Deaconess, Valley hospitals buyer: ‘We’re committed to it being a good thing for Spokane’

The future owners of Rockwood Clinic, Deaconess and Valley hospitals were in town Friday and Saturday to talk about what the sale will mean for the Spokane area.

Executives from Tacoma-based MultiCare Health Systems met with Rockwood Health System’s management and rank-and-file workers.

“We’re committed to it being a good thing for Spokane. That’s the journey – for us to make sure it’s outstanding for the Spokane region,” Bill Robertson, MultiCare’s president and chief executive, said in an interview with The Spokesman-Review.

The $425 million sale of Rockwood Health Systems was announced Thursday evening. MultiCare, a secular nonprofit, operates five hospitals and more than 130 clinics in the South Puget Sound region. The sale is expected to close in spring 2017, pending state regulatory approval.

Rockwood’s current owner is Tennessee-based Community Health Systems, one of the nation’s larger for-profit hospital owners. The company announced in September it would sell some hospitals and clinics to pay down debt amid a rocky financial performance.

Rockwood Health employs about 3,500 people at the two hospitals and affiliated clinics. As part of the purchase offer, all employees in good standing at the time of the sale will keep their jobs.

Spokane City Council President Ben Stuckart applauded the move to return Rockwood Health to nonprofit ownership. “The more profit we take out of health care, the better off we’ll all be,” he said.

Providence Health Care, which operates competing hospitals and clinics in the Spokane area, issued a congratulatory statement Friday.

“Having two healthcare systems in a city this size is a good thing. We at Providence Health Care look forward to a new provider that will engage with us in improving the health of our community,” said Elaine Couture, Providence’s chief executive for Eastern Washington and Montana.

Rockwood Health’s employees received the news of the pending sale about 5 p.m. Thursday, said Tami O’Marro, a registered nurse who’s worked at Valley Hospital for 26 years. There had been rumors all week, she said, but the news still came as something of a surprise.

However, “we’re happy that we’re being sold to a hospital system in Washington state versus Tennessee,” she said. “We’re thrilled to know it’s a nonprofit.”

Employees at Valley and Deaconess hospitals began negotiations on a new contract with Community Health Systems in July.

“We’re looking forward to negotiations with MultiCare so we can sign a contract,” O’Marro said.

Unions offer differing views

on MultiCare

Unions that represent workers at MultiCare hospitals offer starkly differing views on MultiCare as an employer.

The Washington State Nurses Association, which represents nurses at MultiCare’s Tacoma General Hospital, is in a labor dispute over what the union describes as chronic understaffing and unsafe working conditions at the hospital. Federal mediators have been called in.

Christine Himmelsbach, the association’s assistant executive director, issued a statement Friday critical of the Rockwood Health purchase.

“The timing of MultiCare’s announcement of the purchase of hospitals and clinics in Spokane is appalling given the problems at Tacoma General Hospital, where the staffing situation and nurse working conditions are flat-out unsafe for the nurses and their patients,” she said.

Another union gives MultiCare high marks.

“They are exemplary employers and a great partner for us in providing quality care for our patients,” said Diane Sosne, president of SEIU Healthcare 1199NW, which represents 28,000 nurses and other health care workers in Washington.

MultiCare led successful turnarounds at struggling Washington hospitals in Auburn and Puyallup, investing heavily in capital projects and new programs, Sosne said.

MultiCare spent about $200 million on Auburn Medical Center after the 2012 purchase, according to company officials. MultiCare invested $450 million in a new patient tower after acquiring Good Samaritan Hospital in Puyallup a decade ago. The company also started a new inpatient rehabilitation program there.

SEIU represents health care employees at Auburn Medical Center and Good Samaritan Hospital, as well as Deaconess and Valley hospitals.

MultiCare “respects the front-line staff” and works with employees to solve problems, Sosne said. The nonprofit company is also active in the communities where it has hospitals and clinics, she said.

“There have been very rocky times for Deaconess and Valley hospitals,” Sosne said. “Having MultiCare come in is an opportunity to stabilize and further the services that Spokane and the Valley community need, both in inpatient and outpatient care.”

MultiCare has sights on Pacific NW expansion

MultiCare wants to expand in the Pacific Northwest, and Rockwood Health represents the kind of organization it finds attractive, Robertson said.

The Rockwood purchase will make MultiCare one of the larger, secular nonprofit health-delivery systems in the state, he said. After the two organizations merge, MultiCare will have more than 13,500 employees working at seven hospitals and more than 160 clinics. MultiCare’s annual revenues before the purchase are in the $2 billion range.

However, Catholic-affiliated Providence Health still dwarfs MultiCare in size. Providence Health had $6.1 billion in net patient revenues in Washington last year. More than 38,000 people work at Providence Health’s 14 acute care and affiliated hospitals and 230 clinics in the state.

MultiCare plans to fund the Rockwood Health purchase through cash reserves and loans, Executive Vice President Florence Chang said.

The nonprofit’s first objective in Spokane is to find out “how to better serve people in that community,” Chang said, “putting the right teams in place to run the hospital, connect with the community and drive better outcomes.”

The MultiCare team is just beginning to evaluate what the Spokane hospitals and clinics need, but Robertson said one certainty is that the nonprofit will spend $25 million on a new electronic health records system, EPIC. It’s the same system in use at the local Providence hospitals, so individuals will be able to have their records available wherever they go. That initiative will take about a year, Robertson said.

The sale of Rockwood Health System will end Community Health Systems’ relatively short, but influential, time in Spokane.

The Tennessee for-profit purchased Deaconess and Valley hospitals for $156 million in 2008, later spending $114 million on new equipment and building projects. The company bought Rockwood Clinic for $50 million in 2009.

Community Health Systems transformed health care delivery in the greater Spokane area, creating a formal network that channeled patients from CHS-owned clinics into CHS-owned hospitals. Before the purchase, most Rockwood Clinic patients had their surgeries at Providence-owned hospitals.

But Community Health Systems announced this fall that it would sell some of its 200-plus hospitals and related clinics to reduce debt and finance new projects in its most profitable markets.

Staff editor Addy Hatch and reporter Kip Hill contributed to this report.