Business Columns & Blogs

Health care mergers, Puget Sound airport competition are trends to look for in business

An Alaska Airlines passenger waits to board his flight at the north terminal at Sea-Tac Airport in 2015.
An Alaska Airlines passenger waits to board his flight at the north terminal at Sea-Tac Airport in 2015. Staff file, 2015

Here is some stuff I know, the “Hey Mom Nature – it’s in the high 20s and with a little creative rounding that’s almost 32 degrees, so why don’t you get thawing already?” edition:

■ On churns the upheaval, consolidation and restructuring of the health care industry, with local players right in the thick of it.

Catholic Health Initiatives, which includes Tacoma-based Franciscan, and Dignity Health have merged to form CommonSpirit Health, operating 142 hospitals and more than 700 care sites in 21 states.

CHI Franciscan isn’t exactly small potatoes on its own. According to its description, it accounts for $2.45 billion in annual revenue, more than 12,000 physicians, providers, nurses, and staff and 1,200 beds at 11 hospitals including St. Joseph in Tacoma, St. Anthony in Gig Harbor, St. Clare in Lakewood, St. Elizabeth in Enumclaw and St. Francis in Federal Way.

But the pressure has been unrelenting in health care to bulk up, to buy or merge with someone else, to create care networks with the size, breadth and depth to better negotiate deals with the government, insurance carriers, drug companies and equipment suppliers and employees, while at the same time keeping as much of each patient’s spending in house as possible.

Thus CHI Franciscan becomes a part of an organization with $29 billion in revenue. The goals of the new CommonSpirit Health include:

“Expanding clinical expertise across the system in primary, acute, and specialty care, and focusing on care for patients with chronic and complex conditions; accelerating the shift toward providing services outside of hospitals to homes, the community, and online; investing in technologies that make care more convenient and personal.”

Those will take money to accomplish, so even as the latest deal is wrapped up, the hunt is on to find others trying to survive in health care to buy or merge with.

The trend — pressure really — is also on for more experimentation, which brings up news from Renton-based Providence-St. Joseph Health (also a Catholic health-care conglomerate) that it has launched Ayin Health Solutions, a Portland-based for-profit “population health management company.” Ayin will provide such services as pharmacy-benefits and employee-benefit management services.

The move, Providence-St. Joseph said in a release, “recognizes the current state of the health care industry and the need for modernization, revenue diversification and cost-efficient, total health care.”

Ayin will deliver “solutions that will help other organizations improve clinical outcomes, simplify patient access to information, lower health care costs and meet payer and business requirements.”

Which is what the Jeff Bezos-Warren Buffett-Jamie Dimon consortium wants to do, and which is what dozens of tech startups in places like Seattle are aiming to do. We now await news that any of these have come up with answers and models that improve health care delivery and outcomes while reducing costs. About all that can be said with certainty is that the old-fashioned stand-alone, independent, community-based, non-networked hospital won’t be among them.

■ The Port of Seattle’s major operation and focus is not the seaport but the airport, and it’s in that realm that things are about to get interesting.

After decades of proposals and local wrangling, extended by a last-minute hiccup courtesy of the federal government’s shutdown, Everett’s Paine Field is about to get commercial passenger service. Tentative takeoff is in early March, with Alaska and United airlines flying to western destinations. The easternmost city on the inaugural timetable is Denver. The rest are in California, Arizona, Nevada and Oregon. The airport will start with 24 arrivals and departures a day.

How long will it stay there?

Conjure up in your mind a map of the Seattle metro area. Now draw an east-west line roughly along the ship canal and the north shore of Lake Union. Everything north of that is Paine Field’s potential audience. Faced with the choice of slogging through increasingly impenetrable Seattle traffic to get to Sea-Tac, or making a much shorter jaunt to Paine Field, what do you suppose people in Snohomish, Skagit and large swaths of King County will elect to do? For the local tech exec looking to fly to the Bay Area and Silicon Valley, Paine Field is going to be an attractive option.

Then what?

If the initial flights prove as popular as airport developers and the airlines think they will be, then the pressure will be on to add flights and destinations. How about hubs like Chicago, Dallas or Atlanta? Or vacation destinations like Hawaii?

It won’t come automatically. The Paine Field terminal at the moment has all of two gates. Nearby communities didn’t go along willingly to the plan to add commercial passenger service and aren’t likely to simply shrug at the suggestion of expanded flights and more facilities.

For Sea-Tac, Everett could serve as relief valve to concerns about its own capacity for growth. It also has the competitive advantage of size, heritage, surrounding infrastructure — hotels, car rentals, transit — and as the arrival and departure point for international flights (although many of the planes flying those international routes started life in Boeing’s giant assembly building situated next to … Paine Field). South Sound travelers aren’t likely to go to Everett for a flight that duplicates one already closer at Sea-Tac.

But there’s no mistaking that Paine Field poses a competitive threat to Sea-Tac, one capable of skimming off a lucrative slice of business. When it takes longer getting to the plane than the plane ride itself, the market starts looking for alternatives. In the form of Paine Field, it may well have found one.

Bill Virgin is editor and publisher of Washington Manufacturing Alert and Pacific Northwest Rail News. He can be reached at