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1996-08-22 Regular MeetingKODIAK ISLAND BOROUGH Special Assembly Meeting August 21, 1996 A special meeting of the Kodiak Island Borough Assembly was held August 21, 1996 in the Conference Room of the Kodiak Island Borough Building, 710 Mill Bay Road. The meeting was called to order at 12:06 p.m. There were present: Gary Stevens, Presiding John Burt Suzanne Hancock Robin Heinrichs Bob Johnson Jack McFarland Mike Milligan comprising a quorum of the Assembly; and Jerome Selby, Mayor Donna Smith CMC /AAE, Borough Clerk Joel Bolger, Borough Attorney APPEARANCE BY PROVIDENCE HEALTH SYSTEM ALASKA Present from Providence Health System Alaska was Douglas Bruce, Chief Executive; Aron Wolf, M.D., Associate Administrator /Medical Affairs; and Colleen Bridges, Assistant Administrator. Douglas Bruce thanked the Assembly for the opportunity to be a potential partner with the community. He expounded on written responses to questions submitted by the Assembly: 1. Providence did not foresee a joint venture with Columbia HCA Health Care Corporation due to anti- trust implications. In addition, competition was good for the community. Providence instituted an all Alaskan partnership collaboration in areas where it made sense to not have duplicate clinics in Anchorage. Additionally, another area was an effort to have healthier communities by keeping citizens healthy so service was not just provided to the ill. Providence concentrated in Alaska, Washington, and Oregon with 29 institutions, as well as two in California. The Sisters of Providence were the predominate health care providers in Washington and Oregon. If a combining of Catholic health care systems was accomplished, Providence would be far above the largest NFP health system. It was believed Special Assembly Meeting August 21, 1996 REGULAR MEETING ROLL CALL Volume XXI Page 232 that within the next ten years there would be a great ADJOURNMENT number of member facilities, especially since rural health care was changing. Providence has been in Alaska since 1902 and central Alaska since 1939, in addition to being the major providers in the Northwest with a fairly sizable system in Alaska. Providence has a low debt to equitable ratio and believed those who survive were prudent in continuing to serve their mission. Providence adjusted to be a dominant player. Preventative health was done mostly through screening. A family health practice was being developed with rural and preventative emphasis. 2. There was a possibility the relationship with Lutheran Homes Systems (LHS) could continue. The medical staff office did baseline credentialing. Beyond that, the data gathered by Providence was sent to a credentialing and executive committee of the hospital whose decisions would be presented to a Providence health service area board that had Kodiak representation for physicians and community to make a decision. An option could be for the community board to retain the credentialing status, because it was important for the local community to review quality, and Providence would stand behind their decision. The credentialing process could be as local was wanted. 3. The Consumer Price Index (CPI) was three percent; CPI for health care was seven percent. Providence charges enough to associate stability and sound fiscal operations with an average increase of five percent each year. 4. Focus was on patients with collaboration in areas of preventative care. Providence has 72% of all fee - for - services and PPO services in Anchorage. There were 300 open heart surgeries performed last year. Providence will negotiate an agreement that fits Kodiak with Kodiak's concerns built -in because their mission focuses on community interests. investment i n the infrastructure i.. Yr0vsuence has an L11ve6L.WC11 \. in <.LLC in tele- medicine and data information. 5. The key in working with the local medical community ensures that everything appropriate was done for Kodiak. Providence does not believe in controlling physicians' rights to care for patients. Their focus was quality of care. Kodiak was Special Assembly Meeting August 21, 1996 Volume XXI Page 233 fortunate to have a new building for a goal to maintain for growth. In addition to tele- medicine, physician education opportunities would be strengthened. There would be the ability to provide interim staffing relief. Through an integration process, physicians would be assisted in bringing specialized medical physicians and staff to Kodiak for clinics. 6. Eight residents a year would be trained in family practice specialities, spending time in their third year in rural communities. The advantage was for the residents to receive the reality of order and expense. The community has an advantage in that medical staff would be answering questions from the residents. 7. There was a possibility Catholic hospitals in the Northwest would merge /mesh for low debt in the future of medicine. 8. This question was answered previously. (Assemblymember Milligan left at 1:00 p.m.) 9. The type of agreement would determine the care plan for the community, working with local physicians. Prior to any commitment from the Kodiak Island Borough, there would be a business and strategic plan for the community. 10. Providence's first preference would be to partnership with a private entity. A sale was not usually something that made sense, especially in rural communities. Health and education were two major components of a community. Responding to further questions, Providence's preference was to ensure current employees have an opportunity to fill any open positions. Most of the employees and managers were not impacted by changes unless the hospital was overstaffed. Programs were recommended that did not impact communities adversely. Providence believes in the value of treating every situation as they want to be treated. The transition was most difficult for employees so it was important to educate them to reduce the stress level. Employees were entitled to be part of the process in the transition. Providence was not against considering LHS as a manager but that agreement would be between Providence and LHS. Special Assembly Meeting August 21, 1996 Volume XXI Page 234 Providence offered a nursing program where Providence Hospital was the principle site for training. A relationship with 60 universities provided clinical practice sites. (Assemblymember Hancock left at 1:15 p.m.) EXECUTIVE SESSION McFARLAND, seconded by BURT VOTE ON MOTION Ayes: Noes: Absent: Hancock, Milligan MOTION FAILED Unanimous There being no further business to come