For immediate release: August 20, 2008 (08-139)

Contacts:
Tim Church, Communications Office 360-236-4077
Donn Moyer, Communications Office 360-236-4076

Empire Health update: state approves sale of Spokane-area hospitals
Plan assures sustained charity care, access to quality care in Spokane County

OLYMPIA ¾ The proposed sale of two Spokane-area hospitals to a Tennessee-based company has been approved by state health officials.

"I’m pleased that this proposal has been approved and that the Department of Health has beat its timeline to make this important decision," said Governor Chris Gregoire. "I know it was a difficult choice for the local hospital board to sell the facilities. This decision protects the many interests of the community and helps ensure that both hospital systems in Spokane — Providence and Empire — will remain strong."

Community Health Systems of Tennessee applied to buy Deaconess Medical Center in downtown Spokane and Valley Hospital and Medical Center in Spokane Valley. Empire Health, a local non-profit, now owns both hospitals. The state health department reviewed the sale under both the Certificate of Need program and as a conversion to for-profit status.

The approval comes with some conditions. It requires Community Health to set aside $80 million in proceeds from the sale for an independent non-profit foundation for charitable purposes. It also requires the buyer to make at least $100 million in capital investments in the hospitals in the next five years. Community Health must expand the level of charity care provided by the two facilities and continue to provide essential services for at least 10 years.

"We know how important these hospitals are to the people of the Spokane area," said Secretary of Health Mary Selecky. "We heard from hundreds of people, and considered their input. It’s obvious they care deeply about this issue. We worked hard to be thorough, yet make a timely decision. We’re issuing this decision well-ahead of our original schedule of September 10."

The decision was based in part on a legal opinion from the state Attorney General’s Office. The Attorney General’s Office review helps safeguard all charitable assets and assure that proceeds are used for charitable purposes. The legal opinion reviewed how the community interests and assets are protected in the sale.

The health department reviewed about 8,500 pages of information in the application, as well as an independent valuation of the sale.

In November, Community Health Systems filed its letter of intent to buy the hospitals. It sent applications to the state in January. After additional material was provided, the applications were considered complete in May. The attorney general’s opinion was completed August 8, paving the way for today’s decision.

Deaconess and Valley have 511 acute-care beds and treat more than 225,000 patients each year in the Spokane area.

More information on the review and decision (www.doh.wa.gov/hsqa/fsl/CertNeed/Empire.htm) is available on the Department of Health Web site.

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