One step closer: Samaritan approves structure of potential Confluence affiliation

MOSES LAKE — Samaritan Healthcare and Confluence Health took a substantive step forward in the process of forming an affiliated health care organization in Moses Lake Tuesday.

The Board of Commissioners of Grant County Public Hospital District No. 1, which owns and operates Samaritan as a government entity, signed a memorandum of understanding (MOU) Tuesday afternoon that outlines the basic structural, governance and financial terms of Samaritan’s potential affiliation with Confluence Health.

The signing of the memorandum does not make the affiliation official yet, but representatives from both organizations recognized the move as a step forward in the process of developing a partnership.

The hospital district’s Board of Commissioners convened for a special meeting at Samaritan. The commissioners were joined by legal counsel and Confluence representatives to explain the basic parameters of the MOU to a crowd of about 20 meeting attendees.

Confluence’s Board of Directors was scheduled to hold a meeting Tuesday evening to consider approving the memorandum of understanding. Confluence CEO Peter Rutherford said he anticipated the Confluence board would join Samaritan in approving the memorandum.

The next step in the process is developing definitive legal agreements for the potential Samaritan-Confluence affiliation — basically, agreeing on the details of the partnership. The MOU outlines what the basic structure and governance of an affiliated organization would look like, but the definitive agreements will fill in all the blanks. According to information released by both Samaritan and Confluence, that process is expected to take several months.

Howard Thomas, joint counsel for both Samaritan and Confluence, explained that the memorandum of understanding accepted Tuesday lays out a structure in which Samaritan integrates with Confluence’s Grant County operations.

If the affiliation is eventually finalized, Grant County Public Hospital District No. 1 will lease all of its real estate assets, including Samaritan and its clinics, to a new company that will be created as a division of Confluence. All of Samaritan’s current employees will be transferred to that new company with the same salaries and principally the same benefits, Thomas said, except for physicians. Samaritan’s current physicians will transfer to the Wenatchee Valley Medical Group, which Thomas said is a “professional corporation that houses all of the physicians within Confluence.”

Brad Berg, an attorney for Foster Pepper that is serving as legal counsel for Samaritan, explained that the established affiliation structure is just another way for the hospital district to provide health care services to its residents. Currently, the district owns and operates Samaritan, but if the affiliation takes place, it will lease its facilities to Confluence and monitor the lease to assure services continue to be provided locally.

“What that really represents, if it were to go forward, is a decision by the board to change the manner in which it wants to assure that health care services are provided to the residents of the district,” Berg said.

“As a result, the role of the board will shift from being involved directly in the operation, to monitoring the terms of the lease and the other agreements to assure that health care services continue to be provided to district residents.”

Thomas said as for governance, Grant County will be “well represented” in the Confluence structure. The district commissioners will appoint two individuals to serve on Confluence Health’s Board of Directors, which already has two Grant County residents.

“Part of the idea here was to really make sure that the commission is still fully involved in Confluence and have a voice at Confluence as the organization continues to grow,” Thomas said.

There are checks and balances built into the MOU, too. For instance, if Confluence wanted to eliminate a service currently offered in Moses Lake — which, Thomas said, is “not even remotely part of the discussion” – but if that were the case, the hospital district’s Board of Commissioners would have to approve. Likewise, Confluence will get the final say on expansion or addition of services since it will be providing the capital for such ventures after the affiliation takes place.

The memorandum of understanding indicates that the hospital district will lease its facilities to the new Confluence division in Moses Lake for 30 years, with two 10-year options to extend the lease. This provides a long enough time period for true integration to occur, Thomas said.

Collectively, the two organizations really have an opportunity to improve and expand health care provisions locally, Thomas said.

“Together, you really have a nice footprint geography-wise and also a good complement of services with a lot of multi-specialty physician groups combining with a hospital system,” he said. “From there, you can have cradle-to-grave care, if you will, that covers all aspects, and that’s the kind of integration that policy makers are looking for as we try to improve quality and value.”

That’s what the affiliation is all about, Sullivan said — improving local access to high-value, high-quality care in Moses Lake and north central Washington.

“It’s easy and needed to look at all of our agreements and the details of what the transaction is, but I think … at the forefront is, what does it mean for our community and what does it mean to the people of the district that we serve?” Sullivan said. “The goal of the whole thing is really to improve those services and really to grow Moses Lake as a (health care) hub.”

Berg reiterated Tuesday that the approval of the memorandum of understanding marks a step toward the affiliation, but in no way is it a finalization of a partnership. He said the MOU is the beginning of the process, as it is “an expression of intent by both the district and Confluence to explore affiliation, and it identifies a structure.” Neither organization is legally bound to affiliate at this point.

Confluence CEO Rutherford was among those on hand Tuesday at Samaritan. He said the potential affiliation is exciting for local residents.

“I think this is a great thing for the Moses Lake community and it’s a great thing for north central Washington,” Rutherford said. “I think it sets us up in a way to … lead locally what health care is going to look like for the next several decades in this community. We won’t be answering to decision makers outside this region.”

“Our goal is to be able to provide as much locally led care as possible in a long-term, viable manner so patients do not have to travel.”

Sullivan echoed similar sentiments. She said what is most exciting is the opportunity to expand and improve health care locally so people in the area don’t have to seek care outside of the region.

“I’m pretty passionate about the idea of growing services in Moses Lake,” Sullivan said. “To me, this is the only way that we are going to be able to really effectively grow service in Moses Lake.”

“This is a tremendous opportunity to enhance our existing services and improve access to care, which the people of our community deserve.”

Samaritan Healthcare commissioners Julie Weisenburg, Dale Paris, Alan White, and Joseph Akers voted to approve the affiliation MOU. Commissioner Tom Frick abstained.