Resources: Articles

Covering the potential effects of hospital consolidation in Yakima, Wash. Date: 10/24/14

By Molly Rosbach | Yakima Herald-Republic

When my editor and I first discussed the idea of a hospital consolidation project, I felt my eyes glaze over at the thought of all the spreadsheets and 990 forms I would have to sift through. Consolidation is a largely financial decision, so I assumed that numbers would provide the driving force for the story.

Instead, I found that while the numbers do add weight to hospitals’ claims of desperation, the bulk of the story lay elsewhere.

Here’s the gist of it: In Yakima, Wash., the one remaining independent, nonprofit community hospital announced a year ago that it’s looking for someone to partner with to stave off financial uncertainty in the future. It reached out to several larger Seattle organizations, but only one is still engaged in talks.

Yakima Memorial is the single largest employer in the county, and it’s the hospital that serves the bulk of our large population of Medicaid and uninsured patients. A consolidation series isn’t exactly sexy, but we sought out this story because whatever the hospital decides to do will affect nearly everyone in the community.

That’s what we kept coming back to: What will this mean for patients, for doctors, and for the other community providers that have long partnered with a local hospital? Those were the stakeholders we focused on to get a perspective other than the rosiest-possible-picture often painted by the hospital itself.

I was lucky to have an expert source in mind when I first started. At the annual AHCJ conference in Denver, one of the panels was on how mergers and consolidations will affect health care. I sought out Robert Field, who teaches law and health management and policy at Drexel University. I also had a national hospital consultant whom I’d talked with when the Yakima Memorial announcement came out a year earlier. They helped provide me with the national context for our local story: How many hospitals of Memorial’s size were still trying to go it alone? Was the hospital’s Medicaid-heavy payer mix, often cited as the reason for financial woes, really bad enough to merit selling? What happens to patient costs in consolidated markets?

The numbers helped back up what I learned; year-end financial data on file with the Department of Health allowed me to track the hospital’s operating revenues and expenses over time to see just how dire its situation was. And AHCJ’s hospital finance guru Karl Stark walked me through the EMMA site to check for unusual activity that might hint at big losses or debts.

It’s easy to get bogged down in numbers, but really, the specific figures are not as crucial as understanding how and when they prompt hospitals to partner up. Each organization seems to have its own threshold for the amount of uncertainty it can withstand. Keeping the story focused on people and the local impact helps avoid the intimidation of hospital finance, which is confusing even to the people in the industry.

While Memorial couldn’t comment on specific possibilities, I reached out to other small hospitals in similar markets that have already consolidated. This offered the best look at what patients might expect if a partnership were to form.

My story wasn’t meant to be a “gotcha” piece, though I wanted to take a hard look at Memorial’s financial situation. But crafting it as an explainer meant the hospital was willing to work with me and lay off the spin. I was also incredibly fortunate in having an editor who both encouraged me every step of the way and knew how to structure the series to best convey the impact.

Going forward, the story gets trickier. We’re in a holding pattern now until the hospitals announce their next move; if it is to consolidate, there’s a good chance certain services could move to Seattle only, which would create a significant access barrier for patients on fixed incomes or without reliable transportation. The larger hospital may take on Memorial’s debt, and likely find efficiencies through reduced staffing. We’ll be keeping a close eye on patient costs and any unusual charges that might suddenly be tacked onto their bills.

This is a story that touches everyone, as everyone needs health care at some point and the entity delivering that care makes a difference. Your eyes might still glaze over, but once you get past that, the big-picture story is well worth writing and definitely doable.

UPDATE:
On Oct. 29, Memorial announced it had signed a letter of intent with Virginia Mason as the first step toward formally pursuing a partnership that would see Memorial become part of the VM system. For us, this means the hospitals can finally open up a bit more about what they like in each other, but they still have not provided details of what might change should the partnership go through.

Consolidation Package

In face of health care consolidation, Memorial Hospital is at a crossroads
Two-day series, Sept. 7-8, 2014

Mainbar Day 1: In face of health care consolidation, Memorial Hospital is at a crossroads

Sidebar: Memorial’s potential partnership list quickly dwindled to just Virginia Mason

Sidebar: Memorial Hospital eyes greater financial certainty

Mainbar Day 2: Hospital consolidation: What it could look like in Yakima

Sidebar: Yakima Regional was first in taking hospital consolidation plunge