SEDRO WOOLLEY, Wash.-A six-year struggle by two public hospital districts to operate as one entity-including a 1994 referendum that called for a breakup-has resolved itself through a new partnership deal.
The two hospitals are United General Hospital in Sedro Woolley and Skagit Valley Hospital in Mount Vernon, Wash. The hospitals are about 10 miles apart in Skagit County (See map, p. 28).
Under a plan given final approval last month, the hospitals will become legal partners and share evenly in all profits and costs of property, plant and equipment, including the funding of new property. The partnership will retain the name Affiliated Health Services and continue to be overseen by a 10-member board.
More important, as part of the ongoing negotiations United General got back a 24-hour emergency room that had been closed as a result of an earlier partnership agreement. It's also planning to open a 40-bed subacute-care unit.
In 1991, the hospitals and their respective districts affiliated under one parent corporation called Affiliated Health Services, overseen by a 10-member joint operating board with equal representation from each district's five commissioners.
For the next six years, however, the districts and their representatives fought over which hospital would be "more equal" than the other.
The hospitals' leaders began to butt heads shortly after the 1991 affiliation agreement took effect and acute-care services were consolidated at Skagit Valley. United General was converted into an outpatient diagnostic facility with a 12-hour urgent-care center.
A Sedro Woolley community group wanted its United General facility converted back to a full-service hospital with a 24-hour emergency department. The group took the matter to court and succeeded in getting three of its members elected to the United General Hospital district board.
Daniel H. Garcia, M.D., one of the new board members, said: "People felt it was grossly unfair" that voters in Sedro Woolley had passed a levy to renovate United General's emergency room "and a year after that they wanted to close the ER" under the new consolidation plans.
The United General board passed a motion calling for the dismissal of Patrick Mahoney, chief executive officer of Affiliated. He wasn't dismissed, but in response the Skagit Valley board passed a resolution calling for the system to dissolve.
In a November 1994 advisory referendum, voters said they wanted the affiliation to end and United General returned to its previous status. At the same time, they rejected new taxes to support the change.
District 304 commissioners, representing Sedro Woolley, ordered a study to determine whether it was financially feasible to dissolve the affiliation, and the study found that it was not, Mahoney said. A second study confirmed that running the hospitals under one corporate umbrella would save millions of dollars annually through consolidation or cost avoidance, he said.
Meanwhile, there was a change of commissioners in both districts, "so as the situation unfolded we had new players at the policy level that contributed to looking at things a little differently," Mahoney said.
The upshot was that both hospital boards came to realize that "for our service area, given the pressures of the industry, we had to work together," he said.
"We both realized we needed to work together," agreed United General board member Garcia.
Mahoney drafted a 12-point proposal to make that happen, and both boards accepted it last June. A task force worked for six months to iron out the legal details. After several public hearings, the boards gave final approval to the plan last month.