Snoqualmie Valley Hospital pursues affiliation with Overlake Medical Center

After discussions with Astria Health ended, the hospital district continues to pursue affiliation.

After continued efforts to affiliate with Astria Health ended earlier this year, the Snoqualmie Valley Hospital is making another attempt at affiliation, this time with Overlake Medical Center.

At a Sept. 13, regular meeting, the Public Hospital District No. 4 board of commissioners voted to approve the creation of an exclusive, non-binding letter of intent to begin an exploration of affiliation with Overlake Medial Center.

Snoqualmie Valley Hospital CEO Tom Parker explained that since the discussions with Astria Health ended, the hospital and the board changed the way they pursue affiliation. Moving away from affiliation consultants, Parker began reaching out directly to other CEOs and executives at hospitals and larger health care providers to discuss affiliation.

Some of the parties had previously responded to the most recent Request for Proposals the hospital had done in 2017, but they had not continued the process due to some of the challenges the hospital was asking a potential partner to take on, primarily the $95 million in Limited-Tax General Obligation Bonds and revenue bond debt.

Parker reached out to five organizations — University of Washington, MultiCare, Evergreen, Virigina Mason and Overlake. Of those organizations the choices came down to Virgina Mason and Overlake. At the Sept. 13 board meeting, Parker made a presentation detailing the two affiliation models presented by both parties and recommended the board proceed with Overlake.

Overlake proposed a lease and operation structure where it would fully operate the hospital and clinics, whereas Virigina Mason presented a management services agreement meaning it would re-brand and form an executive management team, but not lease and operate the hospital.

“My conclusion was the deal structure with Overlake would best fit the goals the district had in affiliation,” Parker said. “I believe there is more brand name recognition of Overlake in this area. If you look at the market share for the two organizations in this area, Overlake has a much larger market… The acute care market share for Overlake within our district is 25 percent. Virginia Mason has 2 percent.”

Parker said other factors informing his decision included bond rating, revenue, and geographic distance from Snoqualmie.

He also spoke about how the board of commissioners’ potential role under that operating structure could resemble the Verdant Health Commission. Verdant Health Commission was formed by Public Hospital District No. 2 after they stopped running Stevens Hospital in Edmonds when it began operation under Swedish Medical Center.

Under Overlake, the district would form a similar commission for health promotion and education, disease prevention, and it would work with other health and human services agencies in the area.

Parker and staff now are working on crafting a letter of intent, which he hopes will be be done by November. It will go before the board of commissioners for a vote of approval before being sent to Overlake Medical Center.