The Spokane areas two major hospital systems say they expect to see healthier finances in 2007, but inadequate reimbursement levels and a steady exodus of primary-care doctors continue to be big concerns in the health-care sector here.


Were optimistic about the year. We expect a stronger financial performance than this year, says Skip Davis, CEO of the Spokane-based Providence Health Care network, which includes Sacred Heart Medical Center & Childrens Hospital and Holy Family Hospital.


Providence Health Care became part of the Seattle-based Providence Health & Services system on Jan. 1, and Davis says he expects efficiencies achieved through that alliance to help provide added stability to the network here.


Sacred Heart plans to spend about $18 million on a laboratory expansion that will be occurring over the next two years. Two other big Providence projects are a $35.8 million expansion at Holy Family thats still in the early stages of construction and a $34 million expansion and remodel at Mount Carmel Hospital, in Colville, Wash., thats slated to get under way next spring.


Empire Health Services CEO Jeff. A Nelson says he expects 2007 will be at least as good, if not better than this year for Empire, which operates Deaconess Medical Center and Valley Hospital & Medical Center. Empires revenues have been growing at about 4 percent to 5 percent a year recently, and Nelson says, We think thats a reasonable, conservative expectation for next year.


Tom Corley, Holy Familys CEO, says, The biggest problem were facing is uninsured, and the effect those nonpaying patients have on the hospitals bottom line. On the positive side, though, he says, Our volumes have been stronger than we anticipated, and weve been able to manage our costs pretty well.


Tom Legel, chief financial officer at Kootenai Medical Center, in Coeur dAlene, says KMC plans to raise its rates by 6 percent next year, due partly to lower Medicare reimbursements. It was doing well enough a year ago that it opted not to raise rates in 2006.


It will be a little tougher for us in 2007, but we think we still will do OK financially, he says.


KMC expects to build a $4 million parking garage expansion next year and begin construction of a $12 million-to-$15 million support-services building.


For doctors, next year will bring intensifying concerns about state and federal reimbursement rates, says Janet Monaco, CEO of the Spokane County Medical Society.


With continuing downward pressure on Medicare reimbursement rates, she says, We are preparing for a lot of people to call and tell us they dont have access to physicians. A lot of Medicare patients are going to be out in the cold, because Medicare doesnt pay what it costs to provide a service, so access to medical care is going to be even worse for those folks.


Also of big concern, she says, is a steady decline in the number of primary-care doctors in the Inland Northwest, with only about 200 of them now serving a population of about 2.1 million people. Fifty primary-care doctors have left the area over the last five years, she says.


We are very concerned about peoples access to primary care. That is probably our No. 1 concern, Monaco says. She notes that doctors tend to establish their practices in the communities where they receive their schooling, and adds If We dont get legislators to fund those 20 slots for medical students here (as proposed earlier this year), were going to be sucking seaweed.