State approves Kennewick hospital sale

Trio Health could be in new hands soon.
Trio Health could be in new hands soon. Tri-City Herald file

Kennewick’s financially troubled public hospital system should be in private hands by early next week.

State regulators on Friday afternoon finished their review and gave their stamp of approval to the sale of Trios Health’s operations and assets to RCCH HealthCare Partners, officials from Trios and RCCH confirmed.

That clears the path for the sale to close Tuesday.

“We’re honored to come alongside the hospital district board and the 1,100 employees and physicians at Trios Health,” said Jeff Atwood, RCCH spokesman. “They have been through an incredibly challenging time over the last year. Their ability to focus on taking care of patients has never changed.”

Marv Kinney, president of the Trios board of commissioners, also praised Trios’ providers and employees.

“They kept with us. They provided quality care” through the long process, he said.

“(The sale) is something we’ve been working for. We’re looking forward to the future of the hospital,” he said.

At a meeting Thursday night, Kinney and fellow commissioners took steps to prepare for the changes coming down the pike, including approving a resolution that authorizes the sale.

Commissioners also talked about the future.

“This is a great success story. Even though the outcome is not the original path that we hoped for with the new (hospital) facility, the outcome I think is going to be very positive for the community,” Commissioner Gary Long said.

Trios entrance.JPG
Trios Health in Kennewick could be in new hands early next week. The sale to RCCH HealthCare Partners could close Tuesday. Bob Brawdy Tri-City Herald

Commissioner Wanda Briggs agreed.

“There are some mixed emotions here. We weren’t quite sure where we were going when all this started. But I really believe RCCH is going to be the right owner of this hospital, at the right time in its history,” she said. “I think there is much to be enthusiastic about. This is a change. A new flag goes up. A change is not always easy, but change sometimes can be really for the best.”

The sale will mark the end of a difficult period for Trios Health, which dates to 1948.

For decades, the public hospital system grew. But in more recent years, as health care changed, competition mounted and the original Trios hospital in downtown Kennewick aged, trouble brewed.

Trios pushed forward with a new Southridge hospital and an adjoining outpatient center, believing they were needed to keep up and thrive. A feasibility study projected revenues would grow enough to make up for the increased costs.

But that didn’t happen, and the financial woes worsened.

The Trios board hired consultants Quorum Health Resources to help chart a path out. That path included filing for Chapter 9 bankruptcy protection last year. It also included exploring a sale, with RCCH emerging as the buyer.

The purchase by RCCH will mean the presence of UW Medicine in Kennewick.

The two organizations have a public-private partnership to run community hospitals in Washington and beyond, with RCCH handling operations and management and UW providing clinical expertise.

Trios Commissioner Mike McWhorter highlighted that Thursday.

“The affiliation with UW — we tried for years to get this done. Now all of a sudden you bring a strong partner like (RCCH) — they brought it to this community,” he said, adding that, “RCCH is going to bring some great talent in here and run this hospital to the next (level) that we could not do.”

Commissioner Rick Reil spoke of his hope for the days ahead.

“You have an organization coming in here that will reinstill confidence, that will be able to have the capital necessary to build this place up to where we had hoped. I think the community is going to see some good changes,” he said.

The Kennewick Public Hospital District — which is governed by the board and has operated Trios Health — isn’t going away.

It will continue to play a role in local health care and collect property taxes, with the money covering costs such as education efforts, indigent care and resolving future Medicare billing disputes.

This year, it collected $1.4 million.

Local attorney Lee Kerr has been chosen as superintendent, in change of district administration.

Meanwhile, another Tri-City hospital also is on track to become part of RCCH.

The Pasco-based Lourdes Health Network is exploring “new strategic relationships and potential affiliations” after more than a decade as part of Ascension Health. Tri-City Herald file

The state Department of Health is reviewing the company’s proposed purchase of Lourdes Health in Pasco.

That decision is expected in mid-August.

The Lourdes review has been going on longer, but Trios qualified for a speedier emergency review because of its precarious financial situation.

Meanwhile, the Tennessee-based RCCH is in the midst of some changes itself.

The company, which is owned by funds managed by affiliates of Apollo Global Management, is merging with LifePoint Health, also based in Tennessee.

The new privately-held combined company will go by the name LifePoint Health, a news release said. That deal is expected to close over the next several months.

Atwood, from RCCH, said it won’t affect either Tri-City sale.

He also said that several RCCH and UW leaders will be at Trios on Wednesday, the day after closing, “to officially welcome Trios to the family.”

Sara Schilling: 509-582-1529, @saratcherald