Spokane Journal of Business

Six Providence hospitals move closer to joining

New governance structure could be in place by May if final plan is OK’d

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Sacred Heart Medical Center, St. Marys Hospital in Walla Walla, and the network that operates Holy Family Hospital and three smaller hospitals north of Spokane are closer to joining into a single integrated network after six months of investigating the issue.

A task force assigned to look into joining the six institutions, all of which fall under the umbrella of Providence Services, of Spokane, has come up with a definitive plan thats now being discussed by the various hospital boards, medical staff, and other employees, says Ryland Skip Davis, Sacred Hearts CEO. The plan is expected to be refined and then voted on by the hospitals boards within the next several months, he says.

If its adopted, a new, consolidated governance structure for the group of hospitals could be in place perhaps by May; then, operational changes would be made through at least the rest of 1998, he says.

This is a vision to realign Providence Services for the future, Davis says. It would provide a more coordinated approach in Eastern Washington.

Providence Services announced plans to look into joining Sacred Heart and the Dominican Network, which oversees Holy Family and hospitals in Deer Park, Chewelah, and Colville, in February. Since then, Providence Services has decided to include the Walla Walla hospital in its discussions. The task force began its work in May.

Besides the six hospitals, the proposed joint system would include other Providence Services health-care operations in Eastern Washington, such as the Visiting Nurses Association.

Ron Schurra, president of Dominican Network, says the four hospitals that make up the Dominican Network already have gone through the process of becoming a larger organization when Dominican joined those hospitals. We know it works; we know there are advantages, he says.

Although Dominicans board still wants more information, he says, we have a draft, and we think its a good one. Its what I think would be the right thing to do.

Rich Umbdenstock, president and CEO of Providence Services, wont speculate on whether the plan will be adopted, but says the general reaction is favorable. He says Providence Services would hope to achieve two major objectives by creating such a network:

To organize the health-care providers into more of a system. He says individually the various hospitals provide a fine level of care, but dont necessarily provide coordinated care between the institutions. There are too many gaps for patients and their records to fall through, he says.

To manage its resources better, which means not doubling up or tripling up on some support services.No savings estimatesProvidence Services hasnt estimated how much money it could save by joining the various institutions. Umbdenstock says the organization wont find massive redundancies or massive cost savings, but even modest savings would help in the current era of tighter budgets in the health-care industry.

Cutting costs is critical these days, says Sacred Hearts Davis. For instance, even if Sacred Heart does the same level of business during the next five years, it will be faced with a projected $18 million reduction in revenues because of reduced Medicare payments approved by Congress earlier this year.

A new integrated system would include common human-resources policies, administrative direction, fiscal reporting, and strategic planning, Davis says. Back-room functions, such as purchasing and billing, would be consolidated, and a single computer system would link the hospitals, he says.

Umbdenstock stresses that consolidation wouldnt mean closing any hospitals or limiting basic care at smaller institutions. Were not interested in making routine services less accessible, he says.

Providence Services wants to make a better system, which should help it be more competitive, Umbdenstock says.

Dominicans Schurra says the patient would receive the biggest benefit if the hospitals combined. Such a system would allow patients to move between institutions easily, and also would improve communications among physicians and others at different institutions, while freeing up dollars to enhance patient care, he contends.

  • Marlene Mehlhaff

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