Group Health Cooperative of Puget Sound has formed a partnership with Children's Hospital and Regional Medical Center and Overlake Hospital Medical Center to keep its Eastside Hospital open.
The decision ends months of speculation about Group Health's potential sale of the Eastside facility, which has seen dwindling patient use. A number of potential buyers, including Microsoft Corp., had reportedly expressed interest.
Patient use of Eastside Hospital has been decreasing by 10 to 15 percent a year since 1989, although the decline appears to be leveling off, said Group Health President Cheryl Scott.
Use declined in part because of growing alternatives to hospitalization, such as increasing outpatient surgery and in-home care.
The only way Group Health could continue to operate the hospital was by collaborating with Children's and Overlake, Scott said.
It made better economic sense to keep the hospital in light of the rapidly changing health care environment, she said.
``Once you get out of the business, it's very hard to get back in,'' Scott said. ``Our reading of the tea leaves is that the world of health care is not very predictable, and we wanted to keep our options open.''
Hospital use is picking up again as the population ages, she said.
Under the agreement, Children's will provide doctors and help oversee pediatric care at Group Health, which will serve its own patients and non-Group Health families. Group Health serves about 100,000 residents on the Eastside.
Eastside population growth and increasing traffic across the lake made an Eastside facility desirable for Children's, said Dr. Sanford Melzer, vice president of Children's Health Care System Medical Administration.
Children who need intensive services, such as critical care, organ transplants or heart surgery would still be treated at Children's main hospital in Seattle.
Details of the collaborations are still being ironed out, Scott said. Overlake and Group Health are actively seeking ways to help each other serve the Eastside market.
Overlake, which has seen its patient base grow 20 percent in two years, is in an expansion mode, Chief Executive Officer Ken Graham said.
``We believe Group Health and Overlake have the potential to develop some exciting opportunities that build upon recent collaborations such as the creation of the Eastside Sleep Disorder Center,'' Graham said.
This is not the first time Children's has looked at the Eastside. In 1989, Children's bought land in Issaquah for a facility, but never built and later sold the land because pediatric patient numbers declined.
By combining with Group Health, both organizations will have a needed critical mass of patients, Melzer said.
In other hospital news, Evergreen Community Health Care of Kirkland yesterday disclosed that it has terminated its memorandum of understanding with Swedish Health Services.
Evergreen and Swedish had planned a new non-profit corporation that would have leased and operated the Evergreen and Swedish facilities.
The proposed partnership would have been a first for Washington since Evergreen is a public hospital and Swedish is private. Last year, the Legislature passed a bill that permitted hospital districts such as Evergreen to establish non-profit ventures with other hospitals.
However, the business model was unable to address all the complexities of the differences between the two proposed partners, Evergreen spokeswoman Gail Neubert said.
P-I reporter Carol Smith
can be reached at 206-448-8070
or carolsmith@seattle-pi.com
