Industry Pulse (August 2008)

SEATTLE – Swedish Health Services might be the dominant healthcare provider in the Seattle environs, but four area hospitals are making a legal effort to stop the system from making further inroads in the marketplace. The hospitals have their sights set on overturning a 2007 administrative judge’s ruling that paved the way for Swedish to build a 175-bed hospital on 18 acres in the Issaquah Highlands – a planned community located in the far eastern metropolitan area. The hospitals say they are prepared to go to court if their most recent legal effort fails. But Swedish officials say they are moving ahead with their plans for Issaquah, where initial plans call for the development of an ambulatory care facility and medical office building (MOB) by late 2010. The first phase of the hospital would be complete by 2012, with a couple of expansions planned during the remainder of the decade. Three of the hospitals protesting Swedish’s plans are located east of Seattle: Overlake Hospital Medical Center in Bellevue, Evergreen Hospital Medical Center in Kirkland and Snoqualmie Valley Hospital in Snoqualmie. Also involved in the legal battle is Seattle-based Children’s Hospital and Regional Medical Center. Swedish received Certificate of Need (CON) approval in recent years from the Washington Department of Health. After the hospitals challenged the ruling, an administrative law judge upheld the CON in May 2007. Three years ago, Swedish built a freestanding emergency room and outpatient facility in Issaquah that offers primary care, lab services, imaging center and other specialty care services. The protesting hospitals say the state should not have awarded all of the beds needed in Issaquah to Swedish. Instead, local hospitals such as Overlake and Evergreen should have received some additional beds as part of a plan to keep up with demand.