LUTHERAN QUILTERS – Members of the Quilts for Comfort Group stand between pews draped with some of the 205 quilts they made, in the Sitka Lutheran Church Tuesday. The group made the quilts for five local non-profits and one in Anchorage. The remaining quilts are sent to Lutheran World Relief which  distributes them to places around the world in need, such as Ukraine, as part of Personal Care Kits. Pictured are, from left, Helen Cunningham, Kathleen Brandt,Vicki Swanson, Paulla Hardy, Kim Hunter, Linda Swanson and Sue Fleming.  (Sentinel Photo by James Poulson)

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Daily Sitka Sentinel

Consultant to Suggest Hospital Merger Option?

By SHANNON HAUGLAND

Sentinel Staff Writer

The president of the Sitka Community Hospital Board told the Assembly Tuesday that the consultant working with Sitka Community Hospital and Southeast Alaska Regional Health Consortium will “likely recommend a merger or acquisition” by SEARHC.

 “SEARHC may want to propose that merger to the Assembly,” Bryan Bertacchi, the board president, said at the Tuesday Assembly meeting. Hospital CEO Rob Allen, who is on vacation and on a work trip, usually gives the hospital update to the Assembly, but in Allen’s absence, Bertacchi gave a summary of the most recent talks between the two hospitals.

For the past year, top executives and board members from the two hospitals have been working with ECG Management Consultants of Seattle on ways to consolidate hospital services in Sitka. The initial options considered were “status quo,” “selective and coordinated” cooperation, and a “comprehensive and integrated” system.

 In an interview with the Sentinel this week, Bertacchi said it appears a merger will be the recommendation.

“The real data point is, after a year of effort between the parties about how best to work together, it seems that the first two – joint management agreement and joint venture LLC – will not be recommended,” Bertacchi told the Sentinel. “And the most optimum way of connecting the two entities is a merger by SEARHC. That’s what the consultant is saying.”

He clarified that it may be better defined as a “merger/acquisition.”

ECG plans to finish its report and present it simultaneously to the Assembly and Sitka Community Hospital  Board.

“It will likely say the first two models – joint partnership or joint venture LLC – won’t be recommended,” Bertacchi said.

He told the Assembly on Tuesday that the initial cost for setting up a joint venture is expensive, estimated at $2 million. The city would likely hold less than a 50 percent stake in the venture, and the capitalization requirements are “significant.” Bertacchi said under a “merger/acquisition,” the city would have a voice in SEARHC operations.

City Administrator Mark Gorman said today his understanding is that the city’s representation would be on SEARHC’s accreditation governing body, charged with overseeing all clinical and hospital operations.

“It’s a critical board, it’s empowered with overseeing all accreditation and operational activities of the SEARHC network of clinics and hospitals,” he said.

Allen and top members of the Sitka Community Hospital staff reported at the Jan. 26 hospital board meeting that discussions between SEARHC and SCH were drawing to a close, with no shared vision of what a new entity would look like.
“We were unable to reach a consensus,” Allen said at the time. He recommended against further discussions unless SEARHC expressed an interest in a joint venture model with SCH retaining a stake in the governance of the new entity.

Gorman said today, “The process has come full circle.”

It started a year ago, with SEARHC asking the Assembly if the city would consider a proposal “for the assumption of SCH,” Gorman summarized. The two hospitals then agreed to a collaborative process with a professional facilitator from a firm specializing in hospital mergers and joint operating agreements.

 

“We’ve completed that process,” Gorman said. “It’s been a strong and healthy process, very deliberative. The consultants have been very strong, very professional, and the community has benefited immensely from the last 12 months of discussions: where the community has been, where it’s going, what are the challenges, barriers and opportunities. We as a community will have a great deal more information as we go forward determining the best course to take.”

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20 YEARS AGO

March 2004

Advertisement: Tea-Licious Tea House & Bakery 315 Lincoln Street Grand Opening! Freshly Baked Scones, Cakes & Pastries Innovative Salads, Soups & Sandwiches Harney & Sons Tea. Lunch * Afternoon Tea * Supper.

50 YEARS AGO

March 1974

Photo caption: National Republican Chairman George Bush takes a drink of water offered by Jan Craddick, Sitka delegate, during the Republican convention held here. Mrs. Craddick explained to Bush that the water was from Indian River, which means, according to local legend, that he will return.

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