Today, the Washington Hospital Association, which represents 98 hospitals in Washington State, filed suit in WA Superior Court today alleging that the WA Department of Health had overstepped its authority by imposing new rules that require hospitals to face regulatory scrutiny if they are involved in a transaction which results in a change of control. The rules were imposed late last year after an assessment of past deals made clear that Catholic health systems had regularly and systematically lied about the structure of deals in order to bypass regulatory review. Secular systems that become part of Catholic health care ministries become subject to rules imposed by the local Catholic bishop, which typically include restrictions on reproductive health services and end-of-life care.
A prominent example was Swedish, which became part of Providence Health Services early in 2012. Prior to the deal being completed, officials at Swedish and Providence carefully and artfully described it as an “affiliation” to avoid regulatory review. Within a few months of the deal being completed, Swedish had become a division within Providence, the legal staffs, HR, and communications functions of the two entities had merged, senior employees with the word “ethics” in their job descriptions handled cases and responsibilities across both brands, the Swedish CEO was promoted to become the CEO of Providence, and dozens of senior level management positions had been shuffled between the two formerly separate entities. According to insiders, Swedish now operates as a brand within Providence. (Note to management gurus: When you “affiliate” with someone and they get 14 seats on a board, and you get five, you’ve been taken over.)
Similarly, Harrison Hospital over in Bremerton, which is now part of Franciscan, reported before it was taken over that it would remain “secular” and that it was merely “affiliating” with Franciscan. Now, of course, its web site makes clear that it is part of the Franciscan system.
Highline Medical Center, which was also taken over by Franciscan, also insisted that it would remain secular, but now, according to Becker’s Hospital Review, it is fully integrated into Franciscan.
As a graduate of a Catholic grade school, where I had wonderful English teachers with a love and respect for the English language, it is disheartening to see Catholic health care ministries deliberately try to change the meaning of the word “secular.”
For the record, here’s the dictionary definition of the word:
So it’s understandable why the Catholic administrators lined up to file suit, but why did so many others?
Many of them, including Johnese Spizzo of the University of Washington, have already done deals with a major Catholic health chain where an important part of the messaging strategy is to avoid answering tough questions related to denial of services or comarketing agreements. Others may be hoping that they too can tap into the riches of the Catholic health systems in their own future salary negotiations, and perhaps even pull off what Rod Hochman did, which was to turn over a financially troubled system to a Catholic system, and then be promoted into the top spot. (Catholic health care CEOs are paid handsomely; Hochman’s predecessor as CEO of Providence made $6.4 million in one of his final years.)
When fully half the trustees of the WA Hospital Association work for Catholic organizations or have already formed partnerships with Catholic hospitals, and others are looking at future deals that might prove personally lucrative, they want to ensure the deals they’ve done and the ones they’re planning don’t undergo vigorous review by the state. Pesky questions like “Will women’s health services be limited?” are “Will dying patients have access to Death with Dignity?” are ones that no hospital administrator wants to answer when a fat bonus check for completing a deal might be dangling nearby.