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Commission will vote March 18 on PeaceHealth contract; read it in its entirety here

San Juan Island hospital district commissioners will vote March 18 on a contract that would give PeaceHealth the right to build and operate a hospital on San Juan Island for 50 years.

The commission meets at 5 p.m. in the Frank Wilson EMS Building on Spring Street. The meetings are open to the public.

According to the proposed contract, PeaceHealth would bear two-thirds of the cost of buying land for and building the hospital, estimated at $29.8 million. One-third of the cost would be raised philanthropically by the San Juan Community Hospital Committee.

The property taxes you pay now to the hospital district would be passed on to PeaceHealth to subsidize healthcare services.

PeaceHealth would build an EMS facility at the new hospital and sell it to the hospital district, which would presumably use proceeds from the current Inter Island Medical Center property. PeaceHealth would be responsible for all financial liability of the hospital.

The contract is available for public review at the medical center. It will be posted shortly on SanJuanJournal.com.

If the commission approves the contract, it will then need to be approved by Whatcom Region PeaceHealth and the PeaceHealth system board. The next steps:

PeaceHealth would notify the state Department of Health that it intends to request a certificate of need from the state, certifying that a hospital is needed on the island. It would take the state Health Department about nine months to make that determination, according to Tom Cable, co-chairman of the San Juan Community Hospital Committee.

Upon receiving the certificate of need, the San Juan Community Hospital Committee would request one-third of pledged philanthropic contributions in order to fund the design, permitting and planning of the hospital. By this time, PeaceHealth may have purchased a 10- to 11-acre site for the hospital; two sites are under consideration, Cable said in an earlier interview.

One source said the sites are located near Friday Harbor Airport.

PeaceHealth would seek to get the site annexed into the Town of Friday Harbor (a hospital must be connected to municipal water and wastewater systems). Then, the site would be developed. According to the contract, annexation is expected to occur by September 2010. Proponents hope construction will begin in 2011, with the hospital opening in 2012.

The day the hospital opens, Inter Island Medical Center would close. The hospital would be overseen by a governing board appointed by PeaceHealth but consisting mostly of islanders. The governing board would be directly responsible for the operation of the hospital, but would provide annual reports to the hospital district commission.

The hospital district commission would continue to be directly responsible for the operation of San Juan Island EMS.

PeaceHealth is a non-profit healthcare system that operates St. Joseph Hospital in Bellingham, as well as other healthcare facilities in Alaska, Oregon and Washington. Proponents say the hospital would provide many medical services for which islanders must now travel to the mainland. They say it would bring 24/7 medical care to the island, would replace an aging facility, and would yield better Medicare and Medicaid reimbursements for services.

Inter Island Medical Center is actually a clinic and services there are reimbursed at the rate for a doctor's office visit.

Dr. J. Michael Edwards, a hospital district commissioner and co-chairman of the San Juan Community Hospital Committee, has said maintaining the current level of clinic-based service wouldn’t be possible without increasing taxes. And the situation is going to get worse, Edwards said in an earlier interview. “We’re facing a 16 percent Medicare fee-for-service reduction in 2009.”

PeaceHealth expects the new hospital would break even in three years and be profitable after that. Profits generated locally would be invested in on-island medical care, including equipment.

While the contract refers to the proposed hospital as a "Combined Clinic and Hospital Facility," proponents say it will actually be an "integrated medical center" because it would integrate a variety of services at one site: inpatient care, outpatient care, diagnostic services, and emergency medical care.

Inpatient surgeries would still be referred to mainland hospitals. Heart attack and stroke patients would still be taken to mainland hospitals. Babies would still be born on the mainland.

Services that would be provided on-island: Outpatient surgery, chemotherapy, cardiology, diagnostics and imaging, gastroenterology, oncology, rheumatology, and treatment for body injuries and neurological degenerative disorders.

Patients could stay in the integrated medical center for observation and short-term care after surgeries. There would be 10 hospital beds.

The medical center would be about 42,242 square feet, including 24,492 square feet of clinic space for doctors and specialists. Inpatient and outpatient space would comprise 14,250 square feet; the emergency department would comprise 3,500 square feet. The staff would grow from 25.3 full-time equivalents to 44.5.

San Juan County Public Hospital District No. 1 and Peace Health contract

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