Trios and Lourdes pull out of Tri-Cities Cancer Center. Kadlec will be sole partner

Kadlec Regional Medical Center is expected to soon be the sole member of the Tri-Cities Cancer Center that was created 25 years ago with all three Tri-City hospitals as partners.

Thursday evening the Kennewick Public Hospital District Commission agreed to withdraw as a member of the cancer center in Kennewick and accept a lump sum withdrawal payment of $341,000 from the cancer center.

Hospital district commissioners have been told that a nearly identical agreement is being worked out for the Lourdes Medical Center membership of the hospital district.

The cancer center has taken out a loan to cover the $682,000 that it expects to transfer to the hospital district and to Our Lady of Lourdes Foundation, the nonprofit associated with the Pasco hospital when it was owned by Ascension, a Catholic nonprofit agency.

The money to pay for the loan will come from the cancer center’s operating fund, which has money from providing services.

An assessment was done of the value of the cancer center before the district and the cancer center reached agreement, but it has not been made public.

“As the sole remaining member of the Tri-Cities Cancer Center (TCCC), Kadlec will be focused on preserving the excellent standing TCCC holds in our community, and keeping cancer care in the Tri-Cities on solid footing going forward,” Kadlec said in a statement Friday.

It is committed to continuing the legacy of the original three-hospital partnership at the cancer center, it said.

Hospitals now for profit

The changes in the membership of the cancer center have been driven by the change in ownership of Trios in Kennewick and Lourdes in Pasco.

The Tri-Cities Cancer Center was formed when Kadlec, Lourdes and Trios — then Kennewick General Hospital — each contributed $415,000 and other fundraising was done to create the nonprofit cancer center in Kennewick to serve patients from all three hospitals.

But Kadlec remains the only one of the three hospitals that is nonprofit. It is owned by the nonprofit, Catholic Providence Health and Services.

The assets of Trios Health were purchased from the Kennewick Public Hospital District, a not for profit local government agency, by the for-profit RCCH HealthCare Partners in 2018, pulling Trios out of bankruptcy. RCCH purchased the assets of the Lourdes Health Network from Ascension the same year.

RCCH then merged with the current owner of Trios Health and Lourdes Health, LifePoint Health, also a for-profit company.

As part of the purchase agreement with RCCH, the Kennewick Public Hospital District agreed to drop its membership in the cancer center to allow RCCH to take over its interest in the cancer center.

Because the hospital district no longer operates a hospital, it does not bring benefits to the cancer center, such as referring patients.

The plan was to find a way for RCCH, and now LifePoint, to participate in the cancer center rather than the hospital district.

But after more than a year of talks, bringing for-profit companies into the membership of the nonprofit cancer center did not prove feasible and agreements to dissolve the memberships associated with Trios and Lourdes were worked out.

Nonprofits receive payments

The nonprofit cancer center cannot distribute money to a for-profit company, only equivalent nonprofits, said Chuck DeGooyer, chief executive of the cancer center.

That means the membership withdrawal payments go to the Lourdes foundation and the Kennewick Public Hospital District, rather than LifePoint.

Kennewick Public Hospital District cannot make a gift of public funds by taking no payment as it withdraws its membership from the hospital district, and the pay out it agreed to accept is close to what it initially put into the center, minus some expenditures, Long said.

The hospital district is required to use the money it receives to enhance health care within the district but is barred from providing services provided at LifePoint-owned Trios Health.

The district does not currently have specific plans for its payout, but commissioners are proposing bringing in-patient treatment and recovery for addiction to the Tri-Cities.

It has commissioned a feasibility study looking at whether the Trios Women’s and Children’s Hospital on Auburn Street near downtown Kennewick could be a possible site. LifePoint is interested in eventually moving services there to its much newer Southridge campus.

The district would not own or operate the addiction recovery center.

“It is disappointing to all of us to have to unravel something that we worked so hard to create,” said district Commissioner Wanda Briggs, after the commission voted unanimously in favor of the agreement ending its membership in the cancer center.

Cancer center moves forward

On the upside, the work done in part by the Kennewick Public Hospital District has left the Tri-Cities with a state-of-the-art cancer center, said Commissioner Mike McWhorter.

“Hopefully, this gives the cancer center now a solid financial foundation they can move forward with,” said commission President Gary Long. “The district was not in a position to maintain its membership.”

The district remains in a position, even though no longer a member, to promote and support the cancer center at some point, he said.

DeGooyer thanked the district for its support through the years and the commissioners, many of whom helped with the startup of the center and have worked with the center for 25 years.

“Health care has changed a lot ... and change is continuing,” he said. “Certain circumstances, like this one, are unfortunate.”

But the center leadership, staff and volunteers pledge to continue providing the same outstanding services of the cancer center, he said.

This story was originally published March 20, 2020 at 12:54 PM.