Hospital board will consider next move
A $72 million bond proposition to rebuild Three Rivers Hospital in Brewster fell short of the votes it needed to pass in the Nov. 7 election.
But the fact that over 43% of the voters supported the proposition is encouraging, said Scott Graham, Three Rivers chief executive officer.
“Obviously we’re disappointed with the outcome. But I’m heartened by the fact that we got 43% of the vote. We weren’t crushed. It felt validating to know we had the support that we did,” Graham said this week.
Voters in the hospital district, which includes portions of Okanogan and Douglas counties, turned down the bond proposal with 2,055 (43.43%) in favor and 2,677 (56.57%) opposed. The bond would need approval by 60% of voters to pass.
The hospital’s board of commissioners will be discussing the outcome of the election to determine if Three Rivers Hospital will try to win voter approval for the bond in a future election, Graham said.
“We knew that it was a big ask and we were hoping that it would go forward. A lot of hospitals that try to get this sort of initiative passed often have to do it two or three times. We were prepared that it might take more than one time,” Graham said.
The bond to rebuild the hospital would have been repaid through property taxes, with a levy rate of $1.39 per $1,000 assessed valuation. That would equal $695 per year for a home valued at $500,000.
Voters may have had “some sticker shock from the $72 million,” said Jennifer Best, business development coordinator at Three Rivers Hospital. “We totally understand that.”
If the hospital runs a bond proposition again, “it may look different than what we initially proposed, but it’s really too early to say,” Best said.
Three Rivers Hospital officials say the bond is needed to replace the 75-year-old hospital, which has been remodeled and retrofitted many times over the years. Consultants hired by the hospital concluded that the building can no longer be retrofitted to meet current medical standards, and replacing it with a new facility would be less expensive in the long term, hospital officials said.
The bond proposition has some residents of the hospital district questioning the wisdom of putting more money into what they call an “outdated” health care delivery system.
“I think it’s time to question our current model and engage in a comprehensive planning process for our county as a whole,” said Peter Morgan, a retired health care executive and Winthrop resident.
Okanogan County has three critical access hospitals — Three Rivers in Brewster, Mid-Valley in Omak, and North Valley in Tonasket — all approximately 30 minutes apart. A critical access hospital is a federal designation for hospitals that provide affordable and accessible health care in rural, often underserved areas.
“Our concern is that our current configuration of three critical access hospitals … is based on a 1950s model of care and needs to be revisited,” Morgan said in a letter to the Methow Valley News, co-authored by David Clement, a retired anesthesiologist.
Patients who might have been hospitalized 60 years ago are now treated as outpatients. Seriously ill patients who require specialized equipment and expertise are often stabilized at critical access hospitals and transported to larger hospitals, Morgan and Clement said.
“Many patients from Okanogan County travel to Wenatchee, Spokane or Seattle because none of our three hospitals treat enough patients to justify the scope of services we might have if they were coordinated or consolidated,” Morgan and Clement wrote.
The three area hospitals are competing for limited funding and patients, Morgan said in an interview after the election. Consolidating care in one hospital could allow expansion of services like surgery and orthopedics, “and maybe we could keep more care in the community” instead of requiring patients to be transferred to other hospitals. Morgan said.
“I think this hospital bond failure should be a kind of wake-up call to all three hospitals,” he said. “All of these hospital districts are going to face a lot of resistance from taxpayers if they are going to try to capitalize in this current environment.”
Morgan said draws from his experience as an executive vice president of Group Health Cooperative, which operated hospitals and clinics for 400,000 members statewide during his tenure. When enrollment began shrinking, Group Health was forced to close hospitals. “We were facing our own capitalization issues,” Morgan said.
A new model of health care delivery could address the need for urgent after-hours care in communities like the Methow Valley, which has no after-hours care, and could utilize newer technologies like telehealth, remote diagnostics and remote health care management, Morgan said.
“It looks like it’s going to be challenging to fund renovations and construction of hospitals,” he said. “My sense of what is needed is to get support for a county-wide planning grant … the missing piece is who leads it,” Morgan said.
“Those of us who opposed [the bond] feel some obligation … to look at this. It’s a question of the ‘how,’” he said.
The idea of consolidating hospitals in Okanogan County is not new, said Graham. “In my first week here as CEO nearly 10 years ago there was discussion on this with the Okanogan County Commission. I understand the argument.”
Graham said he served as CEO of both Three Rivers Hospital and North Valley Hospital for a couple of years. “Part of the idea was to reduce administrative burden and increase collaboration to be more streamlined and efficient,” he said.
Graham said the three hospitals continue to collaborate to provide health care efficiently, and he is open to discussions about how to improve health care delivery.
Consolidating public hospital districts, which are separate taxing entities, would be “a complex process” for a number of reasons, Graham said.
Critical access hospitals are small hospitals with 25 beds or fewer, that provide health care to underserved populations. Because they are intended to provide essential health care in rural areas, reimbursement rates through Medicare and Medicaid are more favorable for critical access hospitals than other types of hospitals, to reduce their financial vulnerability.
Consolidating hospitals might result in a different hospital designation and less favorable reimbursement rates, he said. “The cost-based reimbursement we get as a critical access hospital is most sustainable,” Graham said.
Critical access hospitals also benefit from being allowed to include capital improvement costs in allowable costs for determining Medicare reimbursement. That could “offset” some of the tax burden from a construction project, Graham said.
Consolidating the hospital districts would require a vote of the entire county, Graham said. “I’m not sure everybody is of one mind. It’s more palatable to communities to keep their hospitals.” The COVID pandemic, he said, showed that “having some redundancy in hospitals makes sense.”
Centralizing health care in one facility would increase travel time for some patients, which could be a burden for lower income residents who may have more difficulty traveling longer distances for medical care, Graham said. “Transportation has to be on the table.”
All three district hospitals in Okanogan County were built with federal funds in the 1940s, and have had to upgrade and modernize over the decades to accommodate changes in health care, Graham said. North Valley Hospital renovated in 2011 and Mid-Valley Hospital remodeled its emergency room about 10 years ago, Graham said. “We’re the last hospital to consider it,” he said.
If Three Rivers Hospital chooses to run the bond proposition again, the general election in November of 2024 would be a logical choice, Graham said.