Kennewick public hospital board shifts its focus

No longer tasked with operating a large hospital, leaders of the Kennewick Public Hospital District are focusing their sights on how best to serve the community going forward.

“We will try to make the most impact we can with the money we have,” said Marvin Kinney, commissioner and board president for the Kennewick Public Hospital District. “And that’s going to mean partnering and being innovative.”

The district collects about $1.3 million a year through property taxes, with about 80 percent of this going to the new owners of Trios Health. Tennessee-based RCCH HealthCare Partners bought Trios and Lourdes Health in Pasco last year, but it merged with another health care system called LifePoint Health months later in November and is now known by this name.

After the payment to LifePoint what remains for the district totals about $260,000 a year.

“The purpose of the district is to provide health care services for the citizens of the district, which is a large part of Benton County. Its mission has been that for 50 some odd years now, and that hasn’t changed,” said Leland Kerr, superintendent of the Kennewick Public Hospital District.

“We’re done running a hospital but we still have a district,” Kinney said.

The sale of the hospital system closed in August 2018 and since then, the board has been focusing on tying up loose ends.

The process didn’t end neatly on the day of the sale, as the district had to unwind issues with pensions, workers’ compensation claims and indemnifications.

“We have to redo our policies and take out everything that had to do with credentialing of doctors and procedure. It’s taken us quite a while to get to this point. There was a lot of unknowns and things that popped up that we didn’t expect would come out of the bankruptcy,” Kinney said. “We were kind of in limbo. But now we’re kind of winding to where we know everything and we can go forward.”

The district’s future could include any number of directions, as commissioners vet additional needs of the community that could benefit from the $260,000 a year, above and beyond what is provided by LifePoint.

“We have all kinds of ideas that everyone’s thrown out, from helping Grace Clinic to mental health issues, to expanding adult day services,” Kinney said. “We held workshops, and we had every commissioner say what they think we should do and we put it all together. Or we could go the United Way route — that’s an avenue we could do, too. So, we’re looking at having a facilitator help with our mission and values.”

The United Way is not limited to funding one program or community resource, which means the Kennewick Public Hospital District could consider funding multiple community-based programs.

The district organized in 1948 when the process of building Kennewick General Hospital began. The health system was renamed Trios Health in 2013. The new hospital in the Southridge area was built in 2014.

“They were caught between two pieces — the need and demand for more sophisticated hospital equipment and facilities, which resulted in the Southridge campus, and the downturn in regards to the economy, and the cost of, literally, doing business,” Kerr said. “And unfortunately, that came to kind of a head here in Kennewick. In order to maintain its continuing mission of providing health care services to the citizens of the district, it found the only way to do that was to sell the hospital.”

Some consider the Southridge expansion to be the undoing of the hospital system’s solvency, but Kinney, a commissioner for the last 20 years, said he doesn’t regret the decision.

“I think the Southridge hospital is an excellent location. It’s going to grow. We were ahead of our time. And we just couldn’t catch up. There’s going to be thousands of homes out there, and it’s going to be in a great spot. We just couldn’t hang on,” he said.

Selling the hospital came in August 2018, more than a year after Trios Health filed for Chapter 9 bankruptcy protection.

The sale pulled the hospital out of bankruptcy, with RCCH HealthCare providing indigent and charity care, which is the district’s responsibility.

Since then, “not much has really changed,” Kerr said. “The hospital continues to exist for primarily two purposes. One, is to provide a revenue source for those contracted public services, and the second is, it still considers itself a partner in the area for health care and wellness.”

“We’ve had some criticism,” Kinney said. “People asking, ‘Why do you even exist? Why am I paying a property tax for the Kennewick Hospital District?’ And our answer is No. 1, if we didn’t collect the tax, there may not be a hospital here. And the No. 2 is, let’s see what impact we can make on some of the health issues that face the community,” Kinney said.

