By Caitlin Rothermel
The Vashon Health Care District hasn’t talked to us in a while, and people have definitely been asking questions. But that ended this November when they met to present and pass their 2024 budget. It’s important to talk about the VHCD now because their proposed plans substantially change their original mandate, with the potential for substantial additional costs in the future.
There has been limited recent coverage of VHCD activities by VHCD itself or other local venues, but the VHCD consistently meets twice a month (you can attend via Zoom), and their meeting minutes are available on their web page (https://vashonhealthcare.org), so anyone can keep up on their work.
Summary
The VHCD was established in 2019 to ensure the Vashon clinic always has the funding needed to stay in operation.
With the SeaMar clinic no longer needing a subsidy from the VHCD, and with the VHCD having paid off its existing debt, the new VHCD priorities are to:
- Establish access to after-hours and urgent care on the Island
- Implement a primary care safety net for Islanders
- Support increased access to behavioral health care, particularly for youth.
In 2024, the VHCD will also further develop on the land they have purchased; discussions are underway to possibly include affordable housing as part of this plan.
This represents a substantial change from the original mandate of the VHCD, and the VHCD should obtain more Island input before this work proceeds further.
The VHCD should do much more to keep the community updated on their work.
It is also time for us as a community to pay more attention to the work of the VHCD.
2019: VHCD established to address a Vashon healthcare problem
First, some historical and technical details. The VHCD is our local public hospital district, one of 56 in Washington state. As defined by the Association of Washington Public Hospital Districts, “Public Hospital Districts are community-created, governmental entities authorized by state law to deliver health services – including but not limited to acute hospital care – to district residents and others in the districts’ service areas. Owned and governed by local citizens, hospital districts tailor their services to meet the unique needs of their communities.”
Even though the VHCD is technically a “hospital district,” the VHCD’s name does not include the word “hospital.” This is because we do not have a hospital on Vashon, and do not intend to. The mission of the VHCD is “to promote and maintain the health of the residents of Vashon and Maury Islands by supporting accessible quality health care through community partnerships, shared decision-making, transparency, and responsible stewardship of resources.”
The VHCD was established in 2019 to address a clear problem. A series of clinics had opened at the Sunrise Ridge site and then left, citing financial strain. Most current was Neighborcare, in place since late 2016, and now making it clear they needed to be subsidized if they were to stay.
There are many reasons why a clinic on Vashon would find it difficult to become profitable; here is just one: We have a small population with a high proportion of Medicare (older) and Medicaid (low-income) patients. These program’s reimbursement rates are much lower than for commercial insurance, and many Islanders with commercial insurance choose to not use the local clinic.
Therefore, the VHCD was put in place to ensure that the Vashon clinic consistently has the funding needed to stay in operation. Voted on and approved in November 2019 by a large majority of Islanders, the VHCD is managed by a five-member board of elected commissioners and a part-time, paid supervisor. Its other expenses have been basic, including rent for an office space and modest technology and administration costs.
The VHCD is funded by a property tax levy, initially set at $0.58 per $1,000 of assessed value, and calculated to provide $1.95 million in yearly funding. The actual homeowner cost per $1,000 varies year-by-year, based on property tax values. For example, in 2023, with higher property values, the amount assessed went down to $0.39 per $1,000. The VHCD can lower the levy rate or set it as high as $0.75 per $1,000 in value, but has no current plans to do so. If the VHCD ever wanted to raise the levy above $0.75 per $1,000, Vashon would need to hold a vote to approve this (similar to the recent levy lift voted on for Vashon Island Fire & Rescue). Otherwise, the levy, with the general rules described above, remains in place.
2020-2022: COVID-19 and clinic clashes
Voter approval of the VHCD did not mean immediate access to funding. In Spring 2000, the VHCD took out a loan with King County to reimburse Neighborcare’s outstanding deficits, and an agreement was put in place to subsidize clinic operations going forward.
Then, everything changed again. In May 2020, Neighborcare announced they were leaving at the end of October. Vashon had never loved Neighborcare, and in some ways, there was a sense of “good riddance” about this transition. But it left us in a bind, and during the early days of COVID-19.
