April 20, 2008 in City

$100 million foundation hinges on hospitals’ sale

By The Spokesman-Review
 

A possible new $100 million foundation focused on Spokane health care needs is spurring hope among charitable organizations accustomed to scratching for dollars to pay for programs ranging from wellness to child abuse prevention.

The money would come from the sale of Deaconess Medical Center and Valley Hospital and Medical Center, a blockbuster proposal being scrutinized by state regulators. The buyer is Community Health Systems Inc., the nation’s largest for-profit hospital company with 130 medical centers in 28 states. If approved – perhaps by late summer or fall – the deal would reshape the health care business in Spokane.

There have been doubters, but the board of Empire Health Services, the parent organization of Deaconess and Valley hospitals, has called the sale a way to salvage the services offered for a century by the local organization. If the sale falls through, it could mean drastic cuts to services or even Empire Health’s bankruptcy.

Tempering criticism of the deal is the formation of what Empire says would be the largest philanthropic foundation in Spokane.

“People are excited about a foundation of that magnitude,” said Mike Senske, a businessman and board member of Empire Health Services.

He and fellow board member Judy Cole have fielded scores of inquiries from nonprofit agencies.

But until the foundation is formed and its independent board sets its course, no promises are being made, Senske said.

Cole said the mission of the foundation would be the delivery and betterment of health care

Deaconess has long served the uninsured, underinsured and disadvantaged. Community Health has committed to retaining that role even as it strives to turn a profit for shareholders.

The $100 million number is an expectation, Senske cautioned: “It could be subject to change.”

Nonprofits hope the new foundation has the same power as a South Carolina foundation established under similar circumstances.

In 1994, Community Health purchased Springs Memorial Hospital in Lancaster, S.C., for about $50 million. Springs was established by textile magnate Elliott White Springs to provide health care services in rural areas. And while it was established as a general hospital, it served many poor and disadvantaged.

Sale proceeds were plowed into the newly formed J. Marion Sims Foundation, named after Dr. James Marion Sims, a 19th-century physician who specialized in gynecology.

During the market boom of the late 1990s, the size of the foundation almost doubled, approaching $100 million.

It retreated during the 2000-01 market correction. Yet 14 years after its inception, the foundation has assets of $80 million and has given away more than $28 million, said Charles Bundy, who helped establish the foundation as part of his role on the hospital board.

“We knew we could not solve health care problems with $50 million,” Bundy said. “But that’s a lot of money to throw into a local community.”

The foundation set up a program through the local University of South Carolina campus to teach every fourth-grader in the area to swim after an alarming number of children there drowned.

The foundation also established a diabetes education campaign; helped pay for nursing science projects at the regional university; and launched an outreach project by converting an old school bus into a health education and information center that travels to rural areas.

It helped set up a free health care clinic for the indigent; funded a family strengthening program with middle schools; put money into a track club to encourage running and field events; helped pay for food-assistance programs; funded a leadership program for black men; and invested in a program to offset premature deaths from health disease and cancer.

On the periphery of its health care mission, the foundation also funded literacy programs for people with health problems who cannot read prescription drug labels or who have trouble communicating with doctors.

“It’s making a difference, I like to think,” Bundy said.

Infusing that sort of new charity funding in Spokane would be incredible, said Mary Ann Murphy, executive director of Partners with Families and Children: Spokane.

“There is need here, and that’s why everyone in the nonprofit community is excited about a new foundation,” Murphy said.

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