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Officials ponder what’s next after Harrison’s announced move
BY KEVAN MOORE
Bremerton Mayor Patty Lent wants to engage Sen. Patty Murray and Rep. Derek Kilmer in conversation about housing a veterans hospital at Harrison Medical Center Bremerton when Harrison moves its acute care services to Silverdale.
The move is expected to happen in the next three to four years, Harrison President and CEO Scott Bosch announced May 23.
Not a farewell
Bosch said Harrison’s board of directors is still evaluating what outpatient services will continue to be offered in Bremerton.
“The board is not willing to abandon Bremerton,” Bosch said. “We are not going to leave Bremerton. We are going to be here in a significant way.”
What that presence will look like is not yet clear, but it could include some urgent care services, wellness programs and medical specialists.
Lent, who spoke privately with Bosch ahead of the announcement, said she was shocked by the proposed move and hospital closure.
“It’s hard for me to separate Harrison from the city and that’s what I feel is the proposal that they are making,” Lent said.
Lent said her first calls after her visit with Bosch went to Murray and Kilmer.
“That was my first reaction because I just couldn’t see that hospital vacated,” she said. “I just couldn’t see that.”
Lent noted that the hospital is exempt from property taxes and business and occupation taxes. She said the hospital only brought in about $80,000 in sales tax to the city last year. Those revenues have spiked whenever the hospital underwent any sort of construction, but Lent’s real concern is with businesses surrounding the hospital.
“I’m looking at citizens, surrounding businesses, doctors and clinics that have built or remodeled and are there because of the hospital,” she said. “It has a bigger ripple effect than I think a regular citizen might think about. I’m a big-picture person, and I’m looking at the future, and I’m looking at that ripple effect.”
Costs drive decision
While a final decision has not been made, Bosch said the move to have just one hospital makes sense financially and strategically. Harrison is preparing to invest $220 million to $240 million to expand the Silverdale campus in the next 36 to 48 months.
“We operate two hospitals seven miles apart,” he said. “Can you imagine how much duplication there is between those two hospitals? We have two kitchens. We have two X-ray departments. We have two laboratories. We have two emergency departments. Two registration areas. Two operating suites. And it becomes incredibly duplicative for us to operate those things.”
Bosch said more people are showing up in Silverdale with trauma and then have to be transported to Bremerton’s trauma center after being stabilized. Pregnant women show up in Bremerton a lot, but the birthing center is in Silverdale.
“The public is confused about what to do, where to go and where to seek care because we have two growing campuses,” he said. “It’s not a long-term, viable situation. In fact, we believe that by combining two campuses into one campus on the Silverdale campus we would save somewhere between $10 million and $15 million a year and that’s conservative, it will probably be more than that.”
Having just one hospital in Silverdale will also allow patients to have their own private rooms. About two thirds of patients in Bremerton are forced to share a room with other patients. The hospital campus in Bremerton sits on about seven acres and lacks adequate parking. Bosch said spending $110 million to $130 million to renovate the building doesn’t make sense.
“That’s more money than we think that we have to put into an old building,” he said. “The plumbing, electrical, HVAC are all deteriorating to the point where we have floods, power outages and problems with heating and air conditioning.”
He later added, “In 1965, this was a great location. In 2014 it’s not.”
Many factors at play
Bosch said the Great Recession, changes to Medicare and Medicaid, an aging population, and the Affordable Care Act, which “truly is having a huge impact on us,” are all driving the decision to locate a single hospital in Silverdale. There has been a nearly 25 percent reduction in hospital admissions since 2008 and profits have seen an even more dramatic decline. In 2008, the net operating income percentage was nearly 7.5 percent. Today, it’s at about 3.5 percent and is projected to dip to under .5 percent by 2020. With a single campus in Silverdale, though, hospital officials are projecting to be at just over 2 percent in 2019 and 2020.
“When our board saw (these numbers), they said, ‘Well, we really don’t have much choice at this point,’” Bosch said. “Running a two-campus system with its inefficiencies and duplication, and the age with what needs to be pumped into this (Bremerton) facility, the change is so dramatic that we have to grab control of the cost of the situation.”
Bosch noted that in 2005, 70 percent of Harrison’s revenue came from inpatient hospital care. This year, for the first time, that number dipped to 49 percent.
“That’s a massive change that has driven us economically for the first time in history,” he said. “Ambulatory, outpatient care is much more important financially and better for patients. There has been a huge push to keep people out of hospitals because it is so expensive for people to receive care in the hospital setting.”
A major employer
Harrison has about 2,500 employees at 28 sites. At the hospital in Bremerton, there are 511 part-time employees and 765 full-time employees. The hospital in Silverdale has 245 part-time employees and 100 full-time employees. Bosch says a reduction of duplicative services will shrink the workforce, but an expansion with new buildings will expand it.
“There’s a balancing effect there,” he said. Bosch also noted that Harrison’s board of directors has been looking at various options as part of its “Vision 2020” long-term planning effort, prior to partnering with the Franciscan Health System.
“This project was not driven by the Franciscan Healthcare System,” he said. “They weren’t the drivers. They are, however, going to be the financiers.”
Bosch said the time is right for such a big change.
“It’s just a changed world and in many ways it’s a better world to do this,” he said. “We’ve waited long enough where this will make a lot of sense to the physicians and I think to the community. What we’re going to provide them is a much better healthcare solution.”
Bosch said Harrison will work with the city of Bremerton, Kitsap County and the public to figure out ways that the Bremerton facility can remain viable.
In the end, Bosch said the change is part of an ongoing effort to increase wellness and streamline healthcare.
“This is what the people of the whole region ought to be focusing on, is their health, rather than if they have a hospital in their backyard. Having a major medical center in the center of the county that’s really only 20 minutes from most parts of the county, even Bainbridge Island is not that far, is an amazing thing and I hope the community understands,” he said.
Kevan Moore is a reporter for the Bremerton Patriot.