The VHCD worked diligently to identify a new clinic vendor. An initial request for proposals came and went with no applicants. Ultimately, some candidates were found, but healthcare organizations were not generally looking to expand during the pandemic. SeaMar, which operates the current clinic, was ultimately the only group willing to establish this relationship.
However, SeaMar was a good choice in many ways – they were a large, experienced regional operation, and were federally qualified to receive higher Medicare and Medicaid payments. After some site renovations, SeaMar opened at Sunrise Ridge in November 2020, with the VHCD providing a monthly subsidy of $125,000, or $1.5 million a year, an amount that was reset to $1.1 million in April 2022.
In winter and spring 2022, the VHCD started discussions, both internally and with SeaMar, to start a capital project to build a new clinic. In play was $3 million in state funding awarded in 2018; these funds were given to Neighborcare in 2021, and then transferred to SeaMar. Ultimately, the VHCD determined it would buy the land for the new clinic. Then, the VHCD would either lease the site to SeaMar, and SeaMar would fund and construct the new building, or the VHCD would build the clinic itself. In June, the VHCD authorized that it would build its own clinic.
In August 2022, SeaMar surprised Vashon by announcing their plan to separate from the VHCD and leave the Island at year-end. In a press release, SeaMar cited conflicts between their desire to operate independently and the VHCD’s preferred level of involvement. Then, days later, SeaMar walked back and said they wanted to stay at Sunrise Ridge for now. Also, they planned to remain on the Island. However, they would be independent and no longer needed the VHCD subsidy. In fact, they would be building a new clinic on Vashon.
Over the next month, the VHCD and SeaMar made repeated efforts to negotiate. Overall, public details were murky, and what was reported as likely to happen kept changing. At different times, both sides said the other group was difficult to work with. The VHCD also expressed concerns about SeaMar’s ability to self-fund the clinic, something that SeaMar has never fully clarified.
On September 9, SeaMar announced the purchase of a new clinic site in town (the Spinnaker building), with a plan for demolition and construction of a new structure. It was agreed that SeaMar would keep the $3 million in state funding and continue to sublease at Sunrise Ridge until 2025 or whenever the new clinic was ready. There have been permitting delays, but SeaMar now hopes to start work in late winter or early spring.
On September 14, the VHCD announced that it had bought a 2.3-acre parcel of land next to Kathy’s Corner, financed using a King County line of credit.
2023: A new mission, to “buttress” existing Vashon systems
As of 2023, the VHCD is no longer subsidizing SeaMar costs. By May, they had paid off their King County loans, both the initial funding and for the land purchase, and were cash-positive. At the November budget meeting, the VHCD reported $1.23 million in reserves.
This financial situation has enabled the VHCD to begin work “related to the pivot from the primary activities relating to the SeaMar relationship.” In early 2023, the VHCD reached out to community members via formal and informal listening sessions, and also coordinated with key Vashon organizations to obtain input on Island concerns.
From this, the VHCD’s new priorities are to: Establish access to after-hours and urgent care on the Island; implement a primary care safety net for Islanders; and support increased access to behavioral health care, particularly for youth. In the 2024 VHCD budget, the largest line item – $1.4 million – is reserved for these items, along with new programming and ongoing community outreach. The VHCD also recognizes the need to develop a contingency fund that will protect primary care delivery on the Island if SeaMar leaves.
During last spring’s community listening process, some Islanders proposed another option – that the VHCD should “go dormant” because the Island clinic was now operational without a subsidy. I interpreted this to mean that the VHCD should continue to function while also cutting back on its draw of community funds. This would keep the organization in place, providing some level of community leadership, and maintaining financial reserves to address future clinic funding concerns. The VHCD does not appear to be considering this option at this time.
This all raises unasked questions. These VHCD priorities are not unimportant things, but does Vashon see these tasks as the role of the VHCD?
