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The boards of Skagit Valley Hospital in Mount Vernon and Cascade Valley Hospital in Arlington each voted last week

to negotiate a partnership with PeaceHealth and its affiliate UW Medicine.

The board of Island Hospital of Anacortes voted not to enter negotiations at this time, saying it wanted to further study proposals from PeaceHealth and other suitors Virginia Mason and Providence/Swedish and align priorities with the community and medical staff.

By selecting PeaceHealth as a partner, the Skagit Valley and Cascade Valley boards will individually enter nonbinding negotiations with PeaceHealth to determine the conditions of an eventual contract. Once negotiations are completed, in about six months, the boards will vote on a final contract.

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Island Hospital, meanwhile, will set up a community-advisory board and investigate the proposals over the next few months, said Buzz Ely, president of Island Hospital’s board of commissioners.

Board alliance

The three hospital boards, representing hospitals in Mount Vernon, Arlington and Anacortes, formed an alliance almost two years ago, calling themselves the interlocals. Recognizing a change in health care was well on its way, they aimed to lower costs through purchase agreements, start joint ventures for facilities and help boost recruiting efforts for doctors.

An analysis of their long-term health-care needs and financial stability showed the necessity of finding a larger provider as a partner, said Dan Merlino of the consulting firm ECG Management Consultants, which was hired by the interlocals.

Clark Todd, president of the Skagit Valley’s board of directors, said Skagit Valley’s steering committee for the partnership recommended a medium partnership with PeaceHealth and the UW that allows the board to retain control over the finances and operations of Skagit Regional Health.

The proposal was produced by PeaceHealth to address concerns from the board about PeaceHealth’s “Statement of Common Values,” which restricts patient access to elective abortion, in vitro fertilization, donor insemination and consultation about Death with Dignity within hospital walls or with Peace-Health-paid doctors.

“I’ve got to hand it to PeaceHealth for really sharpening their pencils and probably burning through a lot of erasers to come up with a plan that worked for us,” said Skagit Valley board member Bruce Lisser.

Services continue

Under the proposal, emergency abortions and elective sterilizations will continue to be performed in Skagit Valley Hospital, Todd said. He said Skagit Regional Health will support any referral request made by a community member for elective abortions.

End-of-life discussions under the state’s Death with Dignity Act between employees and patients will continue as they currently do, Todd said.

Under the recommended proposal, all staff members and physicians will continue to be employed by Skagit Regional Health.

The proposal would not give Skagit Valley direct access to PeaceHealth’s balance sheets but would give the local system access to the Epic health-records system, a better ability to attract and retain doctors and the ability to join PeaceHealth’s developing accountable-care organization network, Lisser said.

Specialty clinics could be added to the area, and cost savings could be realized through consolidation of support services through joint ventures between PeaceHealth and Skagit Valley. Todd said negotiations of these individual joint ventures will determine how PeaceHealth’s religious directives play into them.

Challenges ahead

Designing and operating this special arrangement will be complicated, Todd said, but he noted “the benefits to our patients, our community members and our employees will outweigh those disadvantages.”

Skagit Valley Hospital’s board voted 6-1 to move into negotiations with PeaceHealth.

Commissioner Stan Olson cast the lone vote of dissent, saying he preferred the full-integration model proposed by Virginia Mason.

Cascade Valley Hospital voted unanimously to pursue a deep affiliation with PeaceHealth moving into negotiations.

Island Hospital’s Ely recommended a community-advisory board take up to three months to determine what each potential partnership would mean to the hospital, its staff and its served residents.

“With a lot of focus on the ERDs (ethical and religious directives), I’m not sure that our community is fully aware of all the pros and cons of what an affiliation with a larger system truly means for our hospital,” Ely said.

He said the hospital will continue to work with interlocal partners and suitors as time goes on.

Tim Cavanaugh, board chair of Cascade Valley Hospital, and Todd both said they didn’t think Island’s decision not to pick a partner yet would affect the relationship of the interlocals.

“This has been an incredible process; you have all put so much time and energy and thought,” Nancy Steiger, CEO of PeaceHealth’s Northwest Network, said to the boards. “I would say regardless of what decision any of them made, I believe they put their communities above their own personal interests.”

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