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Task force takes up CPH governance

Posted: Monday, January 03, 2011

A New Year's resolution for the Kenai Peninsula Borough during 2011 may well be to make a decision on the future of the Central Peninsula Hospital.

And the recently formed CPH task force seems to be on track to make this resolution successful.

Kenai Peninsula Borough Mayor Dave Carey said the task force should be ready to make a recommendation on the hospital to the borough assembly this spring.

"In April I would anticipate we'll see what everyone thinks whatever the recommendation is," Carey said. "An option could be that there will be no change. That the community hospital we have now will remain a community hospital."

Currently, the borough owns CPH. The borough leases the facility to the nonprofit corporation Central Peninsula General Hospital Inc. An 11-member board governs the hospital, but the borough assembly must first approve major capital decisions. A separate Central Kenai Peninsula Hospital Service Area Board serves as an advisory board to the borough assembly and administration.

Early last year CPGH Inc. enlisted a leading health care organizational consultant, James Orlikoff, to evaluate the hospital's current governance.

He said the hospital's public governing process is inefficient and not conducive to the evolving health care industry.

That's what led the hospital's board to begin the process of vetting several governance options with the help of a $25,000-per month investment banking firm.

After months of deliberation, the board recommended a joint venture partnership with Texas-based LHP Hospital Group, saying it believed the 50/50 ownership and control arrangement to be in the hospital's best financial interest.

But the borough assembly failed to introduce the ordinance that would have allowed CPGH Inc. to sign the letter of intent to partner with the for-profit firm in a 5-4 vote in early September after public testimony against the partnership.

"After two-plus years of research and accepting proposals from different companies the CPGH Inc. board said this is where we think the hospital should go in the future and the assembly said no," Carey said.

So Carey proposed the task force, which was approved by assembly action, to look at all the options -- and 740 pages of accompanying documents -- the hospital board considered.

"I wanted to make sure we got as much as we could from that knowledge," he said.

The eight-member task force is comprised of relevant community members. In early December the group had its first meeting to identify agenda items, schedule dates and times and get the next step in the hospital saga started.

"What we particularly wanted, we wanted enough time that the public can be educated and have the ability to be at all the meetings," Carey said.

And that's what Central Peninsula Hospital CEO Ryan Smith wants too.

"We always wanted to have the opportunity to have that public dialogue," he said, but, "we couldn't get our recommendation introduced through an ordinance to allow that public process to take place."

Smith said CPGH Inc. fulfilled its responsibility. And although he agrees with the board's recommendation he is very interested in what the task force's proposal is going to be.

Gary Knopp, Kenai Peninsula Borough Assembly President and designated CPH task force leader, said the task force would be reviewing different governance options for the hospital.

Those options include selling, privatizing, leasing or merging the hospital, as well as a considering a joint operating agreement and a whole hospital joint venture, like the board's recommendation of partnering with for-profit LHP.

He said that while some people were disappointed with the assembly's vote not to introduce the ordinance on partnering with LHP, those disappointed were few in numbers to those who supported the decision.

"That was a good decision there," Knopp said. "We would have been really remiss to support that without doing our due diligence on all the options."

He said that throughout the upcoming task force meetings he really wants to understand how the hospital's governance will be impacted in the future by changes in the health care industry.

The decision on the hospital's governance should be "what's good for the hospital and what's good for the community not what's good for revenue or CPGH Inc.," Knopp said.

"There are a lot of questions to be asked yet," he said.

The CPH task force will meet every two weeks starting Jan. 11.

Brielle Schaeffer can be reached at brielle.schaeffer@peninsulaclarion.com.



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