Yakima Regional Medical and Cardiac Center will be folded into the second-largest hospital chain in the country if regulators and shareholders approve a $3.9 billion deal announced Tuesday.
Regional has been owned for 10 years by Health Management Associates of Naples, Fla., which Tennessee-based Community Health Systems is proposing to buy in what would create a for-profit chain of 206 hospitals.
Although consolidation of hospitals creates opportunities for efficiencies — which can mean changes in leadership and layoffs — Regional officials said the deal won’t change local operations.
“The most important thing to know about this transaction is that it will not impact any Health Management hospital operations,” Regional CEO Rich Robinson said in a letter to hospital staff Tuesday morning.
Regional, the only open-heart surgery center in the Yakima Valley, has 214 beds and 985 employees. HMA also owns Toppenish Community Hospital, which employs 170.
Tomi Galin, Community Health Systems vice president of corporate communications, said the corporation is looking forward to operating in Yakima. It already owns Deaconess Hospital and Valley Hospital in Spokane.
“We are very excited about the opportunity to expand into other new markets and look forward to supporting the physicians and employees who deliver high-quality health care at HMA’s hospitals in Washington state,” she said.
The acquisition of HMA will likely not be completed until the first quarter of 2014, Galin said, so “It is too early to discuss any possible changes that could occur after the transaction closes.”
Officials at Yakima Valley Memorial Hospital, a nonprofit, had no comment on Tuesday’s news.
George Paul, a Washington, D.C., antitrust lawyer who specializes in the health care industry, said that antitrust regulations likely would not permit Community Health to buy Memorial and thereby control both hospitals in town.
Policy analysts say the nationwide trend toward hospital consolidation in recent years has had mixed results for hospital management and patient care.
The plus side of being a part of such a large system is increased access to resources and capital, said Mary Kay Clunies-Ross, communications director for the Washington State Hospital Association.
“If you’re a hospital that needs a medical records system, it’s almost impossible to do without a partner,” she said. “If you need new diagnostic equipment, new MRI machines, if your building is old ... Health Systems provide a lot of those solutions.”
Access to broader resources also helps large hospital systems recruit physicians and offer competitive salaries, and gives them more clout when negotiating with insurance companies, which many experts say could help drive down costs.
But the potential downside of aligning with a large-scale publicly traded company is the focus on profit, said Aaron Katz, principal lecturer at the University of Washington School of Public Health.
“The danger that we have seen in some instances is that these are for-profit corporations, with investors, so the interest of the owners is to maximize profits,” Katz said.
Whether that’s achieved by increasing revenue through raising prices or bringing in more patients, or by cutting costs through staff reductions or becoming more efficient, depends on the situation. The point is, he said, that “The investors’ interests don’t necessarily align with the community’s or patients’ interest.”
This isn’t Community Health’s first experience in Washington state, though the majority of its current 135 hospitals are concentrated in the Midwest and Southeast, closer to its headquarters in Tennessee.
In 2008, the corporation changed Spokane’s medical culture when it bought Deaconess Hospital, which was struggling financially, and Valley Hospital, according to reports by the Spokesman-Review.
Shortly after the deal, Spokane’s large Rockwood multi-specialty clinic aligned itself with Community Health. The corporation transformed its three new holdings into an integrated system that refers patients to services within its own network rather than sending them to other practices in town.
According to the Spokesman-Review, it was the start of aggressive competition between Community Health and the other medical system in town, Providence Health & Services, which owns four hospitals in the area. The two systems began buying up independent clinics and doctors, creating a sharp division in Spokane’s medical commnity where almost all physicians have chosen sides.
Community Health spent $114 million in four years on new equipment and construction at the two hospitals.
• Molly Rosbach can be reached at 509-577-7728 or firstname.lastname@example.org.