Kerr described this new phase as the district “discovering its new mission and its new vision in regards to health care.”

Kinney called the need for a new phase a culture shock, coinciding with the hospital’s sale date. “We had to start from scratch on Aug. 4. We had no staff, no direction. We got together and contracted with Lee Kerr to be our superintendent,” he said.

This was a statutory requirement of the district and had always been filled by the chief executive officer of the hospital.

Kerr’s father was one of the founding doctors of Kennewick General Hospital and he has a longtime personal and professional connection to the hospital.

“One of my earliest recollections was when they were constructing the hospital, and going up and down in the only elevator in the Tri-Cities, which was at Kennewick General Hospital,” he said.

In the early 1970s, Kerr was the hospital’s attorney while his father was chief of staff.

Also an attorney in private practice, Kerr is now one of only two contracted employees of the district, compared to the 1,100 staff it once had.

“The new budget is really, really different than the previous budgets where we were dealing with multimillion dollars because we had revenue sources from not only the taxes, which was a relatively small portion of it, but the operating revenue,” Kerr said. “So you take that part away and the only thing left, essentially, is the tax revenues.”

The district tax levy is 13 cents per $1,000 of assessed property value. This means about $32 annually for a home worth $250,000. Kerr estimated another $35,000 is brought in annually through charitable donations.

“We’re using the tax revenues from (LifePoint) to fulfill that public hospital mission,” Kerr said. “Our primary concern is that they fulfill our public function: indigent and charity care. And the other portion is making sure that we still have the full range of medical services available to citizens. We are funding a portion of the services they provide that are specifically associated with our mission.”

The commissioners have both literally and figuratively rolled up their sleeves to move forward with that mission, organizing a volunteer work party to clean up the outdated offices at 805 S. Auburn St., in Kennewick, on the former campus of the original Kennewick General Hospital. The offices allow for meeting space, file storage and a place to park a phone that can receive inquiries or public records requests.

Kinney has hopes of doing more to improve the space in the future so it may be of more use to the district.

“There are two heroes, as far as I’m concerned, in this,” Kerr said. “One is the board of commissioners, which has had a really rough couple of years. They identified as their primary goal, preservation of the hospital for the benefit of the district, no matter what it took to do so, which I think was a really tough one to accomplish. And RCCH is the second hero. They got into this thing with a lot of optimism and probably an underestimation of what it would take financially to turn the corner, and they have jumped in and taken on a lot of debt that they probably did not have to. They’ve done some things to better the hospital and medical services that were above and beyond what was required. I think both of them have really risen to the occasion under difficult circumstances.”

Commissioners now meet two to three times a month, marking a significant drop in the amount of time required for the seven board members who often met up to 10 times a month to discuss various committee functions.

Board members include Kinney, Gary Long, Rick Reil, Wanda Briggs, Steve Bodgett, Leonard Dreisbach and Mike McWhorter.

“My blood pressure’s gone way down. I recently had it checked and it’s the lowest blood pressure I’ve ever had,” Kinney said.

Now, those meetings can focus on the new mission of fulfilling community needs, whether it’s programs to combat opioid addiction or supporting those suffering from mental health issues.

The next board meeting is at 5 p.m. Jan. 31 at Adult Day Services, 10 N. Washington St., Kennewick.

Kinney said the board intends to seek direction from LifePoint on potential health and wellness needs that aren’t currently being filled.

As the district determines what it will specifically focus on in 2019, the board and its superintendent are approaching its renewed mission with optimism.

“As we looked at closing the door on the RCCH transaction and opening the door on our new vision, a new light lit in our eyes. We got back to the idea with enthusiasm and interest,” Kerr said. “We’ve got a re-energized board. So I’m kind of expecting a lot from them.”

To reach the hospital district, call 509-579-4405 or email lkerr@kenkphd.com. This is a message phone only and replies can be expected within two to three business days.

A website is expected to launch later this month.

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