State poised to green light a new Valley hospital
June 13, 2012
By Michele Mihalovich
The state has given its blessing for the Snoqualmie Valley Hospital to build a new $38.5 million facility, providing they agree to a couple conditions.
The Washington Department of Health on June 6 issued an evaluation of the hospital’s application for a Certificate of Need, indicating a certificate will be issued if the hospital can finalize an agreement with Moreland Pacific, a development firm in California.
The hospital district must also agree to update its paperwork to properly reflect how much it is providing in charity care.
Mark Thomas, the analyst who conducted the evaluation on the district’s application, said the hospital provided more charity care than is required by the state, however, the paperwork submitted didn’t reflect that.
Hospitals are required to meet or exceed the regional average of charity care, which in King County, the average is 1.51 percent of gross revenue and 2.69 percent in adjusted revenue. Snoqualmie Valley Hospital averages 2.04 percent of its gross revenue on charity care, and 4.12 percent of its adjusted revenue.
Jay Rodne, attorney for the hospital district, said the conditions will be met, and he expected the Certificate of Need to be issued within 30 days.
Moreland Pacific will construct the new facility at 34220 S.E. 99th St. in Snoqualmie, and the hospital district will pay a $280,000 monthly lease payment for 30 years.
The district sold its current facility to the Snoqualmie Tribe in July 2008 for $30 million, and the tribe is allowing the hospital to continue to operate in the building. The tribe is currently paying $100,000 a month and will pay the balance in a balloon payment May 1, 2015, expected to come in at about $29 million.
Rodne said the lease to buy agreement is better for the district, financially, than paying off a chunk of the cost when the balloon payment comes in. The lease payments, said Rodne, can be reimbursed by the federal government as a Medicare cost.
The state’s evaluation of the project did note that the hospital district carries a significant amount of long-term debt.
But the figures submitted by the hospital indicate an improvement later when the tribe makes the balloon payment, as well as an increase in revenue generated by a new building, which allows expanded services.
Rodne said the plan for the balloon payment includes having a strategic reserve for the hospital, updating some hospital equipment and paying down some outstanding debt.
“But some of the debt we carry has prepayment penalties, so we’ll have to wait until roughly 2018 to pay off some of that,” he said.
In going forward on the project, Rodne said the construction plans still need to be reviewed by the city of Snoqualmie, and he expects foundation work could begin in September.
While Rodne said he’s pleased that the state has given them the green light for a new hospital, hospital board member Gene Pollard is not.
After the district submitted its application to the state, Pollard wrote a lengthy comment to the state, asking that the application be denied because there are several close by hospital options available to the Snoqualmie Valley.
Thomas said that even though those options are available to Snoqualmie Valley residents, “clearly, many are still choosing to go to Snoqualmie Valley Hospital. So there is a need.”
Pollard said after a June 7 district board meeting, “Just because the state has determined that hospital has a right to build this, doesn’t mean that it’s right.”
Pollard said he is considering his right to appeal the decision, which he has 28 days after the June 6 evaluation to do so.
He said, “I am still studying the application to make sure it was complete.”
Michele Mihalovich: 392-6434, ext. 246, or firstname.lastname@example.org.