Orofino, Cottonwood hospitals to join with nearby Kootenai Health in effort to improve care

A pair of critical access hospitals in north-central Idaho – Clearwater Valley Hospital in Orofino and St. Mary’s Hospital in Cottonwood – will get what they’ve been seeking: a more local owner.

By 2020, Coeur d’Alene-based Kootenai Health plans to take ownership of both facilities from Essentia Health, a Minnesota-based nonprofit health care provider.

In February, with Essentia’s blessing, the two hospitals issued a request for proposal to seek a new owner located nearby. Kootenai Health won that bid, and the process of turning ownership over to the health care provider with locations in Idaho, Eastern Washington and Montana has begun. This month, all parties signed a letter of intent to transfer ownership.

Both Clearwater Valley and St. Mary’s hospitals will remain critical access hospitals, a designation made at the federal level that insulates rural providers from financial hardships, with their joint board governing them. Currently, an Essentia board member with reserved powers for debt, expenses over $50,000 and branding also sits on the board. A Kootenai Health representative will replace that member as a result of the changeover.

The transfer of ownership for nominal consideration is attached to a small transaction fee, estimated to be a penny or a dollar, said Jeremy Evans, executive vice president of regional operations at Kootenai Health, but there is no outright price for the transfer.

“The idea here is just as those two hospitals (currently) operate fairly independently from Essentia, they will maintain their current local community boards, local leadership, medical staff, employees and critical access status,” he said.

The hospitals, both nonprofits, will continue to operate at a local level. The details of the final ownership agreement, which ideally will be in place by Jan. 1, have yet to be determined.

Lenne Bonner, CEO of St. Mary’s and Clearwater Valley hospitals, said the partnership with Kootenai Health makes sense with the North Idaho provider’s proximity to their hospitals. With Essentia based in Duluth, Minnesota, it was difficult to benefit from the ownership due to the distance, she said.

“Because we were so far away from Essentia, we weren’t a part of a lot of their systems,” Bonner said.

With Kootenai Health as the new owner, there are opportunities for the two hospitals to tap into some of their information technology integration and patient records management systems, and to more seamlessly refer patients who need higher levels of care.

Details about exactly what resources will be shared or used are still being worked out.

Clearwater Valley and St. Mary’s both have emergency departments, surgical and childbirth services, and other inpatient care. The hospitals also operate primary care clinics in their three-county region, which includes Idaho, Lewis and Clearwater counties.

Bonner said the CVHC and SMH system serves about 30,000 patients, and some of them already drive an hour or two to access care. She is excited about the continuity of care that patients could see as a result of the new ownership.

“My goal is to make sure these two hospitals can maintain their financial stability. We’re really rural,” she said. “I think we will be able to offer more services through (Kootenai Health) with specialists, and they will hopefully be able to support us in doing that.”

The two hospitals continue to operate under ethical and religious directives for Catholic health care, as directed by the U.S. Conference of Catholic Bishops, after they formed a partnership in 1998, with Essentia as the owner.

Kootenai Health will continue to abide by those religious directives, to the extent permitted by law and regulations, the letter of intent says. Bonner said the Duluth Benedictine Sisters will continue to be the sponsoring agency for St. Mary’s Hospital going forward.

Bonner said the hub-and-spoke model of integrating patient care will be effective with Kootenai Health, where they would sometimes send patients for higher-level care or acute treatment in the past.

Kootenai Health, which has continued to expand in recent years, is the largest health care provider in North Idaho, and this recent announcement builds on that growth.

“Our vision and our objective in our relationships with various critical access hospitals is to offer our strength, our resources and our expertise to ensure access to high quality care in the outlying communities,” Evans said.

By partnering with Kootenai Health, patients at St. Mary’s and Clearwater Valley could have stronger continuity of care, Evans said, not just in the referral process but in follow-ups.

“How do we ensure providers in outlying communities and our providers are communicating and developing pathways and transitions to ensure the best continuity of care from local communities?” he said. “That’s a tremendous opportunity for us.”