Competing Tacoma mental hospital proposals vie for state approval

Statistics supporting the need for more mental health hospital beds in Pierce County are compelling:

“The figures are appalling,” said Bill Weyerhaeuser, a retired Pierce County psychologist and co-chairman of a local alliance proposing to build a psychiatric hospital in Pierce County.

Pierce County has just 23 psychiatric unit hospital beds for some 700,000 people, according to state Health Department statistics. The ideal, based on Department of Health formula targets, would be roughly 160 beds for Pierce County.

“The Pierce County Jail has become the county’s third largest mental health facility,” said Pierce County Sheriff Paul Pastor. The jail doesn’t have either the staff or the facilities to handle the number of mentally ill persons brought there because there is no other place to take them.

“It’s not good for our staff. It’s not good for the mentally ill,” he said.

Since the closure of Puget Sound Hospital’s 160-bed psychiatric unit 15 years ago, nothing has been built to replace it.

While the need for a new mental health facility in Pierce County seems undeniable, just who will build and operate such a hospital is the focus of a spirited regulatory fight.

The players are an alliance of the county’s two largest health care providers, MultiCare Health System and CHI Franciscan Health System, and a California-based private company, Signature Healthcare Services LLC.

The Washington State Department of Health, which has been reviewing the matter for nearly a year now, says it will decide by Jan. 20 if one of the two applicants or both will be allowed to build a new mental health hospital.

The department is charged under state law with determining whether there is a genuine need for new medical facilities. The standards for a medical facility differ depending on its type. Common standards by which proposed facilities are judged include the demand for new beds, the financial feasibility and costs of the project, and the quality standards proposed for that facility. The law was enacted to ensure that new facilities aren’t overbuilt, thus raising costs for patients.

Both applicants have submitted hundreds of pages of documents and testimonials from health care professionals and supporters in their effort to prove which proposal is superior.

The two proposals are both similar and significantly different.

Both agree that there is a need for at least a 120-bed mental health facility in Pierce County. The Alliance for South Sound Health, the local partnership, proposes to build a $40.6 million facility on the campus of MultiCare’s Allenmore Medical Center at South 19th Street and Union Avenue. Signature Healthcare Services initially proposed an even-larger facility, 174 beds, on a largely vacant site farther west on South 19th Street. Signature says its hospital would cost $42.6 million.

The California-based company subsequently cut its application to 120 beds while arguing that the state should approve both facilities.

The Alliance argues two facilities would flood the market with surplus beds.

Signature posits that allowing construction of two mental hospitals in Pierce County would foster competition and keep costs lower than if a single hospital had a monopoly on mental health care.

“It (the Department of Health) can rely solely on the promises of two hospital systems that have not stepped up since the state had to close Puget Sound Hospital in 2000, or it can be assured of at least 120 psychiatric beds from Signature, which has established 13 hospitals in the same time period, by developing redundancy in bed supply by approving two different systems simultaneously,” Signature told the Health Department.

The difference in the two applications partly stems from their different assumptions about other planned or existing mental health care facilities in Pierce County.

Signature’s proposal calls for its 120-bed facility to have units to care for children with mental issues, adults with psychiatric problems and older people with mental challenges.

The Alliance counters that some of those beds will be unnecessary because there’s a 23-bed mental health ward at Franciscan’s St. Joseph Medical Center and because of a planned 30-bed youth psychiatric unit at MultiCare Tacoma General Hospital.

“Signature’s requested number of beds is wrong,” said the Alliance in its certificate of need application, “given it has chosen to ignore the recent approval of 30 adolescent inpatient psychiatric beds at MultiCare Tacoma General Hospital.”

MultiCare obtained state permission last spring to convert 30 acute care beds at Tacoma General to youth psychiatric beds without going through the usual certificate of need process. MultiCare was able to bypass that certificate of need process because of legislation enacted to speed up the creation of child mental health facilities in the state.

