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New Public Hospital Commissioner questions need for public hospital district: Is anyone noticing?


Next Public Hospital District 1 Public Board Meeting: Monday, January 7, 2008

Approximately half of Washington State's 98 hospitals are within public hospital districts. Most of the rest are run on a not-for-profit basis. This represents a healthcare market that could be quite profitable for private healthcare businesses if it were taken out of the public domain. I believe that our state's public hospital districts are in danger of being opened up to private interests and that an effort to dissolve at least one of these districts, perhaps as a start to dissolving others, is on its way in my district, Public Hospital District 1, the oldest in the state.

In researching an article I wrote in October, Challengers offer improved oversight, I don't know how I missed at least two major articles (1, 2) in the Seattle Times documenting that Anthony Hemstad, one of the people running for the board of PHD 1, had for over a year been engaged in an effort to reduce the size of the district in order to serve the interests of his city. One of the people mentioned along with Hemstad in these articles was activist Chris Clifford, who was quoted in a June, 2006 Seattle Times article (2) as advocating that the district be 'killed' like a dinosaur. Senator Pam Roach, also quoted in these articles, questioned the need for public health districts in urban areas and stated an intention to sponsor legislation to make it easier to reduce the size of the districts. She did so last session, with SB 5818. There is a companion bill in the House, cosponsored by my Democratic Representative, Pat Sullivan, among others.

I see no Seattle Times or PI articles run during Hemstad's campaign that connected all these dots, although after the election reporter Karen Johnson did run this article: Need for hospital district questioned. Today, two Seattle Times articles report critically on actions of the outgoing board without mentioning the possible conflict of interest of the new commissioner: Valley Medical Center's ethics policy could limit criticism, and Valley Board Catches Bad Code.

The second Seattle Times article linked to above is a guest column by Auburn Mayor Pete Lewis, Senator Cheryl Pflug, and Representative Christopher Hurst. It turns out that the outgoing hospital board in its final meeting passed a contract extension for its embattled chief administrator as well as an ethics policy that places some very questionable limitations on investigations into the hospital operations. Files of these two documents were provided to me earlier by Mr. Hemstad: Valley Medical Center Code of Ethics, and Roodman Contract Extension. Lewis, Hurst, and Pflug rightly, I think, cite those documents as evidence that the hospital board members may not have been serving the interests of the public hospital district. But they and the Seattle Times reporter leave it up to the reader to discover from past articles that there is, with an incoming commissioner, what many would consider to be an even more serious public interest issue.

I'm puzzled by own my failure to find those key Seattle Times articles when I did my previous research. I'm puzzled by the failure of the Seattle Times to report on this threat to our public hospital district. And I'm puzzled that Commissioners Carole Anderson and Gary Kohlwes, in their campaigns to hold on to their commission seats late last year, didn't notify the public of this potential threat to the continued existence of the district. If they had, Carole Anderson would almost certainly have held onto her seat, which she lost by a razor-thin margin to Anthony Hemstad.

As Maple Valley's City Manager, new Commissioner Hemstad courted other healthcare investment into the Public Hospital District area
Anthony Hemstad is City Manager for Maple Valley. Parts of that city are within PHD 1, and other land within the city was targeted by PHD 1 for annexation in 2006.

In May, 2006, PHD 1 residents voted on a ballot measure whether to approve that annexation bid. I live in that hospital district and noticed the intense negative coverage of the annexation proposal by the conservative King County Journal. The ballot measure failed by an unprecedented margin: 94% voted against it.

On May 11, shortly before the annexation vote, Seattle Times reporter Sonia Krishnan quoted Anthony Hemstad as opposing the annexation. He also noted: "There are enough facilities that want to open here that are not asking for public subsidies."

On May 27, 2006, shortly after the annexation proposal failed,  Hemstad was quoted by the same reporter as saying said the city would be talking within the next two weeks with four other hospital providers -- which ones in particular he wasn't at liberty to disclose  -- about bringing more services to the region. "We had been looking to bolster health care in Maple Valley before the vote and we're still looking to do so," Hemstad said. "This is a very good market for a hospital to invest in. We're extremely confident we'll be making some announcements soon."

On June 8th, the same reporter quoted Hemstad as mulling over the difficulty of deannexation.

On 12/16/07, shortly after Anthony Hemstad was elected to the board of PHD1, he was quoted in the Seattle Times (3) as stating that it's hard to see any benefits for a public hospital district in an urban area.

