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Frustration with PeaceHealth has become a political issue

Candidates: Create public hospital district or change the tax break

The front entrance of PeaceHealth St. Joseph Medical Center has multiple cars parked at the parking lot.
Service cuts at PeaceHealth have caught the attention of Cascadia Daily News readers who participated in the newspaper's election coverage, based on the Citizens Agenda model. Readers want to know, can local governments fix this problem? (Hailey Hoffman/Cascadia Daily News)
By Ralph Schwartz Staff Reporter

Readers participating in this newspaper’s election coverage think their government leaders should fix the PeaceHealth problem. 

Critics of Whatcom County’s largest health care system say significant cuts to services and a push for providers to see more patients have compromised quality of care. 

PeaceHealth cut several programs, including its allergy clinic and outpatient palliative care, citing financial hard times brought on by the COVID-19 pandemic. (The palliative care program will return in early 2024 after significant community pushback.) Meanwhile, mid-level providers, including physician assistants and nurse practitioners, say management has pressured them to see more patients to the detriment of patient safety. 

Some of the most popular Citizens Agenda questions CDN received from readers this year suggested that PeaceHealth no longer provides enough public benefit to earn the tax breaks it now enjoys from the City of Bellingham. The frustration has also prompted a mini-groundswell of support for a new approach to health care in Whatcom County, through something called a public hospital district.   

The tax exemption is within the City of Bellingham’s purview. County government could get the ball rolling on a public hospital district.

PeaceHealth’s tax break

In 2014, the Bellingham City Council eliminated PeaceHealth’s business and occupation tax exemption for religious health care providers, replacing it with B&O exemptions for nonprofit health care institutions. The result was an estimated $1.2 million increase in PeaceHealth’s tax payments at the time.

Now, some citizens are questioning whether PeaceHealth is worthy of even these reduced exemptions. 

Liz Darrow, candidate for Bellingham City Council Ward 3, supports the idea of removing PeaceHealth’s tax exemption. She would like to see the added tax revenue go toward crisis prevention or other behavioral health care.

“I think leveraging that tax money, in a way that would help our community in crisis, would be fantastic,” Darrow said. “I would support that.”

Dan Hammill, the Ward 3 incumbent, would take a more measured approach, saying it would “be impossible to render a decision” until he knew more about how a tax hike might adversely impact PeaceHealth’s services.

Similarly, Eamonn Collins, who is challenging Hannah Stone for her Ward 1 seat, said he would be “wary” of ending PeaceHealth’s tax exemption.

“Since we only have one hospital right now, I would worry about doing anything that was going to be disruptive of the health care services that our community depends on,” Collins said.

In a prepared statement, Ward 1 incumbent Stone said she didn’t see how eliminating PeaceHealth’s tax exemption would do any good. 

“I don’t believe that an elimination of this deduction would support or encourage expansion of health and social welfare services,” she said, adding that she would support “modifications to the code and other proactive measures” to help bring additional health services to the community.

Bellingham mayoral candidate Kim Lund said she would seek to hold PeaceHealth more accountable if elected. After a recent meeting with PeaceHealth CEO Charles Prosper, Lund said she wasn’t convinced the not-for-profit’s concept of its own benefit to the public aligned with what the community really needed.

In an interview with Cascadia Daily News, Lund said she told Prosper, “There’s been a fundamental erosion of trust, so how do we repair that?”

Incumbent Mayor Seth Fleetwood sympathizes with PeaceHealth in the complex situation it finds itself in.

“In my experience, they are respectful and collaborative and responsive,” Fleetwood said, citing PeaceHealth’s decision to reinstate outpatient palliative care in response to public pressure.

Public hospital districts

Another idea gaining currency is a public hospital district for Whatcom County, to provide health services not being offered by PeaceHealth or other providers. 

Despite its name, a new hospital district wouldn’t necessarily build a new hospital — although some local candidates have asserted that one hospital isn’t sufficient for the county’s population. A wide range of options are possible with hospital districts: emergency clinics, behavioral health care facilities, long-term care — whatever the community needs, as determined by the district’s elected commissioners.

Commissioners may decide to levy a property tax, to help cover the cost of services. In any case, typical hospital districts in Washington receive more than 95% of their revenues from patients, according to the Association of Washington Public Hospital Districts.

County council at-large candidate Jon Scanlon wants to investigate whether a public hospital district could solve some of Whatcom County’s health care problems, particularly a lack of rural care.

“A lot of the rural communities and small cities in the county have lost primary care,” Scanlon said, which results in less preventative-care visits and a greater burden on EMS and the county’s sole emergency department at PeaceHealth St. Joseph Medical Center. 

“I think we can help relieve that burden by having more primary care in rural areas,” Scanlon said.

Hannah Ordos, Scanlon’s opponent, is open to the idea of a public hospital district but said she wouldn’t argue for or against it until she heard from her constituents.

“My own personal opinion about something shouldn’t be what motivates me to make a certain decision,” Ordos said.

Ben Elenbaas, incumbent in council District 5 — Point Roberts, Blaine, Ferndale, Lummi Nation and Lummi Island — had reservations about creating a new taxing district for health care. 

“I’ve very rarely seen the private sector not be able to outperform a government,” Elenbaas said. Even so, he added, “That is something I would contemplate putting to the voters.”

Jackie Dexter, who is challenging Elenbaas in District 5, is critical of PeaceHealth and supports the idea of a public hospital district.

“We definitely need to have a public, community-based health care system, and it doesn’t have to be religious,” she said.

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