But Signature notes that MultiCare has yet to open the 30 child mental health beds. It further suggests that once the new mental health hospital is built, Tacoma General could convert its youth mental health beds back to general medical use and move the young psychiatric patients to the new hospital. Signature contends that MultiCare should not have been granted the automatic certificate of need for the new unit because it will handle only patients from 12 to 17 years old, not those from 3 to 17, as Signature says the Legislature intended.

Regarding St. Joseph’s psychiatric unit, Signature speculates that Franciscan will likewise convert those beds to acute care and move the unit to the new hospital. Franciscan says it intends to keep the unit in place.

The Alliance is relying heavily on its community connections as a reason it should win the mental health certificate of need.

The two health care systems have gathered up endorsements from a broad range of local government, civic and professional individuals and groups to support their application.

In a recent visit with The News Tribune’s editorial board, seeking the paper’s endorsement, the Alliance brought executives from both health organizations, Pierce County Sheriff Pastor, Tacoma-Pierce County Chamber of Commerce CEO Tom Pierson, Auburn Mayor Nancy Backus, State Sen. Bruce Dammeier, Tacoma City Councilman Ryan Mello, Tacoma investor and developer Herb Simon, Murray Pacific CEO Toby Murray and others to speak on the Alliance’s behalf.

In letters and testimony at hearings before the Health Department, the Alliance recruited a cadre of Pierce County mental health professionals and patients and their families to endorse the local proposal.

The Alliance notes in submissions to the Health Department that its mental health facility would be strongly tied to its existing network of clinics and hospitals to provide whole-person care to those in the mental health facility, including attention to their physical infirmities. That care network includes behavioral health specialists.

“It is likely that virtually all of the patients expected to utilize psychiatric services in Pierce County will have received some form of care in at least one of the Alliance member facilities,” the Alliance said. “This lends to tremendous opportunities for coordinated care to reduce cost while achieving higher quality and appropriate care.”

Signature has no such communities connections, said the Alliance.

The California firm counters that while the Alliance has many facilities for caring for patients’ bodily ailments, it has precious little mental health experience and expertise. Signature operates 13 mental health facilities around the country. That’s its only business, it said.

Signature even suggests that the Alliance’s recent concern for mental health care was prompted not so much by its perception of an unmet need as by its desire to monopolize medical care in the South Sound. The Alliance proposal didn’t emerge, Signature said, until local health care systems got wind of Signature’s plans.

The Alliance says Signature’s track record at other hospitals hasn’t been completely stellar. The local group points to problems Signature had at its Pasadena, California, hospital and in Chicago and Detroit. Those problems included allegations of patient deaths and assaults.

“Signature and its owner, Dr. Soon Kim, have a reputation for misconduct at their facilities in other states,” the Alliance maintained in its application. “Signature has a well-documented history of providing substandard patient care,” the Alliance wrote.

Signature denied that it has quality of care issues, contending that the Alliance “slandered” Signature and Dr. Kim in its application.

Many of the allegations that the Alliance noted were years old and unproven, the California company said.

“In regard to ASSH’s outrageous and unsubstantiated conclusion, citing a history of substandard care, we note that eight of our 13 hospitals are on track to be TJC (The Joint Commission) “Top Performers on Key Quality Indicators.”

The local group also casts doubts on Signature’s ability to bring the new hospital online by 2018, as it has predicted. The tract Signature has proposed for its hospital site will need zoning changes and environmental assessments before building can begin.

The Alliance says its Allenmore campus is already zoned for medical use and practically shovel-ready for construction.

Signature says that the Alliance’s cost estimate for its hospital fails to include the cost of the land at Allenmore, as well as the cost of demolition and cleanup of an existing building there.

The two proposals differ significantly in how they would be financed.

Signature says virtually all its costs would be privately financed. The Alliance proposal includes a mix of financial sources: the two health systems’ retained earnings, state aid and private donations.

The Alliance notes that Signature’s application contains no firm bank financing commitments. It does include favorable references from banking sources that have financed other Signature projects.

John Gillie: 253-597-8663