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A Letter to the Port Angeles Community

Dear Port Angeles Community Member,

We at Virginia Mason share the concern voiced by the Port Angeles community regarding possible closure of the Port Angeles clinic. Unfortunately, the millions of dollars we have lost over the 10 years operating the clinic forced us to announce this difficult decision in September 2005.

In 1995, for $5,000,000, we purchased the Port Angeles Clinic from the physicians, who for the most part still practice there. Since that time we have invested nearly $90,000,000 and lost nearly $10,000,000.

Virginia Mason’s focus has always been on providing quality health care. But to deliver that quality care, we need to make enough money to invest in facilities, technology and our staff. In 2005, we had an operating margin of 1 percent, well below that of most other medical centers in the region. We cannot be in business for any of our patients if we lose money.

We have had a long-standing relationship with patients and physicians on the North Olympic Peninsula, and we do not like having to change the relationship with our clinic. But, it was also a decision with the intent to help transition the clinic to an independent and self-sufficient position. It was not the first time that we have taken such an action, for we have done this successfully in many smaller communities. In these communities, we have always provided dollars for transition and, the physicians have used those funds to begin self-sufficient practices.

Since announcing our decision, we have repeatedly increased our financial commitments to the physicians and staff to keep the clinic going, and we have had numerous conversations with Olympic Medical Center requesting their help. We have repeatedly extended the transition deadline, which was originally scheduled for January and is now slated for the end of April.

On February 9, we negotiated a letter of intent with Olympic Medical Center that included the transition of the internal medicine physicians of the clinic to the hospital and helped set up a support structure to move the family practice physicians into independent practice.

This also included a donation of $350,000 to the hospital foundation to support access to quality health care in the Port Angeles community, regardless of an individual’s ability to pay the full cost of care. In addition, we offered to provide approximately $1,000,000 in separation benefits to the staff of the clinic, the majority of which would go to the physicians, to help in the transition.

Much has been made of Virginia Mason’s commitments to patients and the community of Port Angeles. Some of the comments have been positive and many have been negative. We do not feel good about this situation, but the economics of health care, especially in this community, are very hard. In perspective though, there is no health care organization that has invested as much and lost as much in the Port Angeles health care community as Virginia Mason. There is no physician practice in Port Angeles that has served more Medicare patients than Virginia Mason. When looking at Virginia Mason’s true economic offering for this transition effort, most would characterize it as being very fair.

Some have suggested that patients will no longer come to Virginia Mason as a result of this decision. Indeed, we have heard from some physicians that they will stop referring patients to us. We have never looked at things this way. Virginia Mason stands on its reputation for clinical excellence and its commitment to patients and referring physicians. We are the only medical center in the Pacific Northwest to have received the HealthGrades Distinguished Hospital Award for Clinical ExcellenceTM for the last three consecutive years. That places Virginia Mason amongst the top 2 percent of medical centers in the country. We are hopeful that difficult economic decisions do not become the basis for clinical decision making. However, that will have to be determined by patients and their doctors.

We remain committed to the patients and physicians we have always served in the Port Angeles community. This is a difficult transition for everyone involved. It will be resolved by keeping a collective focus on the best interest of Port Angeles residents in a financially challenging health care environment.

Thank you.

Brian McDonald, MD
Chief of Satellites
Virginia Mason Medical Center
Patti Crome, RN
Senior Vice President and Clinic Administrator
Virginia Mason Medical Center
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