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Sudden shutdown: Secret court motion offers no clues about Astria Regional closure

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During a Wednesday hearing in U.S. Bankruptcy Court, attorney Andrew Sherman voiced concern about who wasn’t there.

Astria Health filed a motion to close Astria Regional Medical Center in Yakima under seal late last week, which meant the general public was not able to see the motion. The only people notified of the hearing in advance were attorneys involved in the case and government agencies who were told of the closure earlier in the week.

The hearing was recorded and made available to the public Wednesday.

“When your honor wants to have a complete record, I don’t know how that can be accomplished when unions, trade creditors or employees have not had an opportunity to voice concerns,” said Sherman, who represents the Unsecured Creditors Committee. “There is a disproportionate amount of people who not have an opportunity to understand what is happening.”

Ultimately Judge Whitman L. Holt granted the motion and authorized the closure, acknowledging the disruption and effect it would have on employees, patients and the Yakima Valley community.

Holt said he was granting the motion based on his assertion that Astria Health made a reasonable business decision. He noted that Astria Health has been unable to find a buyer or lender that would enable Yakima Regional to keep operating and end its continued financial loss.

Ultimately, the only result is that the hospital would continue to be subsidized by Astria Health's more viable operations, namely its hospitals in Toppenish and Sunnyside and its outpatient clinics, Holt said.

"Continue subsidization of continued losses of the Yakima hospital by the Sunnyside and Toppenish hospitals poses a risk to patient care and the general viability of those two hospitals," he said. 

As a result, the 463 employees who worked at Astria Regional Medical Center were told about the closure Wednesday, as were the unions who represent many of these employees.

“We are as shocked as you are. We learned of Astria’s plan just this afternoon when notified by their bankruptcy lawyer,” wrote Sally Watkins, executive director of the Washington State Nurses Association, which represents more than 100 nurses at Astria Regional, in a letter to union members posted on its website Wednesday evening.

Astria started winding down inpatient services at Astria Regional on Thursday, and will cease operations there entirely within two weeks. The organization said it had lost more than $40 million since purchasing the hospital in August 2017 and had exhausted its options.

Astria’s other hospitals in Toppenish and Sunnyside will remain open. Astria Health will continue providing primary and ambulatory care in Yakima through its Astria Ambulatory Surgical Center, Astria Health Services, Astria Plastic Surgery Center, Astria Home Health & Hospice and Astria Hearing & Speech Center.

Astria officials did not respond to questions Thursday from the Yakima Herald-Republic. No information about the hospital closure was available to patients on its website. A closure plan was included in court filings.

Watkins further expressed her concerns in a letter she sent Wednesday to Astria Health CEO John Gallagher.

“By choosing to shut down Yakima Regional on only a week’s notice, you have severely hampered nurses’ and other employees’ ability to cope with such a momentous derailment of their career,” she wrote in the letter, which was also posted on the union website. “WSNA is actively examining and will pursue all remedies available under its contract and federal and state law for Astria’s actions.”

Astria Health said that it would work with employees to secure positions with its other facilities, including its hospitals in Toppenish and Sunnyside and its Astria Health Centers. In a bankruptcy motion, Astria Health said it is planning to hold job fairs for affected employees.

Astria Health did not respond to the Yakima Herald-Republic questions on whether laid-off employees would receive severance or other benefits.

Amy Clark, spokeswoman for the Service Employees International Union 1199NW, which represents employees at Astria Regional, said they received notice of the closure Wednesday. The union did not receive any information regarding severance or other benefits.

“We recently learned of the planned closure of Astria Regional Medical Center and are disappointed that Astria Health was unable to find a buyer for this vital community resource,” Clark wrote in an e-mailed statement. “Members of SEIU Healthcare 1199NW work incredibly hard every day to provide the best care they can for their patients at (Astria Regional) and will continue to do so right up until the hospital closes. As a union, we will do everything we can to assist our members in finding new employment opportunities.”

Meanwhile, Yakima Valley medical providers, such as Yakima Valley Farm Workers Clinic, have already seen an influx of job applications.

“We are one of the legitimate places where people are going to be applying and looking for jobs if they don’t want to move out of the area,” said CEO Carlos Olivares. “We already are seeing a huge influx of applications coming our way, and we don’t have a lot of posted positions in the system, so it just creates an incredible amount of extra work and stress for our teams.”

Such an influx has become even more challenging with the short notice of closure, he said.

“We have a policy that we have to respond to people who inquire about opportunities in our organization,” he said. “We are respectful to people who are seeking employment with us, so we have to build a response now, and we would have been better prepared, of course, for these eventualities if we understood early on what (Astria Regional’s) strategy was.”

Janelle Retka and Lex Talamo contributed to this story.

Reach Mai Hoang at maihoang@yakimaherald.com or Twitter @maiphoang

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