Lourdes is for sale. Kadlec objects. Future of Tri-City health care called into question

Kadlec Regional Medical Center is objecting to the sale of a competing Tri-City hospital system, saying the proposed terms make it risky for the community.

The deal leaves the door open to major changes at Lourdes Health in Pasco, including a reduction in its commitment to helping the low-income and elderly, elimination of services and even the closing of facilities, said Kadlec in documents filed with the state.

But Kadlec’s comments are wrong and misleading, said RCCH HealthCare Partners, which is in the process of buying Lourdes and also is considering buying Trios Health in Kennewick.

“We find it extremely disappointing to be required to respond to the rhetoric and allegations leveled by Providence in its comments,” wrote Tennessee-based RCCH. Kadlec is part of the Providence St. Joseph Health network.

The war of words flared up as part of the state’s review of the Lourdes sale.

The state Department of Health is expected to decide this summer whether to approve the proposed deal, reject it or require changes.

‘Illusory’ representations

Kadlec and Lourdes share the goal of providing high-quality, cost-effective services to the community, Kadlec wrote in documents submitted as part of the state review process.

But the structure of the deal means significant changes could happen in a relatively short period of time, including closing the Lourdes hospital and/or behavioral health center, reducing or eliminating services, ceasing participation in the Medicare and Medicaid programs, and reducing commitment to charity care and community benefit programs, Kadlec wrote.

For example, RCCH is only required to continue operating Lourdes Medical Center as an acute care hospital for five years under the deal, Kadlec noted.

After that — or even sooner, depending on the interpretation — it could do whatever it wants with the hospital and its services, said Kadlec.

And the deal for Lourdes Counseling Center doesn’t require RCCH to keep operating that facility for a minimum length of time, or at all, said Kadlec.

It’s a similar story when it comes to participation in the Medicare and Medicaid programs, Kadlec said. Those programs provide coverage for the low-income, disabled and elderly.

And, Kadlec said, the deal leaves room for RCCH to make “material” changes to Lourdes’ charity care policies.

That’s particularly concerning given the company’s record in the Northwest, Kadlec said.

The state attorney general’s office filed a lawsuit last year alleging Capital Medical Center in Olympia, which is owned by RCCH, withheld charity care from thousands of low-income patients, Kadlec noted. Capital Medical Center is contesting the allegations.

The hospital also has had other charity care issues, the Kadlec documents said.

And Willamette Valley Medical Center in McMinnville, Ore., saw a significant drop in charity care after Capella Healthcare — now called RCCH — took over, the Kadlec documents said.

In Washington, hospitals have to make free and reduced-cost care available to low-income patients, and they have to let patients know they can apply.

If Lourdes stops operating the way it has for decades, “the community will be at risk,” Kadlec officials wrote.

“Moreover, a change in their traditional role will have substantial impact on Kadlec and the other health care facilities and providers in the community, who will be required, within a short timeframe, to fill in the gaps created by any chance in (the hospital’s) and (the counseling center’s) mission and services.”

RCCH’s representations that it will continue Lourdes’ long-standing community mission are “illusory” given the terms of the proposed deal, documents said.

‘A good partner’

RCCH officials have said they’ll invest $18 million in Lourdes during the next five years, on top of the $21 million they’ll pay to buy the system.

It makes “absolutely no sense” to do that and then close Lourdes, RCCH officials wrote in their rebuttal.

Also, it’s “nonsensical” to think that opting out of Medicare and Medicaid — both significant payers in Franklin County — would be prudent, the rebuttal said.

RCCH also called out Kadlec as hypocritical, saying the proposed deal that Kadlec now is criticizing is similar to — if not better than — one Providence struck when it sold its Yakima and Toppenish hospitals in 2003.

“Providence cannot have it both ways,” the rebuttal said. “To now suggest that terms more beneficial to the community (than in Providence’s 2003 deal) do no represent ‘a long-term commitment’ is simply disingenuous.”

RCCH also noted that Kadlec became part of Providence through a process that didn’t require the same kind of state review, so “Providence made no public commitments whatsoever in regards to continued operations at Kadlec” as part of the transaction.

RCCH also took issue with Kadlec’s charity care concerns.

Capital Medical Center and RCCH officials cooperated with the state attorney general’s office and believed they were on the path to resolution when the lawsuit came, RCCH said.

And, independently, the hospital “reviewed all of its charity care policies and procedures and made changes necessary to bring (them) into conformity with the (attorney general’s) interpretation of the charity care law,” the rebuttal said.

The hospital intends to “defend the matter vigorously” while continuing to monitor its practices, the rebuttal said.

RCCH also said Providence itself recently was sued over charity care issues, referring to a case involving a Spokane hospital.

And RCCH said the Willamette hospital provides more community benefit than the “most similarly situated” Providence hospital in Oregon, according to more recent data.

“This data supports the proposition that Capella is a good community partner and provides significant benefit to the communities its serves,” the rebuttal said.

The proposed sale meets all applicable rules and will mean the continued existence of Lourdes, “assuring choice and access to care in one of the fastest growing areas of (the state),” the rebuttal said.

Continued cooperation

Lourdes is the oldest health system in the Tri-Cities, dating back to 1916. It includes a downtown Pasco hospital and a Richland behavioral health facility.

Lourdes currently is owned by Ascension, a large Catholic health care network. But Ascension is shifting focus to bigger metro areas, meaning Lourdes needs a new partner.

Capella Healthcare, which later merged with RegionalCare Hospital Partners to become RCCH, stepped up. The deal has worked toward completion the last few years.

At public hearings in March, more than two dozen people spoke in favor of the Lourdes sale, from current employees to community members.

And nearly 30 letters of support were filed with the state. Kadlec’s was the only one in opposition, RCCH officials said.

RCCH was disappointed by Kadlec’s last-minute objections, officials said in a statement.

They also said they were surprised because they believed Lane Savitch, a top Kadlec leader, had indicated to state officials that the organization was neutral or supportive.

“We are excited about the opportunity to invest nearly $40 million — between purchase and capital commitments — in Lourdes Health and work alongside their great team of employees and physicians to continue to serve all the people of the Tri-Cities region,” the company said in a statement.

Savitch, chief executive of the Providence service area that includes Kadlec, attended one of the public hearings.

But he never indicated a position, he said — and he’s disturbed by RCCH’s claim that he did.

“It’s very disturbing to me than an organization would be so blatant about mistruths,” he said.

Kadlec wants to see Lourdes continue and thrive, Savitch said.

His organization spoke up because “it was really our belief that the (agreement) needed to provide some assurances to the community that the same level of charity care would be provided, that the level of care for the community (would remain the same)” and that behavioral health services would continue, he said.

“If that could be assured, we’d look forward to continuing the great relationship we’ve had with (Lourdes) for as long as we’ve been here,” he said.

This story was originally published April 6, 2018 at 6:34 PM with the headline "Lourdes is for sale. Kadlec objects. Future of Tri-City health care called into question."