Valley Medical Center could form strategic alliance with UW Medicine

Rich Roodman, CEO of Valley Medical Center for 27 years, stands in the Winter Garden Friday that connects the actual hospital, which opened in 1969, and the new Margarita Prentice Trauma Center. Roodman has recommended an alliance with UW Medicine. - Dean A. Radford/Renton Reporter
Rich Roodman, CEO of Valley Medical Center for 27 years, stands in the Winter Garden Friday that connects the actual hospital, which opened in 1969, and the new Margarita Prentice Trauma Center. Roodman has recommended an alliance with UW Medicine.
— image credit: Dean A. Radford/Renton Reporter

With doctors and community and business leaders looking on, Valley Medical Center CEO Rich Roodman recommended Wednesday night that Valley affiliate with UW Medicine.

Roodman described the affiliation as a strategic alliance – and not a merger with UW Medicine – that would bring new clinical programs to Valley or enhance existing ones, such as heart, stroke, oncology and emergency medicine.

Roodman presented this landmark recommendation to the medical center's Board of Commissioners. The recommendation got a strong favorable reaction from community leaders who spoke and from most commissioners.

Public Hospital District No. 1, which owns the medical center and neighborhood clinics, would still exist. Its five commissioners would sit on a larger board that would oversee management of Valley Medical. The Valley board would continue to oversee the hospital district itself.

In essence Valley Medical Center would become part of the UW Medicine system, which owns and operates Harborview Medical Center and the University of Washington Medical Center. UW Medicine also shares ownership and governance of Seattle Cancer Care Alliance, Children's Hospital and Medical Center and Fred Hutchinson Cancer Research Center.

Because of its size, the alliance has potential antitrust issues, Roodman told the board.

Next Tuesday, Valley Medical and the Seattle Cancer Care Alliance will sign an agreement that will bring the treatment program of one of the state's premier cancer centers to Valley.

How to rename the medical center is one of the many details to be worked out, but the intent right now is to include Valley and its role in the alliance in the name.

UW Medicine CEO Paul Ramsey will speak to the Valley Medical board on Tuesday to present the proposal from the University of Washington's standpoint. Roodman said the alliance would give UW Medicine room to grow at Valley and get a steady stream of patients for its specialists.

The board could then vote on a non-binding letter of intent, which allows the review and negotiations to proceed.

"This is a game changer," Roodman said in presenting the recommendation to the board. He would be surprised, he said, if the board doesn't move forward.

Roodman stressed that so far what he has presented are his ideas, as are his answers to questions about an alliance.

The alliance between two medical institutions that share common values has been discussed for weeks by their top executives. Roodman over the last several months has reached out to others, too.

"This is like a marriage," Roodman said. "You've got to have common values."

The proposed alliance is also the child of health-care reform, which Roodman says is really insurance reform, which requires that medical institutions collaborate together to operate efficiently, to cut costs and to manage their resources wisely.

Size and market share are important, Roodman said.

UW Medicine, with its long list of major medical institutions in the Seattle area, generates much more revenue than Valley Medical. In 2009 it was about $3 billion; in 2010, following an affiliation with Northwest Hospital, it jumped to $4 billion. Valley Medical's revenues are about $1 billion. Millions of Valley's revenue have gone to care for patients who have no or inadequate medical insurance.

After Roodman presented his recommendation, members of Valley's board and of the audience spoke.

Commissioner Anthony Hemstad asked how the alliance would affect Valley's finances. The alliance would have no affect on Valley's finances and there would be no co-mingling of money, answered Larry Smith, Valley's chief financial officer.

In an interview after the meeting, Hemstad said of the alliance that "the devil is in the details."

Commissioner Sue Bowman said Valley Medical needs to consider such an alliance in order to grow.

Renton Mayor Denis Law and Kent Mayor Suzette Cooke said the prospect was exciting. Renton Chamber of Commerce CEO Bill Taylor said "we would be foolish" to not pursue the alliance.

Doctors spoke out in favor of the idea, although there was some initial concerns, including what would happen with their patients and who would employ them. Such issues would not change under the alliance, as presently conceived.

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