ACH suitor should be compatible

Ashland Community Hospital's quest for a new partner after a century-plus of being single makes sense, but like anyone new to the dating scene, it should keep in mind that a good match is more important than the promise of riches.

We have no doubt that the hospital's administration and board recognizes this, but it bears emphasizing. There's no point in saving a community hospital if the end result is a hospital that no longer matches its community.

ACH announced last year that it would look for a partner to help it keep its feet on firm financial ground. The hospital's relatively small size makes it a challenge to compete with Providence and Rogue Valley Medical Center in Medford.

The continuing erosion in Medicare and Medicaid payments has had a particularly dramatic impact, with ACH administrators noting that 53 percent of the hospital's revenue comes from federal reimbursements. A small hospital has difficulty competing in other areas as well — purchasing new technology can be cost-prohibitive and it's difficult to attract specialists to a smaller community, to name just a couple.

So it makes sense to look for a partner. ACH has done that and whittled its list of suitors down to four: Providence Health & Services (parent company of Providence Medford Medical Center), Asante (parent company of Rogue Valley Medical Center and Three Rivers Medical Center) Dignity Health of San Francisco and Capella Healthcare of Tennessee.

All four organizations bring strengths to the table. Providence and Asante offer the ability to coordinate and create synergies with the larger nearby Medford hospitals. Dignity Health and Capella Healthcare are both large organizations that could provide the resources available to large organizations. Capella has hospitals in 15 communities, ranging from Jacksonville, Ala., to McMinnville, Ore. Dignity Health's website shows it with 40 hospitals and hundreds of care centers, primarily in California.

But there's more to consider than their size or location. Two of the organizations, Providence and Dignity Healthy (formerly Catholic Healthcare West), are Catholic-based health systems. That means they have restrictions and prohibitions on a number of fronts, including birth control, reproductive rights, in vitro fertilization, abortion, assisted suicide and other practices that run counter to Catholic beliefs.

Ashland Community Hospital is not actively involved in these areas, but an alliance with a Catholic-based health care system likely means those services would no longer be even considered as options.

Capella is a relatively new organization, founded in 2005 with a $200 million infusion of capital from a private equity firm, GTCR Golder Rauner, which later followed up with an additional $200 million investment. The words "private equity firm" rightly cause a shudder in the Rogue Valley, where its signature company, Harry & David, was gutted by just such a firm. Capella is not a private equity firm itself, but there is no question that anytime private equity firms are involved, return on investment is a major driving force.

That doesn't mean Asante is necessarily the best choice; we don't know the details of the proposals that have been put forth. As the 800-pound gorilla in regional health care, it certainly comes in for its share of criticism.

We don't for a second suggest that ACH accept a bad deal to get a suitable partner. But hospital administrators and board members — and City Council members, who ultimately have to sign off on any deal — must make sure the community will be comfortable with the fit before taking the relationship to the next level.

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