Hospitals spar anew over beds, facilities

Deaconess Medical Center is continuing its efforts to derail expansion plans of Providence Sacred Heart Medical Center, this time telling state hospital regulators that even a scaled-back expansion is unnecessary.

Part of its new reasoning is that Rockwood Clinic patients, who have historically gone to Sacred Heart, are now being sent to Deaconess.

“Sacred Heart’s project is, at its core, an attempt to thwart the ongoing efforts to restore the vitality of Deaconess and Valley (Hospital and Medical Center),” wrote William Gilbert and Dennis Barts, the chief executives of Deaconess and Valley, in a letter to state regulators. “Both of our respective institutions have underused capacity and both are available and accessible.”

Sacred Heart has contended that it needs 75 additional beds to care for a growing number of patients seeking emergency and specialized treatment. The hospital initially sought 152 new adult beds as part of a multiyear, $175 million construction project.

Officials with the Washington State Department of Health’s Certificate of Need program twice rejected the larger plans.

Sacred Heart appealed and eventually reached a settlement with regulators to add 75 more beds at an estimated cost of about $54 million, including 25 beds relocated from jointly managed Providence Holy Family Hospital.

The dispute is among several that have sharpened the rivalry between the Providence hospitals and Deaconess and Valley hospitals. Community Health Systems Inc., based in Franklin, Tenn., bought Deaconess and Valley hospitals 19 months ago.

In objecting to the settlement, Deaconess executives noted that its recent affiliation with Rockwood Clinic, the region’s largest multispecialty practice, is bringing more patients to Deaconess at the expense of Sacred Heart.

Internal Rockwood documents showed that by the end of March, the clinic’s 133 physicians were sending about 40 percent of patients to Deaconess. That’s an about-face from past practice, when Rockwood sent more than 90 percent of its patients to Sacred Heart.

“Clearly the referral pattern is changing and will substantially mitigate any patient census pressure at Sacred Heart,” according to Deaconess.

Sacred Heart disputed the assertion that its patient numbers would slide.

“The demand for the critical care we provide the people of Eastern Washington has never been stronger,” said Sacred Heart spokeswoman Sharon Fairchild.

She said that even though Rockwood physicians are being forced to refer patients to Deaconess, “other physicians in the region are choosing Sacred Heart and filling its beds with increased referrals.”

In a rebuttal of CHS’ claims filed with the state Wednesday, Sacred Heart questioned whether CHS would continue offering major services at its hospitals. In particular, Sacred Heart noted how CHS dropped its trauma care service.

“By opposing the settlement, CHS is asking the (Department of Health) to trust that CHS alone will meet the incremental growth in patient needs in Spokane for the next decade,” Sacred Heart wrote. “CHS in effect asks the Department to place a bet that a for-profit hospital system, controlled in Tennessee and whose shares are traded on the New York Stock Exchange, will be a reliable substitute to the not-for-profit hospitals that have served Spokane for generations.”

The intensified fight for patients follows a decade of decline at Deaconess. It lost 4 percent of its market share to Sacred Heart, which was able to leverage its size and specialties to a dominant position among local hospitals.

CHS’ maneuver to win those patients back and ensure the region has a second viable hospital system has created rifts between the once-friendly rivals.

Many in the medical and business community welcome the stronger competition but find the fighting worrisome.

This week lawyers for Deaconess and Valley asked that high-profile endorsements of the settlement be stricken.

Letters in support of the settlement were written by Spokane Mayor Mary Verner; Gary Livingston, chancellor of Community Colleges of Spokane; Rich Hadley, chief executive of Greater Spokane Inc.; Brian Pitcher, chancellor of Washington State University Spokane; and several local physicians.

Deaconess spokeswoman Christine Varela called the objections a procedural matter.

She noted that endorsements were supposed to be made during the initial public comment phase last year, not during this late juncture of the appeals process.

“We do sincerely value the opinions” of our community and business leaders, Varela said, “but this is not the proper place.”

In her letter, Verner noted Sacred Heart’s status as Eastern Washington’s only major trauma center.

All the letters adhered to that theme.

The Department of Health will issue a decision on the settlement next month, officials have said.