before the Assembly, the meeting adjourned at 1:20 p.m. ATTEST: TA /4i b onna F. Smith, CMC /AAB Borough Clerk Approved: 10/17/96 Special Assembly Meeting August 21, 1996 moved to convene into executive session to discuss hospital management financial aspect. None Heinrichs, Burt, Johnson, McFarland, Stevens ens Officer Volume XXI Page 235 KODIAK ISLAND BOROUGH Special Assembly Meeting August 22, 1996 A special meeting of the Kodiak Island Borough Assembly was held August 22, 1996 in the Conference Room of the Kodiak Island Borough Building, 710 Mill Bay Road. The meeting was called to order at 12:10 p.m. There were present: Gary Stevens, Presiding John Burt Suzanne Hancock Robin Heinrichs Bob Johnson Jack McFarland Mike Milligan (arrived at 12:18 p.m.) comprising a quorum of the Assembly; and Jerome Selby, Mayor Donna Smith CMC /AAE, Borough Clerk Joel Bolger, Borough Attorney APPEARANCE BY COLUMBIA HCA HEALTH CARE CORPORATION Representing Columbia were Sharon Anderson, Division Vice President, Columbia Alaska Network; Virginia Collins, Health Care Planning Consultant; and Charlie Miller. Sharon Anderson verbally responded to written questions submitted by the Assembly. 1. Columbia has the opportunity to draw upon lower 48 experiences. Limited assessment approach directs Columbia to the need. Health care must be community based on all health care needs. The future of hospitals will not just be centered around hospitals. Columbia has joint ventured with a number of non- profit organizations and has not taken a "cookie cutter" approach but a local central approach. 2. In May of 1996, Columbia purchased North Star Hospital in Alaska and entered into negotiations to form a joint venture with Charter North Hospital, creating a new entity called Charter North Star. Columbia retained ownership of the North Star physical plant and since the Charter North facility was not available, it would dissolve. Thus, retaining ownership would preclude any disposal. Columbia has yet to find a hospital in the United States operating in a true non - profit sense. Special Assembly Meeting August 22, 1996 REGULAR MEETING ROLL CALL Volume oa Page 236 (Assemblymember Milligan arrived at 12:18 p.m.) According to Columbia, the driving force of any hospital has to be geared towards quality of care. Columbia has over 23% with accreditation at a higher level with only 4% nation -wide. Columbia's commitment to quality has to be number one. Columbia's challenge was for managed care, drawing on all resources. All hospitals have responsibility for charity care by doing the right thing for the right person at the right time in the right location. 3. Columbia looks for "one- stop" shopping. 4. In addition to charity care, Columbia donated monies to organizations, e.g. the American Cancer Society, and encouraged department managers to become involved. 5. Columbia has grown fast, which seems to scare people. Columbia finds affordable health care insurance causes alignment with facilities due to recent federal legislation. Columbia was committed to Alaska. 6. Columbia has acquired 14 hospitals. Columbia was finding trepidation in communities that wanted to keep the physical plant. Joint venture provided continued ownership of physical plant. Columbia works with the community. Columbia prefers ownership or equity stake because of implication the owner would take better care of the plant. However, a lease for the Borough might make the Borough feel comfortable. Columbia was open to discussion on joint venture, though. 7. The arrangement of joint venture was more fully explained.. Columbia felt consolidation was what was right for the community. 8. Performance standards would be written into the contract as well as the way to measure the standards. A separate and distinct board and staff would be based in Kodiak, not answering to Alaska Regional Hospital board or staff. Health care was a local decision. Final say on credentialing and quality of care would rest w itl. tt l board arracc .e loca tf1 wvacis aca.. i.a u .... .... ......�.. .. capital and purchasing of equipment at reasonable costs allowed Columbia to bring equipment to the area. The Medicare reimbursement was explained. Columbia did not think Alaska was large enough to sustain a true HMO. Physicians were willing to reduce health care•costs for more efficiency. Levels of care need to be determined on what the community Special Assembly Meeting August 22, 1996 Volume XXI Page 237 can support. Preventative care was where entities would make money if in true captivated care market. 9. Assessment on reducing costs would undergo review. 10. If high quality patient care was not delivered, patients would be dissatisfied and -that lead to loss of accreditation. 11. The need in Kodiak was for the right treatment at the right time. 12. Given size, Columbia's long -term debt was not too bad with an interest rate at 5.59 %. 13. Columbia recently merged with Health Trust that had a lot of local health care facilities. Most contracts were joint venture, although some were leases. Since 1995, most contracts were acquisitions. 14. Most of the employees in the facilities were investors. Columbia has programs for student nurses from the University of Alaska, med -tech programs, and medical students. Columbia was affiliated with a number of teaching hospitals while also providing education. 15. A joint venture would directly demonstrate a commitment and provide infusion of dollars. The liability in a lease arrangement would be with Columbia. A good risk management division would help identify risks. Employees and medical staff would be involved because in order for physicians to be covered under the policy, they would need to be employees of the hospital. Columbia was involved in insurance for physicians as employees at a low premium. Employees would have no loss of seniority nor a cut in pay as well as choices to transfer to other facilities if they choose. (Assemblymember Milligan left at 1:42 p.m.) Employees would be promoted from within at departmental level. Special Assembly Meeting August 22, 1996 Volume XXI Page 238 EXECUTIVE SESSION McFarland, seconded by Hancock VOTE ON MOTION Ayes: Noes: Absent: MOTION FAILED ATTEST: c a AU na F. Sm CMC/AAB Borough Clerk Approved: 10/17/96 Special Assembly Meeting August 22, 1996 moved to convene into executive session to discuss hospital management financial impact. Hancock Burt, Heinrichs, Johnson, McFarland, Stevens Milligan 1 aye, 5 noes There being no further business to come before the Assembly, the meeting adjourned at 1:55 p.m. Gar Ste s Pre iding Officer Volume XXI Page 239