Clifford and Senator Roach both backed the election of Anthony Hemstad to the board of PHD1.
In fact, it was the Washington Taxpayers Association PAC, associated with Senator Roach, that brought a $14,000 campaign donation into Hemstad's campaign late in the game to match large donations to the campaign of Carole Anderson, whom Hemstad was challenging. It is also worth noting that an historically large Public Disclosure Commission fine was levied against Valley Medical Center right before the election, almost certainly resulting in votes needed to push Hemstad's candidacy to a win, was the final outcome of a complaint originally filed by Maple Valley's Mayor, Laure Iddings.

PHD 1: A well-run hospital
The administration of PHD 1 has made some spectacular mistakes in recent years. However, I think I owe it to readers to note that I have heard from a number of sources that the hospital is regarded as, generally, very well run. As far as "scorecard" criteria like employee satisfaction, patient satisfaction, financial stability, health outcomes, and range of services available, the hospital is reported to be doing very well. No, it's not perfect and public oversight has not held it fully to account. Anthony Hemstad noted to me that its recent, very expensive, expansion of its emergency room facilities was an investment in the most expensive kind of medical care and that he believes we should be focusing more on prevention.  I agree with him. Certainly, there are many criticisms that can be made of Valley Medical. But the hospital is not so badly run that the entire model needs scrapping.

Is it right to run for election to an agency you may want to dissolve without notifying voters that this is your intention?
In our communications prior to the election, I asked Anthony Hemstad about his plans as commissioner. He didn't mention that he questioned the need for the hospital district's existence, nor that he would consider structural changes once he was elected. I didn't see that idea announced on his campaign website or in the two campaign flyers I received by mail. Had he disclosed this important information, my vote would have been different. If PHD 1 is dissolved, Maple Valley will achieve its goal of no longer being part of the district and will be in a better position to invite in private healthcare investment. These are outcomes that can be said, arguably, to serve Maple Valley's interests. I don't believe they are outcomes that would serve the interests of the public hospital district that Mr. Hemstad has just been elected to.

Different hospital models: public, private, and non-profit: Does it matter which one?
As I understand it, there are three common models for hospital funding: public, private, and non-profit. Washington state has very few private hospitals.  According to the Washington Association of Public Hospital Districts, nearly half of Washington's 98 hospitals are part of a public hospital district.  Most of the others are run as nonprofit organizations. Does it matter what we have here? Is a non-profit hospital as good as a hospital within a public hospital district, for example?

In a phone conversation with me earlier this month, Hemstad corrected an impression that he was calling for privatization of Valley Medical Center. He said that he believes in the non-profit model for hospitals and doesn't see the private market as offering all the answers for health care. He did not dispute that he questions whether we need Valley Medical Center to continue to be run as a public hospital district, although he said that he expects healthcare issues to be a major part of the 2008 elections and wouldn't expect any major changes to current operations to be proposed before we find out what new policies may be put into place in the near future.

If we PHD 1 is replaced by a non-profit hospital, will that make any difference?

I strongly suspect that, with the dissolution of PHD 1, we would discover that commercial healthcare companies are lined up to move into the market much more quickly than a nonprofit public hospital would be able to be organized. Such an outcome would be tantamount to privatizing the district. Even if Valley Medical were converted to a private non-profit, that model would still take away from the public the right to oversight of how the hospital is governed, what capital project are built, and so on.

Healthcare ain't free
It is also important to note that, under all three models, public, private, and non-profit, taxpayers AKA consumers, pay for their healthcare. This stuff doesn't come free and it's not donated. Turn a public hospital district into a non-profit or private one, and our public subsidy will merely shift from being paid through property taxes to, almost certainly, higher costs that are paid in other ways.

Healthcare is not free and, ultimately, the consumer pays.  When private industry takes its cut of the profits of our healthcare, we pay more because we are, ultimately, paying for those profits, as well.  Medicare and Medicaid, insurance for public employees, subsidized technology development, and subsidized capital improvements all are paid for with federal tax dollars. Switching from a public hospital district to private care will simply remove public oversight from the services we pay for and cost us more.

If we think that it is unlikely we'll lose our public hospital districts, we should think again. Here, for example, is a recent report of a California district which is being privatized right now: Group questions hospital deal.

