Once again, physicians spoke out against a hospital system merger — and got results.
One month after Beaumont Health and Advocate Aurora called off their merger, Virginia Mason Memorial hospital in Yakima, Washington, announced that it was withdrawing from its parent Virginia Mason Medical System as the latter pursued a merger with CHI Franciscan.
Retired physicians were among those who publicly opposed the merger.
While Virginia Mason Memorial is aiming for independence by the start of 2021, the rest of the nonprofit Virginia Mason system still expects to merge with CHI Franciscan, a Catholic system based in Tacoma, that is part of the larger, Chicago-based CommonSpirit Health, also a Catholic system.
Memorial is one of three hospitals within the Virginia Mason system, and is the smallest, raising questions as to whether it can survive independently.
Reduced Services, Concern About Catholic Priorities
Formerly called Yakima Memorial, the 226-bed community hospital opened in 1950, joining Seattle-based Virginia Mason in January 2016 with the stated goal of enhancing quality of care.
After experiencing that small consolidation and now facing a larger one, Memorial board leaders voted in late October to withdraw from the system by the end of 2020. The board “wanted to ensure that health care in the Yakima Valley remained local,” according to a press release.
Leaders made this decision after retired physicians met with board members and placed an ad in the Yakima Herald-Republic blasting the merger and Virginia Mason. State advocacy groups, including the American College of Obstetricians and Gynecologists of Washington, joined their opposition.
The former physicians cited lower-quality care and fewer specialty services and specialized physicians since Memorial joined Virginia Mason, saying they were concerned these problems would only grow with further consolidation.
“No open-heart surgery,” former orthopedic surgeon Jim Haven told the Herald-Republic. “No neurology service. No plastic surgeons. General surgeons in short supply. … It’s been greatly accelerated since Virginia Mason Memorial took over.”
Richard Twiss, MD, a retired cardiologist, was another of the physicians who spoke out. “By becoming a local institution free of the constraints by Virginia Mason, we are hoping our community will restore [specialty] services,” Twiss told MedPage Today.
Virginia Mason forced independent Yakima providers to become employees, breeding resentment, Twiss said. The pandemic has also caused friction. The system furloughed and cut pay for healthcare workers this spring, and management was recently accused of critical care understaffing, asking nurses to reuse N95 masks, and not alerting employees about COVID-19 exposures at Memorial.
Other merger opponents feared meshing with a Catholic system. Even as four of the 10 largest hospital systems and one of every six hospital beds nationally are Catholic, according to reports, most still forbid providers from conducting certain care. Several Washington cities have seen abortion and similar services cease at local hospitals absorbed into Catholic systems, Kaiser Health News reported.
Advocates thus “are relieved” for Yakima residents, according to a statement they co-signed. “Unfortunately, the merger will still negatively impact health care access for thousands of Washingtonians.”
Can Memorial Survive Alone?
Virginia Mason Memorial is the only hospital left in the Yakima Valley — a region of 250,000 people 250 miles southeast of Seattle — after Astria Regional Medical Center closed in January, and some have questioned whether it can survive on its own.
Executives with Swedish Health Services in Renton and MultiCare Health in Tacoma are skeptical of stand-alone hospitals surviving, they told Seattle Business Magazine last year. “Finances are likely to be a concern with a large number of patients in the Yakima Valley on Medicare and Medicaid,” according to a Herald-Republic editorial.
In September, Memorial was granted $14.8 million in high-impact provider relief funds from the U.S. Department of Health and Human Services via the CARES Act, according to the database COVID Stimulus Watch.
One positive is that the hospital lacks competition locally and has a more stable financial situation than Virginia Mason, Twiss said. Memorial should be able to petition the Centers for Medicare and Medicaid Services (CMS) for more advantageous rural hospital status; it had been designated urban as a Virginia Mason partner.
However, the region is not impoverished, nor is it particularly small, noted Rep. Eileen Cody, who chairs the state’s House Healthcare and Wellness Committee.
Memorial’s fate may hinge on board-executive cooperation, Twiss said. While the board supports boosting specialty care and opposes the controversial physician-employee model, he said the administration has not. He also noted that new CEO Carole Peet once worked in the Franciscan system.
Merger to Move Ahead
Without Memorial, Virginia Mason and CHI Franciscan are still pursuing their partnership.
Virginia Mason includes the 336-bed Virginia Mason Hospital, a primary and specialty care group practice with more than 500 physicians, outpatient services and centers, and a research institute. CHI Franciscan is a $2.45-billion system with more than 4,000 providers in 10 hospitals with more than 1,250 beds and more than 200 clinics in the Puget Sound region.
CHI Franciscan has been part of two recent mergers, including one last year when CommonSpirit Health was created to form the largest nonprofit system nationally, at $29 billion in revenue for fiscal year 2019.
Virginia Mason and CHI Franciscan have been working together on obstetrics, women’s health, and radiation oncology, a spokesperson identified as Alex Newby wrote in an email to MedPage Today. (Leaders declined phone interview requests, with Newby representing the proposed combined system.)
Their new arrangement “would ensure the financial viability of Virginia Mason,” Newby wrote. “Even before the COVID-19 pandemic, the financial resources required to deliver high quality care were growing exponentially.”
CHI Franciscan is attracted to Virginia Mason’s “high-value” care, as well as its “quality, safety and patient satisfaction.”
In addition, according to the Community Catalyst report: “By becoming larger, Catholic systems can gain greater geographic reach, market share, purchasing power and the ability to weather the financial challenges of the hospital business.”
It is too soon to know the merger’s full impact on providers and other healthcare workers, Newby said. “The combined organization intends to expand care and we believe this change would provide new opportunities,” according to Newby’s email. “We expect that the new health system will continue to attract top talent.”
Newby also answered questions about what providers may face in a consolidated Catholic system: “While some services related to reproductive health, such as elective pregnancy terminations, and physician-assisted death would not be provided at Virginia Mason, all other end-of-life care and palliative services will continue.”
Virginia Mason would also continue to honor advance directives, including do-not-resuscitate demands. If patients ask about services the new system does not offer, it would share information about providers who do.
Consolidation Under Scrutiny
State leadership, including Cody, remains concerned about the merger. Washington’s attorney general still must approve the merger, but Cody said she doubts it will be stopped.
While it is likely too late to prevent this merger, Cody expects lawmakers will move to erect stiffer barriers to consolidation during the next legislative session, slated to begin early next year.
“Everyone is concerned about losing the last really independent hospitals that we had in Seattle,” Cody said, noting the merger would leave the metro area of 4 million people with just three hospital systems. Already many insurance carriers feel hamstrung in negotiations by the oligopoly, she said.
Another major worry is that Catholic systems run about half the state’s beds, she said, severely limiting choice for patients seeking services Catholic hospitals do not provide. “The people of this state have voted that they want access to [abortion and death with dignity],” she said.
Washington is hardly alone in facing such consolidation issues, Cody said. “There’s a tension that doesn’t seem to be getting worked out.”