital to another party. (Emily Kwong/KCAW photo)

The future of Sitka Community Hospital could very well be decided in August, after a months-long process seeking bids for outside management. While the Assembly has a good sense of the offers on the table, less is known about what the economic impact of closing or selling Sitka Community Hospital could be. The Assembly debated that question Friday night (08-17-18), but ultimately did not take action to answer it now.

Tonight at 6 p.m., the City will host a town hall to gather community input on the three organizations who have made an offer to manage Sitka Community Hospital: SEARHC, Quorum Health Resources, and Sitka Jet Center. Attendees will be broken into small groups and then the floor opened for a public forum. Raven News has a live stream of that meeting here

Downloadable audio.

The idea for an economic impact analysis came from the people, specifically the board members of the Southeast Economic Development Association.

SEDA would hire a third-party to produce the analysis, which would take an estimated 90 days to complete. Executive director Garry White said the goal would be to answer a tough, yet important question. “What’s at stake here? What’s at stake if the proposal doesn’t really come to fruition?,” White said.

Meaning, what would happen if Sitka Community Hospital’s new management didn’t deliver on their promises? What would it do to jobs? The economy?

Mayor Matthew Hunter did the math. He estimated the hospital supported 200 jobs, including service contracts. He spoke to the $35 million state pension obligation and the immeasurable legacy of the hospital, offering Sitkans a choice in healthcare. He concluded by saying he didn’t need a third-party study to tell him what’s at stake.

“It’s going to tell us Sitka Community Hospital is a critical part of our economy. And it’s going to cost maybe $50,000 to do a study that’s going to tell us that it’s a critical part of our economy,” Hunter said.

The bigger question, he felt, is how to keep the doors of Sitka Community Hospital open and retain as many of those jobs as possible. “Either we go forward with the SEARHC proposal or we make Sitka Community so sustainable, so supported, that it can operate well and comfortably and we don’t have to ever worry about it going belly up,” Hunter said.

This sparked another conversation about revenue sources for the hospital. Assembly member Aaron Bean floated the idea of a ballot question, raising property taxes by 2 mills for hospital operations. No one on the Assembly made a motion on that idea, some speculating it would not pass with voters.

Instead, many citizens in attendance wanted the Assembly to delay awarding an RFP until an economic impact analysis could be done.

Assembly member Richard Wein said the information was a key piece of the conversation. “How will this effect Sitka needs to be known, so in negotiations we can potentially mitigate. ‘This is the money you’re going to offer us, but what is the trade off?’,” Wein said, calling in over the phone.

Hunter considered that idea. If the current Assembly awards an RFP to this month, he noted the next Assembly could potentially pursue a study in the middle of negotiations with SEARHC or Quorum – a six to nine months window.

“Say [an economic impact analysis] comes 90 days in. That’s halfway through our due diligence and negotiation process,” Hunter said. “The next Assembly, or negotiators on the city side, could use that information to try to mitigate any negative impacts. And I think that’s a good idea.”

The issue seemed resolved, the Assembly noting that the question of economic impact could be answered during negotiations. No one made a motion to pursue an economic impact analysis now.

This upset some hospital stakeholders in the room, like Dr. Marilyn Corruzi, who said the whole process felt manipulative. “The fact that you’re refusing to do this and then this town hall meeting is so contrived, is very frustrating. Very frustrating,” Corruzi said.

Citizens like Corruzi also implored the Assembly to give the hospital time to hire a new CEO as Rob Allen steps down in mid-October. But the Assembly seemed firm in their Phase 3 timeline, intending to award an RFP this month. Should the Assembly do so, the City and selected proposer will enter negotiations.

Hospital board president Connie Sipe told the Sitka Assembly last week they’ve interviewed five candidates. They have their finalists. But the whole process is on pause until the Assembly takes their first vote on the RFPs before them on August 28th. Raven Radio will broadcast that meeting live at 6 p.m.   

A slide describing Phase 3 of the process, from a presentation by consultants Sarah Cave and Steven Huebner. The Assembly has reviewed the final proposals and could select an affiliate next week.