A long history of private industry fighting the right of consumers to control their public healthcare
Recently, my son and I were waiting for a doctor's appointment at the Group Health Clinic in Kent and I noticed on one of the tables a copy of Walt Crowley's book, To Serve the Greatest Number: A History of Group Health Cooperative of Puget Sound. Group Health Cooperative was established about the same time, 1945-1947, as Public Hospital District 1. Both victories for consumer-controlled healthcare were part of the progressive movement at the time that recognized that healthcare costs are lowered when the public controls healthcare provision.

As I sat in the waiting room, reading Crowley's book and thinking about the privatization threat to our PHD 1, this quote caught my attention. It's from Dr. Michael Shadid, who founded the first group health cooperative in the country and helped to found ours: "private ownership of hospitals is wrong and detrimental to the interests of mankind, physically, morally, and financially." A few minutes later, looking up from the book, I saw walking in through the door of the clinic a woman I had met for the first time at the Anthony Hemstad's campaign victory party.

I wrote Mr. Hemstad with an account of that experience and followed it up with an attempt to pull at his heartstrings by saying that perhaps it was a sign! to meet someone from his victory party just as I was reading about the evils of private hospitals from the era when PHD 1 was established. Please, I asked him, look into the proposals for healthcare insurance being developed right now by Senator Karen Keiser, State Insurance Commissioner Mike Kriedler and others. Please don't privatize our hospital. The health of our bodies should not be "marketized", I wrote. (I think the term I needed there was "commodified" rather than marketized.)

Mr. Hemstad, who has been very responsive to my emails so far didn't answer that one, and I don't blame him as it was perhaps a bit, well, unconventional (Note, 1/7/08: As reported above, Mr. Hemstad did explain in a later conversation that he was not arguing for privatization of Valley Medical Center). I hope he heard it the message behind it, however, that his constituents are counting on him to represent our best interests.

Advocates for dissolving urban public health districts maintain they are no longer needed because we have evolved past our urban roots. But Group Health Cooperative was not established because people lived in a rural area. It was founded because farmers and workers were (quote from Crowley's book) "fed up with the scant supply and high cost of health care for working people." That same need informed the formation of the public hospital districts, which came into being at the same time. Both consumer-led endeavors were robustly opposed by private, for-profit healthcare.

Unions and the Grange teamed up to establish the Group Health Cooperative so that healthcare would be affordable to them. Because it was their health at stake and their money, and because they had to plan ahead for costs, the cooperative practiced conservative medicine: high on prevention and low on the kinds of unnecessary interventions and medications that private industry relies upon to raise costs and profits. This model and the public hospital district model, together, influenced the evolution of healthcare in this region and has served us well.  Collaboration between Group Health and university, public, and non-profit hospitals, puttting the lessons learned in the provision of cooperative and public health provision into operation in non-profit organizations. This has helped our region keep health costs lower than the national average.

If PHD 1 has faltered, it has faltered because voters and health consumers in this area have taken their eye off the ball and because some of the people who we entrusted the administration of the district made mistakes. That is no reason for private interests to be able to step in and take control of our healthcare away from the community.


NOTES
  1. Election shocker: "No" vote hits 94% ; Measure proposed by Valley Medical | Voters firmly deny annexation; [Fourth Edition] Sonia Krishnan. Seattle Times. Seattle, Wash.: May 27, 2006. pg. B.1
  2. At least 3 cities want out of Valley Medical district ; Need for districts being questioned | Black Diamond, Maple Valley and Bellevue ask to leave; [Fourth Edition] Sonia Krishnan. Seattle Times. Seattle, Wash.: Jun 8, 2006. pg. B.4
  3. Need for Hospital District Questioned, Karen Johnson, Seattle Times, 12/16/07
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Noemie, thanks for your continued work on this issue.  However I think you have radically and unfairly overstated my intentions and attributed that I am doing what others have been quoted as their own goals.  I was endorsed by about 50 elected officials during the campaign -- primarily Non-partisan officials but also Democrats and Republicans.  Clearly not all of those very varied individuals agree with one another -- nor do I and they agree on everything.  It is extremely unfair to extrapolate out from the opinions of some individual supporters that I agree with everything that they say.  I am my own person.

In the course of the article you generally quoted me correctly.  Those quotes though do not support your claim that I am trying to privatize the district.  I'm not.  

I'm not aiming to dissolve the district. Far from it; I'm aiming to make the district honest, transparent, as good to taxpayers and citizens as they are to patients and their medical staff. That's not a conflict; it's a goal, publicly and repeatedly stated during the campaign and again now. I don't want the hospital keeping secrets, lying, or breaking the law.  That was at the core of my campaign and that is what I intend to focus on in the coming years.  

