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Hospital Commission votes to further explore construction of new medical center

The San Juan Hospital District Commission voted unanimously Wednesday to accept and sign a non-binding letter of intent with PeaceHealth to further explore building a new integrated medical center on San Juan Island.

The letter of intent must be approved by PeaceHealth's Whatcom region Board of Directors as well as the system's Board of Directors prior to taking effect. That approval is not scheduled until late July.

"This is a fairly big step for this community, yes, and it's a big step for PeaceHealth too," said Tom Cable, co-chairman of the San Juan Community Hospital Committee, an unaffiliated organization that has been working toward the goal for the past two years.

For the commissioners, there was broad support for moving forward with further investigation of the project. "I knew when I took this position that there would be times when I would be kept up at night struggling with a decision," Commissioner Bob Low said. "This is not one of those times."

Only after the letter of intent was approved by the commissioners did they open up the meeting to public input or questions on the details.

The letter of intent commits PeaceHealth and the hospital district to collaborate toward an application of a certificate of need to the Washington state Department of Heath, the next formal step after many questions are answered as the proposal takes shape.

Jointly, the two entities, PeaceHealth and the hospital district, would work to investigate the purchase and financing of a site for the medical center, the location of which is yet to be determined. Such a site would include facilities for San Juan EMS.

According to the letter of intent, PeaceHealth would assume full operational and financial responsibility for the medical center, would invest in the necessary equipment to run it and would establish a governing board to oversee it. The governing board would require a majority of its members be residents of the hospital district.

In turn, the hospital district would work toward securing $10 million in philanthropic donations to make the endeavor possible, would cooperate with PeaceHealth as they begin to work closely with San Juan Island's existing clinic, Inter Island Medical Center; and would contribute about $12.8 million in tax money collected through its existing levy toward construction of the project.

Dr. J. Michael Edwards, a hospital district commissioner and co-chairman of the hospital committee, said commissioners have a responsiblity to the taxpayers and the public to be as transparent as possible in this process, but couldn't commit to disclosing certain details to be worked out as the due diligence process continues.

"That's what this next phase is all about, to hammer out all the details," Edwards said. "There's a bazillion other nuances to explore. Issues that have yet to be defined and refined."

Edwards reiterated that the current medical center — which is actually a medical clinic — is unsustainable, and that maintaining the current level of clinic-based service wouldn't be possible without increasing taxes. The situation is going to get worse, Edwards said. "We're facing a 16 percent reduction in Medicare fee-for-service reduction in 2009. The reductions pending are in two parts. The first to the tune of 10.6% is due July 1st 2008. The second of 5.4% in the year 2009."

Once the letter of intent is approved by PeaceHealth authorities, the two entities have six months, extendable to nine months, in which to put such a plan in place prior to the application of a certificate of need.

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