Hospice of the Northwest in talks to sell to private equity firm

For more than 30 years, San Juan County residents in the last stages of their lives have turned to Hospice of the Northwest.

The public agency is owned by Skagit Regional Health Care District 1 and United General District 304, and the two are considering selling it to Bristol Hospice, a for-profit subsidiary of Webster Equity Partners, a Massachusetts-based private equity firm. Bristol operates 33 for-profit hospice centers across the country.

San Juan County hospice volunteers and residents are concerned that the impending sale could result in substantial changes to coverage for island residents.

“The risk is that companies boost profits by cutting staff, increasing caseloads and limiting home health care,” according to Lynnette Wood, chair of the Orcas District Committee, which manages the Orcas Senior Center. “Services may also be reduced, especially to areas where it is more expensive to operate, such as San Juan County.”

A local petition has been started to halt the sale: https://www.change.org/p/public-hospital-district-304-keep-hospice-of-the-northwest-locally-owned-and-operated.

According to a story in the Skagit Valley Herald, the two public hospital districts received an unsolicited offer from Bristol more than a year ago and are “still exploring whether a sale could maintain or improve hospice operations.”

An employee of HNW, who wished to remain anonymous, said the staff was just notified of the potential sale on Oct. 14.

“On Oct. 22, the CEOS of the two hospital districts and Bristol Hospice reps came in to say how wonderful Bristol is,” said the employee. “Bristol is very very different from us.”

Fifteen employees from HNW spoke in opposition to the sale at a Skagit Regional Health Board of Commissioners meeting on Friday, Oct. 23.

Trish Lehman, a San Juan County Public Hospital District No. 1 commissioner and a former registered nurse for HNW, confirmed the employee’s timeline. Lehman spoke at the hospital district’s regular meeting in Friday Harbor on Oct. 28.

“Webster’s mission is to deliver superior returns to partners and investors and is absolutely not patient-centered,” she said. “They put their focus on the easiest patients making the most money. Our care out here in San Juan County will be deeply affected.”

She posits that the two Skagit hospital districts have an ulterior motive for selling, saying HNW is financially solvent and a “cash cow.” Lehman also said that she spoke to Brian Ivie, CEO of Skagit Regional Health, who guaranteed it wasn’t financially driven but rather because Bristol could provide better leadership.

“We get exquisite care. I’m devastated by this,” said Lehman.

A story by the Harvard Business Review asserted that private investment in U.S. health care has “grown significantly over the past decade thanks to investors who have been keen on getting into a large, rapidly growing, and recession-proof market with historically high returns. Private equity and venture capital firms are investing in everything from health technology startups to addiction treatment facilities to physician practices.”

The National Partnership for Healthcare and Hospice Innovation commissioned a Milliman study on the differences between not-for-profit and for-profit hospices.

The findings included: not-for-profit hospices have an aggregate net margin of 3.0% vs. 19.9% for for-profit hospices; not-for-profit hospices provide patients with 10% more nursing visits, 35% more social worker visits and two times as many therapy visits vs for-profit hospices per patient day; and for-profit hospices report spending less than half what nonprofit hospices report on bereavement services.

Bob Laws, executive director of HNW, says the possible sale is still in due diligence.

“So we don’t know what the final company structure would look like,” he said. “No matter the structure, the owners of Hospice of the Northwest have committed that any agreement must retain the incredible level of support to all of the communities they serve, including San Juan County.”

Debra O’Conner is one of two HNW nurses assigned to SJC, currently caring for 25 patients. Both nurses travel between the islands.

“This is a very unique organization,” said O’Conner, who has been with the agency since 2018. “The care we offer is incredible. I’m only available four days a week but because of the support from the staff in Mt. Vernon patients always have someone available. Our doctors are so dedicated and tailor their care to each patient.”

O’Conner said that HNW is considered the gold standard in the healthcare industry, receiving a standard of excellence rating from the Community Health Accreditation Program, an independent, not-for-profit accrediting body for community-based health care organizations.

“We received a nearly 100 score. We were told we should be a model for all hospices across the country,” O’Conner said.

HNW has been serving Skagit, Island, San Juan and Snohomish Counties since 1989, providing access to nursing, medical, social and spiritual professionals, who “demonstrate compassion and dignity in the care they provide to patients facing serious illness and the loved ones who care for them,” according to the website. It has an administrative building in Mt. Vernon and all of its services are provided in patients’ homes or in a care facility. HNW also offers hospice services to the homeless.

Although San Juan and Lopez have volunteer organizations — Hospice of San Juan and Lopez Hospice and Home Support — only HNW can provide around-the-clock access to nursing support and other resources for end-of-life care. Patient care is funded by Medicare hospice benefits, Medicaid, private insurance or HNW’s charity care. The Hospice Northwest Foundation, a 501(c)3, fills the gap in insurance funding.

“There is no outlay in costs to the family — zero dollars,” O’Conner said.

She added that nearly 99 percent of the employees of Hospice of the Northwest contribute a portion of their paychecks back to the foundation because they are so passionate about their work.

“We are going to see an influx of patients as the winter progresses,” she said. “We also have more and more people who get a diagnosis in the city and they will say they’ll come live out their lives on Orcas.”

Wendy Coates, public information officer for HNW, stated that the foundation is a 501(c)3 nonprofit corporation governed by a volunteer board of trustees, and as such is not for sale.

“If a change in the hospice agency’s ownership were to take place, the mission, vision and goals of the HNW Foundation remain the same — to fund dignity and compassion every moment of life,” she wrote to the Sounder. “All assets held by the foundation are used in support of its mission and donor intent, and are under the control and management of the HNWF board of trustees. No assets of HNWF would be part of a sale. The Foundation remains committed to funding the expert, compassionate, and dignified end-of-life- care this community expects and deserves. The HNWF will continue to fund the programs and services that are outside of the Medicare Conditions of Participation for hospices (like: complementary therapies, community grief programs, education, direct patient assistance, etc). Our responsibility is to the community and not the agency (or the shareholders of an agency). There is no circumstance where a for-profit company would have access or control of the Foundation’s assets. The Foundation board will retain control of assets and governance. … Everyone involved in the delivery of hospice care hopes that the decision-makers approach this with careful consideration of all of the communities HNW serves.”

Mandi Johnson contributed to this article.