Can urgent care make sense on Vashon? Since the VHCD started, the most-mentioned priority has been to establish after-hours care. But putting a typical urgent care facility on the Island would be expensive and complex. The site would be challenging to staff and would compete directly with SeaMar for employees and patients. It would require large start-up costs, and would then consistently lose money because our population is too small for financial success (a typical urgent care clinic needs a local client base of about 30,000).
Also, running any kind of urgent care clinic may just suck. Consider this cautionary advice from “Succeed at Urgent Care” in Medical Economics: “According to those who have made the leap, the hours are long, the profits margins are thin, and the financial risks are high.” With urgent care, residents could end paying a higher yearly clinic subsidy than before. And what if SeaMar decides to leave?
Creativity and genuine cooperation would be needed to succeed with urgent care. At certain stages, the VHCD has discussed urgent care collaborations with Vashon Island Fire & Rescue and SeaMar. Will the VHCD find a way to combine resources, or will they choose again to go it alone, and what will the financial commitment be?
Why is the VHCD planning a building project? Specific to the land purchase, the VHCD has cleared the site is looking at multi-use possibilities, indicating in August 2023 that “all possibilities can be considered for developing the property into the best possible community asset. Unmet health needs are the priority, but an approach that includes some housing connected with health service may be a possibility.” Related to this, discussions have occurred with Vashon Household, and a mock-up of potential plans that include affordable housing has been presented.
Part of the VHCD’s rationale for this new building is the need to ensure the Island has community ownership of a site – to avoid another loss like the Vashon Care Center. But consider that SeaMar and the VHCD have agreed that, should SeaMar leave, the VHCD has first right to purchase the new SeaMar clinic. So, if SeaMar left, the VHCD would become responsible for two buildings, or one building would be empty (and don’t forget the empty Sunrise Ridge site). Combine this scenario with the rising costs of new construction and delays experienced by new projects (like the SeaMar clinic), and it’s worth asking if this work should be dramatically staggered, especially if you think inflation is going to get worse.
Do we want the VHCD to become a large community grant-maker? The VHCD is considering directly funding social service organizations, building affordable housing, and establishing a “set-aside” primary care safety net. Exactly how broadly do we want to define “healthcare” within the VHCD mandate, and what are our priorities? This should be a community discussion, not a decision made by a limited group. And if we do take this step, how will we define the success of the grantmaking program and its work, and what input will the community have in terms of recipient organizations?
Conclusion
There’s a lot to praise the VHCD for. Over their first few years, they effectively addressed a series of unpredictable, urgent issues. But now, we have a bit of a breather between emergencies. This gives us the time to consider certain questions and weigh our financial priorities. It is time for the community to get more engaged with the VHCD’s goings-on, and for the VHCD to do a serious overhaul of its approach to community outreach.
Here are two immediate next steps. First, the VHCD needs to survey Island residents. The survey should be professionally designed and conducted, ideally by a qualified Islander business and not a large consulting firm, and administered in a number of settings, both online and in real life. The survey should present a realistic range of potential directions for the VHCD, including one or more scenarios where the VHCD “goes dormant.” The survey should target a prespecified percentage of Islanders – the exact percentage can be determined, but enough to show meaningful representation. Certainly, the VHCD should aim to reach substantially more than the 358, or 3.1%, of Island residents professionally surveyed by the VIFR before their recent levy vote.
Second, the VHCD needs to work much harder to keep the community updated, in the most basic of ways. As a start, this could include Facebook announcements – both in local groups and on the VHCD’s own site, regarding the agenda and dates and times for every meeting. VHCD should also develop a system wherein community members can sign up to receive VHCD updates and links to meeting minutes by email. Last, the VHCD superintendent and staff should be conducting ongoing outreach among community residents, not just community organizations.
Homeowners may pay the levies that support the VHCD, but this is not just a homeowner issue. Property tax increases (and there have been so many in the last few years) lead to higher Island rents, the loss of more long-time residents, and less money to spend locally and on the essential items that make day-to-day life possible. This is an issue that every organization on this Island should have at the forefront when making financial projections.
