A Texas company wants to open a new hospital herewithin St. Lukes Rehabilitation Institutean idea thats endorsed by Spokanes other hospitals as a way to take some of the financial pressure off of them and to add a treatment option thats now scarce in the region.


The company, SemperCare Inc., of Plano, Texas, has applied to the state of Washington for a certificate of need to open a 31-bed, long-term acute-care hospital inside St. Lukes. Inland Northwest Health Services, a joint venture of Spokane hospitals that operates St. Lukes, submitted the application on SemperCares behalf, says Gary Smith, chief operating officer at St. Lukes.


Empire Health Services, which operates Deaconess Medical Center and Valley Hospital & Medical Center here, and Providence Services Eastern Washington, whose hospitals include Sacred Heart Medical Center and Holy Family Hospital, both support the new venture because it would accept patients who are well enough to leave their intensive-care units but are too sick to go home or even to a nursing home, Smith says. In many cases, such patients must stay in the hospital even after their Medicare hospital benefits have been exhausted, which leaves the hospitals paying for their care, he says.


A long-term acute-care hospital is subject to a different set of Medicare payment schedules, say Smith and Gary Kagan, co-founder of SemperCare.


The new hospital also could spark future expansion at St. Lukes, which is located at 711 S. Cowley, and it would result in SemperCare hiring about 50 nurses and support staff, they say.


Perhaps most importantly, however, the SemperCare facility would provide our whole community with a continuum of care that we are not able to offer at this point, Smith asserts.


$2.7 million investment


Under the proposal submitted to the state, SemperCare says it would spend about $2.7 million to establish the new hospital here.


That money would go toward remodeling the space the facility would occupy in St. Lukes, plus to buy equipment and create a working-capital account, Kagan says.


The state should have an answer on the certificate-of-need request by mid-August, says Randy Huyck, of the Department of Healths certificate-of-need program.


If the project proceeds, remodeling for the new hospital space could start by late this year or early next year, Smith says.


SemperCare currently operates 11 long-term, acute-care hospitals and has eight more in the works nationwide, Kagan says.


Hospitals gain


Under the proposed agreement, SemperCare would lease space in St. Lukes for about $360,000 a year, Kagan says. In addition, the Texas company would contract to buy some services from St. Lukes, such as food and pharmacy services, he says.


Smith says the SemperCare lease is really not a major financial benefit for us, although it will bring more efficiency to St. Lukes ancillary services by spreading the cost of those services among more inpatient beds.


The bigger impact will be on acute-care hospitals, Smith says.


Kagan says that based on SemperCares past experience, about 40 percent to 50 percent of the patients who would be admitted to the new hospital would have ventilator-dependent pulmonary problems, while the rest would have medically complex conditions, usually with multiple disease processes, such as cancer, cardiac conditions, renal insufficiency, and severe diabetes. About 40 percent of SemperCares patients are transferred to its facilities from a hospital intensive-care unit, he says.


In many communities, such patients frequently end up staying in a hospital long after their Medicare reimbursements have run out, simply because theres nowhere to transfer them, Smith says.


Its financially a major drain on the hospitals to care for those patients, but you have to take care of them. You cant not provide that patient care, he says.


Kagan says patients average length of stay in other SemperCare hospitals is about 27 days, and patients typically are discharged to nursing homes, rehabilitation facilities, hospice care, or to their homes with the help of home-health care.


Janice Marich, a spokeswoman for Empire Health here, says the ability to transfer patients from Deaconess and Valley Hospital to a long-term acute-care facility should improve our Medicare financial outcomes by about $1.5 million a year. Empire has experienced financial turmoil in recent months that it says has been partially due to insufficient Medicare payments for the care it provides.


The financial impact on Sacred Heart and Holy Family hospitals here couldnt immediately be determined, but Skip Davis, CEO of Providence Services Eastern Washington, has said before that Providence would welcome the addition of long-term acute-care beds to the community.


Possible expansion at St. Lukes


The addition of a new hospital within St. Lukes also could spur expansion at the rehabilitation facility in coming years, Smith says.


Currently, St. Lukes is licensed for 102 beds, but uses only 71 of those beds. If it leases 31 of those unused beds to SemperCare, looking at the future, were going to have to look at expanding some of our inpatient services, he says.


That could mean adding licensed inpatient beds within St. Lukes and transferring some outpatient services out of its building, he says. It also might mean we eventually may have to expand even the footprint of the building, he says. Smith anticipates that St. Lukes could need to license new beds within two or three years.