Healthcare task force limited by hospital legal structure

If the Kenai Peninsula Borough’s Healthcare Task Force wants to make changes to how the hospitals operate, it will have to address some roadblocks in the current governance structure first.

The task force, which has been meeting regularly since last fall to examine possibilities to reduce the cost of health care on the Kenai Peninsula, took its June 29 meeting to discuss one of its main deliverables — how the borough should structure its hospital operations. The borough owns both Central Peninsula Hospital and South Peninsula Hospital and leases them to operating boards, which technically operate independently of the borough administration but still report back.

Several people have suggested ways for the hospitals to work together or change to make health care more efficient. However, because the Kenai Peninsula is a second-class borough and does not have all the powers a first-class borough might, there are obstacles to just doing it.

Borough Mayor Mike Navarre said at the meeting the hospitals are sometimes limited from making business decisions because they have to ask the borough assembly for approval on purchasing decisions greater than a certain amount. It has worked reasonably well in the past several years, but the hospitals have asked for more independence on decisions in the past.

“How do you allow that flexibility and at the same time maintain some level of responsible oversight?” Navarre said.

The health care task force designated members to split up into small working groups earlier this year, focusing on individual items such as emergency services and mental health and substance abuse treatment. The emergency services group has also butted up against government structure limitations, said Stormy Brown, who serves on that working group.

“Can we do this with the limitations we have without health powers?” Brown asked. “Can we even create a provider directory, which is where the subcommittee started and we had to stop, because we don’t have the authority to do that borough-wide? We bump up against this in places probably we shouldn’t.”

Dr. Katy Sheridan, a member of the task force, said adopting borough-wide health powers — similar to the regional structure Navarre originally proposed in November 2015 to the task force — would help address some of the gaps in emergency service transportation as well as some of the collaborations between the hospitals.

“I guess in my mind, the question is, we can still have individual lease and operating agreements with each hospital — they can operate in individual forms, but if we don’t change our overall governance structures, which the mayor has alluded to as antiquated … I’m concerned we’re really going to have our hands tied whether we can do some of these collaborations that we actually need to do,” Sheridan said at the meeting.

Central Peninsula Hospital CEO Rick Davis presented a project the hospital administration has been working on called a Clinically Integrated Network, which would establish a network of providers in the community better coordinating care to save peninsula residents money by not duplicating services or having to send them elsewhere. Other cities and states have already implemented similar structures, Davis said.

The network would connect multiple physicians employed in different practices to deliver better care for patients, preventing more worse and more expensive outcomes later. He gave the example of mental health patients taking up beds in the hospital’s emergency room, making other patients wait, while mental health counselors are available across the highway at Peninsula Community Health Services.

“Imagine having a care coordinator making a telephone call Wednesday to these folks, asking them how they are doing, doing a home visit, getting them into the appropriate care that they might need Thursday, as opposed to waiting until Sunday when they’re suicidal and end up in the ER,” Davis said. “That’s easy to hire somebody to make those calls, put together a coordination path with PCHS. We don’t really have that mechanism in place.”

Many members of the task force said they approved of the idea and would like to see it move forward.

But again, there may be limitations by the governance structure — Navarre asked whether it could be implemented under the current structure because the hospitals cannot legally operate outside their service areas, and Davis said the hospital’s legal team was still reviewing it before making any decisions.

Navarre said he was concerned that the differential in access to capital among the three areas of the peninsula would make it difficult to create a borough-wide integrated network.

“I see some potential certainly with the Clinically Integrated Network — we have to do something — but I also see some significant potential for special access to capital,” Navarre said.

The task force identified four goals in its charter, including an evaluation of the current state of the borough’s health care delivery system, recommendations and an evaluation of alternate health system delivery models or strategies, a recommendation for a borough hospital structure and a transition road map for the final recommendations. However, none of those goals has been reached yet.

A small group will begin to address the third goal, a recommendation for the borough hospital structure, throughout the summer and return to the general task force with a draft.

The task force’s next meeting is scheduled for Sept. 21.

Because of scheduling conflicts in the summer, the task force decided to wait until September to give the work groups sufficient time to meet and produce work for the task force to review.

Elizabeth Earl is a reporter for the Peninsula Clarion. She can be reached at

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