Kaiser to enter hospital deal with Legacy Salmon Creek

Longtime relationship with PeaceHealth to end this fall




About 100,000 Clark County residents who receive health insurance through Kaiser Permanente Northwest could find themselves using Legacy Salmon Creek Medical Center for hospital services under a sweeping new agreement between the two medical giants.

The arrangement, announced Tuesday by Kaiser and Legacy offiicals, will increase employment at Legacy’s facility in Salmon Creek and rearrange where many people get their care. Until Oct. 1, PeaceHealth Southwest Medical Center will continue to provide hospital services for Kaiser-insured residents in Clark County.

Jonathan Avery, chief administrative officer for the Legacy Salmon Creek facility, said the deal with Kaiser means the hospital will add an estimated 200 jobs. The payroll increase would not only add back the 20 positions cut at the Salmon Creek site last year but it “significantly expands our team,” Avery said.

“We’re working on detailed plans to ramp up right now,” he said. “We’ll definitely start that process in the next several months.”

Dr. Thomas Hickey, associate medical director for Kaiser, said that over the next eight months Legacy Salmon Creek will gear up to handle most of the hospital care received by Kaiser’s Clark County members. “Of course,” he added, “patients should go to the nearest hospital if they’re having an emergency.”

But Kaiser’s recent pattern in its 15-year contract with PeaceHealth Southwest Medical Center, which will end when the Legacy contract takes effect, suggests that many of Kaiser’s Clark County members could still be directed to hospital services at Kaiser’s medical center in Clackamas, Ore.

Joe Kortum, president and chief executive for PeaceHealth Columbia Network, which encompasses PeaceHealth operations in Vancouver and Longview, said Tuesday Kaiser’s policy of directing patients away from PeaceHealth and sending them to its own Sunnyside Medical Center in Clackamas has long been a source of contention between the two parties.

“I’d be surprised if Legacy isn’t treated the same way we are,” Kortum said. “I wish them well.”

Kaiser declined to specifically address Kortum’s questioning of whether it would send Clark County members to facilities in Oregon, rather than to Legacy Salmon Creek, under the new arrangement.

Not all of the details have been worked out as to how the changeover will affect Kaiser’s Clark County members.

But Legacy and Kaiser officials offered some examples. They said, for instance, that Kaiser-insured residents who used to go to PeaceHealth Southwest for family birth services will instead head to Legacy’s hospital in Salmon Creek for that kind of care. But decisions in many areas of medical treatment will be left to Kaiser doctors, who can direct patients for care to Legacy Salmon Creek or to a Kaiser facility.

Some residents are already assuming they won’t need to leave the county for treatment. Hazel Dell resident Maxine Davison, who receives Kaiser insurance through her husband’s employer, said the arrangement means she won’t have to drive “all the way over to PeaceHealth” or to Kaiser’s Sunnyside facility in Oregon if her family needs to visit the hospital. “It’s more convenient,” Davison said.

Kaiser and Legacy officials declined to divulge the value of their new seven-year contract. It will require final approval by the state Office of the Insurance Commissioner. The new arrangement will not change how Kaiser’s Clark County members receive care at Kaiser’s primary care clinics.

‘A significant number’

Kortum said Kaiser’s decision to switch to Legacy Salmon Creek “will hurt.”

“I don’t think we have a number to evaluate that,” he added. “Fortunately, we have between now and October to deal with this. No. 1, we want to protect our employees. We want to handle the declines through normal employee turnover, given the time frame.”

For more than a year, Kortum said, PeaceHealth has been taking financial hits from Kaiser’s practice of channeling patients to Oregon. “The revenue lost to our hospital and our community has been a significant number,” he said, putting the loss at millions of dollars.

By their nearest estimate, officials estimate Vancouver-based PeaceHealth Southwest Medical Center’s patient volume dropped by 987 patients in the 12 months ending in June 2012, compared to the 12 months ending in March 2010.

That translated to an $8.1 million loss in revenue, said Ken Cole, a PeaceHealth spokesman.

“That’s revenue that has historically come to our facility,” he said, adding that the decline matched the timing of Kaiser’s directive asking its physicians to refer their patients to the system’s Oregon medical centers.

In early 2011, PeaceHealth publicly criticized Kaiser for what it saw as a costly and burdensome plan to move 1,000 elective surgeries away from other hospitals to its Sunnyside facility.

Kaiser countered that the financial impact wasn’t that significant and that there had never been any order to move patients away from PeaceHealth or other Kaiser-network hospitals to a Kaiser-operated facility.

Susan Mullaney, Kaiser’s vice president of hospital operations, said Tuesday that switching from PeaceHealth Southwest to Legacy Salmon Creek wasn’t “a matter of us being dissatisfied at all with PeaceHealth. We’ve had a very good relationship with them for a long time. This is about an exciting new partnership.”

Kaiser continues to have a relationship with PeaceHealth hospital St. John Medical Center in Longview. In an emailed statement to The Columbian, Ryan Lilyengren, a Kaiser public relations manager, said Kaiser does not have a contract in place with that hospital. “We’ve been in discussions and are hopeful a resolution will be met in the near term,” Lilyengren said.

‘Similar philosophies’

Kaiser’s decision to team up with Legacy, officials said, is based on the opportunity to bring together two companies that share similar care models and philosophies. And the partnership, they said, is designed to better serve health needs in Clark County.

Kaiser’s members in Clark County will benefit from the new arrangement in several ways, officials said, including having access to Legacy’s highly rated care — supported by electronic medical records — its board-certified pediatric emergency care and convenient access from the Interstate 5 and Interstate 205 interchanges.

At Legacy Salmon Creek, Avery said the hospital will expand the capacity of its family birth center to accommodate “somewhere on the order of 1,000 deliveries” that will shift to the facility under the deal with Kaiser. Legacy Salmon Creek also expects to see increased patient volumes in its adult medicine unit and “in our emergency department,” Avery said.

Legacy and Kaiser have the next eight months to work out the details of their new agreement, Avery said, and both parties are committed to a “seamless transition.”

He added, “This is definitely the biggest moment for Salmon Creek since we opened the hospital back in 2005.”

The new contract’s timing roughly coincides with Kaiser’s scheduled opening this fall of a 126-bed Kaiser Permanente Westside Medical Center in Hillsboro, Ore. The $344 million, 421,000-square-foot project features a full-service emergency department, 90 exam rooms and eight operating suites and is now under construction in the Tanasbourne area, adjacent to Portland’s busiest arterial, U.S. Highway 26. Kaiser expects the center to employ a staff of nearly 1,000 health care workers, including nearly 60 specialty care providers.

“This is major infrastructure they’ll have to support,” said Cole, the PeaceHealth spokesman. “So, it makes more sense financially for them to pull those patients into that facility.”

Aaron Corvin: http://twitter.com/col_econ; http://on.fb.me/AaronCorvin; 360-735-4518; aaron.corvin@columbian.com.

Cami Joner: 360-735-4532, http://twitter.com/camijoner or cami.joner@columbian.com.