Frankly, I believe that by being open and engaging the public, Valley Medical has a much better chance for thriving in its current form (as a Public Hopsital District) than by the relative non-transparency of the past - holding "emergency" elections in the spring without publishing voters' pamphlets.  Things like that build cynicism and outrage.  Being open reduces that cynicism and builds cooperation.  

I am actually encouraged about the future at Valley Medical.  You were able to link at the top of your article to their www and list the agenda and minutes for the Board meeting.  Until recently that hadn't been possible and that was one of the variety of reforms we were seeking when running for office.  

More transparency is needed, and I of course am always happy to talk or e-mail with you or others if there are some concern that I can clear up.  I believe that you and I talked on the phone at length in response to the one e-mail that you mention in your article on my not e-mailing you back -- the only e-mail I sent was to set up the time for the phone interview, which took place.

I'm trying to be open and fair here and I hope that your blog continues the same.  It is unfair and inaccurate to say that I'm off to privatize Valley Medical.  

 

by Anthony on Sun Jan 06, 2008 at 07:36:01 PM PST

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I can totally understand the need for hospital districts in rural areas, where most hospital districts exist, because they have fewer patients.

However, I have trouble understanding why a large hospital like Valley Medical Center in a populous suburban area needs to be subsidized by taxpayers. Can someone explain that?  

Per the Association of WA Public Hospital Districts' website there are only three of the many hospitals in King County that are run by hospital districts.

by Cherisse on Sun Jan 06, 2008 at 08:36:09 PM PST

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It would be a mistake to distance ourselves from reform of PHD #1 because that cause has attracted some people we disagree with on other matters. Years of imperial arrogance on the part of the Board of Commissioners, presumably at the behest of the CEO, have undermined the special benefits we should receive from public ownership and violated the public trust. Unless this is turned around, pressure can only increase to dismantle the District.
Sadly, the passage of the notorious "Code of Ethics" suggests that the holdover members of the Board may be in serious denial of this fact. They are sealing up the windows rather than letting in the fresh air and sunshine. New members Hemstad and Bowman have a formidable task to turn this around, and they will need our active support.
I am grateful for the presence of Valley Medical Center in our community. Getting its governance in order will help ensure that it remains a public asset for the future.

by Tyler Page on Mon Jan 07, 2008 at 10:38:35 PM PST

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This is kind of late to be responding to this article, but i just found this.  I think people are pretty irritated by all the advertising Valley Medical Center does.

http://newcastle-news.com/2008/05/07/letters-to-the-editor


Public hospital district outdated, unfair
A leader of a support group for Valley Medical Center has written that it is somehow inappropriate to keep up the pressure to eliminate Public Hospital District No. 1's taxing authority. I disagree. I only wish that our own 41st District legislators would join with Sen. Pam Roach in trying to do away with an outdated and unfair tax.

I'm no Tim Eyman, pretending that we can have government services without paying for them. I voted yes on the library bond and yes on paying for light rail and road improvements, and I always support school levies, even though my children are long out of the K-12 system. This is different. Let me explain why.

I am a lifetime member of Group Health and intend to stay with it for the superior service and coverage it offers. But because I live in the older part of Newcastle, this year I will pay $222.74 in property tax to support a medical establishment I will never use. Does that seem fair to you? It doesn't to me.

Public hospital districts were formed in 1945 to ensure that medical care was available in rural areas - which this then was. But the era of horse pastures and barns is long gone from King County and so should the hospital district concept be. My civic leaders keep telling me that we live in an "urban village." If so, isn't it time to rid ourselves of this rural artifact? If hospital districts are such a good idea, let's tax everyone statewide - or at least everyone in Newcastle.

The vast majority of hospitals in our county get by just fine without a taxpayer contribution and so should Valley Medical. If they are as good an outfit as their advertising (paid for with my money) says, they shouldn't have any trouble attracting enough patients to meet expenses. The folks from the tax-free part of Newcastle who use the Valley Medical clinic in Newcastle can start paying the actual, unsubsidized cost of their care and I'll spend my limited resources where they work for me.
Sue Beverly
Newcastle

by ktkeller on Fri May 09, 2008 at 12:50:14 PM PST

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by brg8 on Sun Jun 01, 2008 at 10:48:03 AM PST

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