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Sale puts focus on INHS future

As the likely sale of Empire Health Services grows near, Eastern Washington’s competing hospital systems are starting to stake out positions over the future of their most successful joint venture: Inland Northwest Health Services.

Providence Health & Services, the parent company of Sacred Heart Medical Center, is interested in buying Empire’s share of the nonprofit best known for groundbreaking advances in medical information technology, an official said this week.

“We would be happy to acquire it in total,” said Ryland “Skip” Davis, chief executive of Providence Strategic Ventures, an affiliated organization.

But an Empire representative said Friday that the company wants to continue joint operation of the venture that has more than 1,000 employees and projected revenues of $126 million this year – even after a pending sale to Community Health Systems Inc.

“If one hospital entity owned it, would it be in the spirit of what’s best for this community?” asked Ron McKay, who chairs boards of both Empire and INHS. “We’re not interested in selling our share. It doesn’t make sense in the context of INHS.”

INHS was formed in 1994 when Empire and Providence agreed to merge competing business lines, including Northwest MedStar, an air ambulance service. Since then, the organization has launched several joint services, including St. Luke’s Rehabilitation Institute and programs that focus on medical information technology, education and referrals.

Officials from the two systems have had only limited “sidebar” discussions about the future of INHS, McKay said.

Davis said he believed that INHS assets were segregated from the pending sale of Empire to CHS, the nation’s largest for-profit hospital system. If Providence were to acquire Empire’s share of the venture, the proceeds from the sale would be directed to a nonprofit community foundation, Davis said.

Confirmation about the future of INHS will have to wait for the announcement of a final sale to CHS, McKay said.

“INHS is a community asset and our interest is that it continue going forward,” he said. “The whole plan is for it to continue as a shared venture.”

Announcement of a final sale to CHS is expected within weeks, McKay has said. When it comes, it will trigger the start of a months-long review required by Washington state’s hospital conversion law. The law is designed to protect community assets when a nonprofit hospital system is acquired by a for-profit buyer. Under the law, proceeds from the sale must be directed to a community foundation and used for purposes determined by a public process.

Davis emphasized the need for community members to pay attention to the decisions that will create a foundation that could enhance health care for the entire region.

“To say it bluntly, this is anything but a rubber stamp. The attorney general’s office has a specific obligation to protect the public’s interest,” he said. “But the important thing is, it’s only as good as the quality of the input provided through the public oversight process.”