Providence Health Care CEO Dr. Andy Agwunobi has adopted a more conciliatory tone toward Rockwood Clinic as that big health-care provider moves closer to a proposed sale of its practice to Providence rival Community Health Systems Inc.

Rockwood Clinic executives, meanwhile, unfazed by published sharply critical comments from Agwunobi about their and the Rockwood board's role in the matter, say they're confident the sale will be approved by Rockwood shareholders and ultimately will benefit patients. Shareholders are expected to vote on the sale before the end of the year.

Publicly traded CHS, based in Franklin, Tenn., acquired most of the assets of Spokane nonprofit Empire Health Services in October 2008 for $156 million. Also, it said it would make $100 million in capital improvements over the next five years at the two former Empire Health hospitals here, Deaconess Medical Center—Providence Sacred Heart Medical Center & Children's Hospital's main competitor—and Valley Hospital & Medical Center.

Dr. J. Craig Whiting, Rockwood Clinic's interim president and CEO, says he won't discuss financial terms of the transaction, which has caused writers of some letters to the editor to express concerns about how it will affect services to Rockwood and CHS patients.

Whiting has been filling in as president and CEO for Dr. Kevin Sweeny, who took a leave of absence in January and will resume those positions full time Jan. 1. Sweeny was present, though, for most of a recent interview the Journal had with Whiting at Rockwood Clinic's executive offices.

A spokeswoman at CHS headquarters in Tennessee declined late last week to comment on the pending acquisition, saying the company doesn't discuss nonbinding agreements publicly.

Regardless of how the shareholder vote goes, Agwunobi says he expects that Providence and Rockwood will continue to work together as they've been doing for many years.

"We have to work together for the people of Spokane," he says. "Ensuring that people have the best health care for the next 30 years is much bigger than any one organization."

Providence has more than 30 contracts with Rockwood Clinic that include a range of joint programs and research projects, and it's important "that we build upon those successes," Agwunobi says.

"We owe it to the community to integrate services," he says.

Rockwood Clinic executives say there's nothing in the pending agreement that prevents the big practice from continuing to work with Providence, and they say they believe Rockwood has a good, professional relationship with Providence, as it does with other health-service providers here. They emphasize, though, that they expect Rockwood Clinic's main focus to be on developing an integrated health-care delivery system with CHS.

"I think there is an increasing awareness that we have a potential to provide better care," says Whiting. "I think the integration will have significant tangible consumer benefits."

Sweeny says the transaction would provide Rockwood with the deep capital resources it needs to continue to grow, and says, "I believe we have a great opportunity to help shape how health care is delivered in Spokane."

Big impacts

The acquisition has huge implications for the health-care industry here because of the sheer size of the players involved.

Providence Health Care, the Inland Northwest's largest health-care system, is a nonprofit Catholic-sponsored network that encompasses 10 hospitals and organizations that altogether employ about 8,500 people. It operates Spokane's largest hospital, Providence Sacred Heart Medical Center & Children's Hospital, and Providence Holy Family Hospital, on the city's North Side.

Rockwood Clinic, founded in 1930, has 77 shareholders and 133 doctors overall representing more than 30 medical specialties. It employs about 200 health-care providers and about 1,000 people in all, operates 32 clinics, and sees more than 160,000 patients a year.

If its sale is approved, Rockwood Clinic would be owned by a publicly traded company that owns or operates 122 hospitals in 29 states and that employs more than 90,000 people, counting affiliate entities. It says, however, it would become a taxable nonprofit entity, retain its own brand, and continue to be guided by a board comprised of physicians adhering to by-laws that Rockwood Clinic approved and established, though CHS would have two nonvoting seats on the board.

Whiting said in the interview two weeks ago that contract documents still were being drawn up for the sale, after which Rockwood's 10-person board would review them and make a final recommendation to the other 67 physician shareholders on whether to proceed. A Rockwood Clinic spokeswoman said proposed contract documents also were to be sent to the shareholders each of whom would have a somewhat different contract. The shareholders will vote at a shareholders meeting 20 days after the board issues its recommendation, Whiting said.

Rockwood Clinic's board shocked the medical community here on Oct. 20 when it announced that it had unanimously entered into a preliminary agreement to sell the practice to Franklin, Tenn.-based CHS. It said the pact, if approved, would lead to an integrated system that would include primary and specialty care, walk-in surgery centers and urgent-care facilities, a range of other outpatient services, and inpatient hospital care.

In comments published in The Spokesman-Review reacting to the announcement, Agwunobi accused Rockwood Clinic's leaders of bad-faith dealings and unethical conduct, and suggested they were leading Rockwood physicians down a perilous path "fueled purely by profit motive."

The Spokesman-Review article said Agwunobi accused Whiting and others of gaming Sacred Heart months earlier by initiating talks ostensibly to strengthen partnerships, but that those talks appeared to have been a negotiating play to increase Rockwood Clinic's leverage with CHS. It also quoted Agwunobi as saying that Providence, in evaluating its options, might look at hiring replacements for Rockwood's physicians and services and that he believed Rockwood would "look back at this decision with huge regret."

In much less strident comments during a recent interview with the Journal, Agwunobi said that while he still was disappointed with the actions by Rockwood Clinic's leaders, "We truly value Rockwood physicians," and what's most important is continuing to work together for the welfare of patients.

Citing the rapidly unfolding developments in Washington, D.C., on health-care reform, he said he foresees competition among health-care providers subsiding in the future, and adds, "What we should be doing under reform is collaborating even more than we have in the past."

Of his published comment about the possible hiring of replacements for Rockwood physicians currently practicing at Providence facilities, he said, "We don't know if it (Rockwood Clinic's sale to CHS) will leave us with gaps in our services. It's too early to tell what will happen. Obviously, we're following the situation very closely."

Rockwood Clinic's board issued an "Open Letter to Our Patients" about the preliminary agreement with CHS, and said in the letter that patients wouldn't be asked to change their provider or be directed to a specific hospital facility. "These decisions will continue to be made by the patient in consultation with their physician," the letter said.

Whiting said in the recent interview, though, that Rockwood Clinic obviously would encourage patients to utilize services within the integrated health-care delivery system that it would be working to establish with CHS. He says he expects that system to provide advantages in areas such as real-time access to patient data.

Currently, "What we don't have is easy access to data in the hospital," he said, adding, "With this integrated system, all of that will be seamless."

Sweeny said he foresees the alignment of Rockwood Clinic and CHS enhancing the development of new ideas and innovative approaches to patient care here, and he said it also would provide "enormous potential" for the expansion of some current programs.

Though the joining of the two big health-care providers here won't occur unless Rockwood Clinic shareholders authorize it, Whiting and Sweeny both say they're confident the deal will go forward, based on the positive feedback they're hearing.

Says Whiting, "Overall, we're getting a lot of excitement."