Valley Hospital enjoys financial success while expanding

As health care careens between pending reforms and soaring costs, Valley Hospital has quietly succeeded.

It is the smallest of the city’s four main hospitals, an outpost that has often struggled to convince people in Spokane Valley and the surrounding area that it can meet most medical needs ranging from delivering babies and replacing worn-out knees, to setting broken bones and treating cancer.

In the nearly four years since Valley and Deaconess were purchased by Community Health Systems Inc., the hospital along East Mission Avenue has hired 150 new employees to care for a growing number of patients – an employment plus during difficult financial times.

Dennis Barts, the affable chief executive who has been leading the hospital for the past few years, said the hospital now cares for about 70 patients every day. That’s double the numbers from four years ago when the number of patients at Valley had slid to about 30 amid rumors that the hospital was in tough financial straits and could be closed or severed from its close affiliation with Deaconess.

Barts has met with 600 business, education, government and community leaders during its resurgence. He shares information and answers questions about the goals and mission of the hospital in the wake of Community Health’s purchase. The hospital is now part of the region’s Rockwood Health System, a union of the two hospitals along with the Rockwood Clinic into what they call an integrated health care delivery system.

The hospital does not yet retain enough market share of Valley patients to satisfy Barts. Many patients continue to choose Catholic-affiliated Providence Health Care hospitals, including Sacred Heart Medical Center and Holy Family Hospital. Providence, in fact, just purchased two family practice clinics in the Valley, which will likely help ensure that thousands of potential patients will be sent to Sacred Heart if they need hospitalization.

The growth of medicine in the Valley has long been of interest to the medical community. The area has been growing at a rapid rate for many years, and medical clinics including general practices and specialists have followed.

But the hospital has not been able to match the growth because of what analysts believe are patient loyalties and belief that medical care downtown is superior.

Barts said the hospital is now working to close that credibility gap. Valley is touting awards it has received from several companies that market services around their grading systems.

All hospitals receive awards for services and quality measures and advertise those achievements.

Barts said it’s high time Valley received accolades.

“We have made quality and safety our No. 1 goal,” he said. Using a football analogy, Barts added: “At Valley we’re not going to mess up on the blocking and tackling when it comes to health care. We’re going to get it right.”

Much of Valley’s staff belongs to the Service Employees International Union 1199 NW, one of the state’s largest labor organizations. There are about 550 nurses and technical and service workers at Valley that are union out of a total workforce of about 725.

After some initial struggles when Community Health System took over ownership of the hospitals, the union and Valley have been working without major employment issues or grievances, SEIU spokeswoman Linnae Riesen said.

Contract negotiations may test the relationship this fall and winter: the pact with registered nurses expires Jan. 1, and the contracts with services and tech workers expire next spring and summer.

The negotiations, however, fall during a time when Valley is enjoying better financial results. Though the hospital lost money during several years in the middle of last decade, a review of hospital financial records on file with the Washington State Department of Health shows that Valley earned $5.6 million in 2010, and preliminary reports show an operating profit of $10.9 million in 2011.

The hospital, like many others, has been working at the same time to manage soaring costs associated with providing charity care for its poorest patients and absorbing write-downs of uncollectable bills. These bad debts, along with the charity care, totaled $19 million last year. That would have been 17.5 percent of the hospital’s net revenues last year.

For most any other business, absorbing such a loss of revenue would be short path to closure, Barts said.

But the hospital has been able to mix more higher-profit procedures, such as knee and hip replacement surgeries and radiology services, into its business. Barts said the Valley has a large aging population that requires the added emphasis.

The hospital also is working closely with several oncology clinics in the Valley, keeping those patients rather than sending them downtown for care.

“We want to offer the kind of services needed by the Valley,” Barts said.