Health care district shares latest progress with new provider

Commissioners identified Sea Mar Community Health Centers as frontrunner in provider search.

Last Wednesday, nearly a hundred people tuned in to a special meeting hosted by commissioners of the Vashon Health Care district for a check-up on the board’s activities, and to hear if the island is any closer to retaining health care services the community can depend on long-term.

The meeting came as the island’s main health care provider, Neighborcare Health, is poised to leave the clinic at Sunrise Ridge on Oct. 31. Commissioners have identified a new provider that could take over in Neighborcare’s place, Sea Mar Community Health Centers, but negotiations over subsidized clinic services on the island are ongoing and no action was taken at the meeting on any matter.

Determined islanders have spent almost a century trying to bring sustainable, quality health care to Vashon, and keep it here. After the commissioners gave a review of the history of medicine on the island, ending with the work of the Vashon-Maury Health Collaborative, the formation of the health care district, and the commissioners’ extensive search for a successor to Neighborcare, district superintendent Eric Jensen told those in attendance where things stand with the island’s next potential health care provider.

Sea Mar Community Health Centers is a large, community-based federally-qualified health and human service provider (FQHC) located in 11 counties in western Washington. According to their website, Sea-Mar’s mission is to offer services to low-income, underserved and uninsured communities in the region, specializing in services to the Latino population.

Jensen said that Sea-Mar is a good choice for Vashon for several reasons.

Sea-Mar has well-developed specialty referral networks and beneficial partnerships with other providers including MultiCare Health System that he believes will lend well to the needs of islanders. He also touted Sea-Mar’s status as an FQHC, saying that the provider receives higher reimbursements than other clinics for patients covered by Medicaid — which provides health coverage to low-income people — and Medicare, the federal health insurance program for people who are 65 or older.

The health care district board executed a memorandum of understanding with Sea-Mar on Sept. 21 to negotiate an agreement for supportive clinic services on the island. The brief document sketches out preliminary targets for the amount the district would subsidize Sea-Mar at least for the first year and the rough date Sea-Mar would open its doors on Vashon after Nov. 1.

“Basically, this agreement is a starting point. It’s expecting that Sea-Mar will come in and assume operations as they currently are now. And of course, as they get more familiar with the island and the needs of the community, they’ll look at what other things they need to do in the clinic,” Jensen said.

But Sea-Mar anticipates a steep operating loss in its first year and is requesting a $1.5 million subsidy from the health care district, basing that figure on Neighborcare’s experience at the island clinic this year.

Like other community-based health care systems, Neighborcare Health struggled after the state was shut down by Gov. Inslee in March. Neighborcare, however, has shown significant losses at the Vashon clinic since 2017.

In March, CEO Michael Erikson submitted a letter to commissioners requesting $653,152 from the district, enough to help the island clinic break even for the period of December 2019 through June of this year and cover 100% of its actual and projected losses.

Commissioners agreed to compensate Neighborcare for all of its losses directly associated with operating the island clinic on a quarterly basis until Neighborcare leaves the island.

Commissioner Don Wolczko expressed his gratitude for Sea-Mar for making an offer, considering that no other healthcare organizations were able to commit to the island, with most citing the pandemic in their responses to a request for proposal sent out earlier this summer.

“They want to know that they’re not going to be losing money by coming over here,” he said. “Virtually, they’re doing us a favor, because no one else really has come to the table with a solution for us. And they’re willing to give it a go, feeling like it can be a long term solution for us. And we’re feeling that way. Because we have tax dollars to support.”

The district might need a lot of help from islanders to pay for Sea-Mar’s requested subsidy in full. Commissioners of the healthcare district anticipate levying revenue collected from property taxes in 2021 to fund the district. The campaign to establish the district last year suggested that $.40 to $.45 cents per $1,000 of assessed property value would be adequate, though, at the meeting, commissioner Eric Pryne said the board is waiting for information from the county and has not determined a levy rate yet.

The health care district is gathering information on potential impacts its levy could have on island districts, Pryne said, as commissioners put together their budget.

State tax law limits the combined levies of local taxing districts on the island — together they cannot exceed $5.90 per $1,000 of assessed property value. If they did exceed $5.90, so-called junior taxing districts would begin to see their tax revenue reduced. The first to be affected would be the Vashon Park District, which could lose hundreds of thousands of dollars of annual revenue should the hospital district levy, or other levy measures on the ballot, close what margin remains for Vashon’s taxing districts to coexist.

The law allows health care district commissioners to levy up to $.75 cents per $1,000 of assessed property value. Taking it all would almost certainly curtail the park district’s taxing revenue. Pryne, however, said that he did not believe the district would ask for so much.

“I still think we can be — even despite all of these uncertainties, and COVID blindsiding us — that we can have a levy rate that is significantly below $.75 cents,” he said.

But Wolczko expressed great confidence in the tax revenue that will support the district.

In response to a question from an audience member, he suggested the possibility that tax dollars be used to fund construction of a new clinic building, an idea that was widely unpopular with critics of last November’s vote to form the district.

“The idea is that we would have some portion of levy monies that would be retained for capital improvements,” Wolczko later clarified. “So it would probably be something that we would leverage as much as we could with the state’s funding, and then really kind of see what other amounts are needed.”

Financing and developing a new clinic building someday is an agenda item for the district, Jensen noted earlier in the meeting. Last month, commissioners sent a joint letter to 34th District legislators Rep. Eileen Cody, Rep, Joe Fitzgibbon and Sen. Joe Nguyen, asking that the legislature re-appropriate $3 million originally set aside in the 2018 capital budget for Neighborcare to renovate the island’s clinic at Sunrise Ridge or to put toward building a new one.

Pryne said the district is not in a position to make plans with money it does not have yet.

“We don’t know at this point how much money we’re going to have set aside after funding operations and other things. So I’m not ready to say that we’ll be able to pay for a significant share of a capital project from operating levy monies,” he said. “I could be wrong. But that’s my perspective on it.”

The full meeting is available to watch online.

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