Stevens Hospital finances ‘fatally flawed,’ CEO says

  • By Chris Fyall Enterprise editor
  • Thursday, June 19, 2008 7:05pm

Explosive rhetoric marked a 90-minute discussion between Edmonds councilmembers, primarily DJ Wilson, and Stevens Hospital officials June 17, as a planned 30-minute update instead took three times that long, and heated exchanges occasionally shocked a gasping audience.

What started as a presentation about the hospital’s financial difficulties devolved into defensiveness and finger-pointing before it veered into Wilson’s personal life.

Stevens officials did say it was unlikely the hospital would abandon its eight-acre site in Edmonds.

“To pick it all up and move it somewhere else is not a sensible thing to do,” said Commissioner Fred Langer, an Edmonds resident. “It is possible, but it is not likely.”

The meeting’s subject was not as interesting, however, as its fireworks.

Near the end of the long discussion, Langer pointed out that Wilson, a recent hospital critic, chose in May to have his newest child at Seattle’s Swedish Medical Center, not at Stevens. Wilson heatedly replied that he didn’t trust Stevens’ medical team.

Wilson went farther. When his child fell and needed emergency attention this month, Stevens didn’t impress, Wilson said. He accused doctors of repeatedly calling his son by the wrong name, writing Wilson’s birthday on his son’s medical records, and failing to write a prescription.

The meeting started more simply.

The hospital’s financial troubles are deep, CEO Mike Carter said. Its competitors are strong, its tax support is weak and its facilities are growing older every day, he said.

Stevens needs more money to compete — money it simply does not have, but absolutely must get, he said.

“This organization is dying, and I fully intend to do something about it,” said Carter, who called the hospital’s day-to-day operations strong, but said its balance sheet was “fatally flawed.”

The hospital could ask taxpayers for more money, or it could partner with other health care institutions like Everett’s Providence Medical Center or Seattle’s Swedish, he suggested.

The hospital’s list of needs is long and expensive, officials said. In addition to Langer and Carter, Commissioner Chuck Day and chief financial officer Rick Canning attended the meeting.

A new hospital could solve many problems, but would cost about $340 million, Day said. A smaller renovation could solve some problems, but would cost $120 million. Regardless, needed technology and program developments will cost $35 million in the next six years, he said.

Langer is skeptical that taxpayers would foot any of those bills in tough economic times, he said. He cited Mukilteo’s overwhelming 1995 rejection of a measure that would have incorporated the city into Stevens’ district as an indication of a lack of voter support.

The hospital serves about 80,000 voters in the cities of Brier, Edmonds, Lynnwood, Mountlake Terrace, as well as Woodway and surrounding unincorporated areas.

The meeting heated up when councilmembers began asking questions.

First, Councilmember Ron Wambolt questioned the hospital’s reluctance to ask for any taxpayer money since the 1990s, and suggested the hospital might be overstaffed, a concession Carter conceded might be true. Carter said staffing was a very small part of the financial problem.

After Wambolt was finished, Wilson suggested the hospital’s real problem is patient perception — a characterization promoted by Stevens officials themselves — caused in part by a lack of transparency — a characterization of Wilson’s they have strenuously disagreed with in the past.

As Carter listened to Wilson’s claims, he paced anxiously behind the council podium, his head vigorously shaking. When Carter responded, he smiled and spoke calmly, but used sharp language to call Wilson’s statements misleading. He suggested Wilson was not fully informed, a charge which ratcheted the room’s tension.

In response, Wilson repeatedly asked Carter and other officials what the hospital had done to improve patient perception, a question that was never directly answered.

Mayor Gary Haakenson and acting council president Deanna Dawson eventually interrupted. Dawson said she was troubled by the tone of the questions.

Ultimately, Langer defended the hospital’s record — and its management.

After years of losing money, Stevens has finally stopped the bleeding. In other ways, too, the hospital has improved, he said.

“And the whole transformation that we’ve gone through has had as a cornerstone transparency and honesty,” Langer said.

Reporter Chris Fyall: 425-673-6525 or cfyall@heraldnet.com

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