Affiliation approved by hospital trustees

The Carson-Tahoe Hospital Board of Trustees decided Thursday that beginning to hunt for a larger health care partner may be in the hospital's best interests.

Trustees insisted that their third attempt at affiliation be an open process with plenty of public comment.

The only comment they received from the public Thursday was from one resident opposed to the idea of an affiliation.

"I was amazed to read you were even embarking on an affiliation," Dan O'Donnell said. "There was an opportunity to do something with Washoe (Health Systems) but that was refused. I think that was a poor decision."

O'Donnell works in the health care industry and said he often reads of affiliations and mergers falling apart

"This hospital is profitable, and there is no reason to believe it won't continue to be," he said. "What is the impetus for doing this?"

Hospital officials say with the changing state of the health care industry it is pertinent to look for a partner while its financial position is the hospital's biggest asset.

Trustee Jo Saulisberry questioned whether a July time line for choosing a partner was too soon for the group to make an educated decision.

Hospital Chief Executive Officer Steve Smith noted the time line was flexible and the board could still choose not to affiliate with a larger company. The search for a partner could take more than a year, he said.

Consultant group Kaufman, Hall and Associates will seek proposals from up to a dozen regional health-care providers. All must have national integrity and money to help the hospital in its $63 million improvement plan.

Trustees previously approved $80,000 to hire Kaufman, Hall to help them affiliate as well as to determine how much the hospital is worth.

In 1999 the hospital hired Alan Yordy, an Oregon-based health care consultant, to advise on affiliation talks among Carson-Tahoe, Washoe Health Systems of Reno and Lake Tahoe-based Barton Memorial Hospital.

Barton already has a strong position in the Carson Valley, where about 30 percent of Carson-Tahoe's business is generated.

That move came one year after hospital trustees turned down a letter of intent to affiliate with Washoe Health Systems. In November, talks between the three area health providers ended with the affiliation between Barton and Washoe, leaving Carson-Tahoe to mull its standing as the area's primary health care provider.

Trustees also gave final approval to a 7.5 percent across-the-board rate increase.

The hospital is raising rates in response to an estimated $2.2 million reduction in Medicare reimbursements as well as rising costs of pharmaceuticals, blood and labor.

Carson residents can expect to pay about $200 more per visit to the hospital after July 1.

The rates will affect the prices of everything charged at the hospital, but may have not be put into place at the Minden Medical Center, the hospital's Douglas County satellite, to help the facility's urgent care remain competitive.

The raise in rates helps balance the hospital's $79 million budget and will increase employee salaries between 4 and 6 percent. Salaries consume 51.3 percent of the budget.

The Carson City Board of Supervisors will approve a final budget May 15.

April:

- Finalize request for proposals

- Meet with all interested groups

May:

- Distribute requests for proposals to 10-12 regional health care systems

- Continue evaluation of hospital's value

- First town hall meeting

June:

- Review and assess submitted requests

- Review evaluation of hospital's value

- Select two or three possible partners

- Conduct site visits

- Second town hall meeting

July

- Select partner and program

- Make recommendation to hospital Board of Trustees

- Proceed to "due diligence" phase and relationship with new partner

August and beyond:

- Continue "due diligence" and finalization of formal agreements

- Gain approval from Carson City Board of Supervisors

- Begin implementation of new partnership