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The question now is whether hospital board will file appeal over alliance

Public Hospital District No. 1 commissioners could appeal a decision by a King County Superior Court judge last week to dismiss a lawsuit challenging the strategic alliance with UW Medicine.

Dr. Paul Joos, the hospital commission president, said after the decision by Judge Michael Hayden Dec. 28 the board will decide in January whether to appeal. The next commission meeting is Monday. An agenda isn't yet available.

Joos declined to comment further after the hearing.

The case for UW Medicine was argued by attorney Lou Peterson, who was appointed as a special assistant state attorney general, and Phil Talmadge, a former state Supreme Court justice, argued the hospital commission’s case.

Talmadge in an interview following the hearing said he would recommend appealing the decision directly to the Washington Supreme Court.

He said the previous commission overstepped its statutory authority to enter into its alliance with UW Medicine.

“This case boils down to the question of whether elected officials of the Public Hospital District can relinquish their core responsibilities as elected officials to a group of largely unelected appointed trustees for a period of 15 years in order to preserve the extensive financial benefits coming to the district’s former CEO,” Talmadge said. “The answer to that question is no.”

Talmadge was referring to the salary and benefits paid to Rich Roodman, the  CEO of Valley Medical Center. Before the alliance, Roodman was also the hospital district’s superintendent, its top executive post.

Talmadge points specifically to the commission’s responsibility to prepare a budget. Under the alliance, the Valley Medical Center’s 13-member board of trustees that includes the five hospital district commission writes the budget for the medical center.

Hospital district commissioner Dr. Aaron Heide resigned as a trustee in October, so only four commissioners are trustees.

The commissioners hold a hearing and set a budget for the hospital district, which owns Valley Medical Center.

Talmadge said the case is not a referendum on the alliance between UW and the hospital district commission, which he said is interested in keeping the relationship with UW Medicine.

Talmadge pointed out that Peterson offered no restraints on the scope of the district’s ability to delegate core elected commissioner responsibilities to an unelected group.

Peterson disagrees with Talmadge’s analysis of the commission’s powers.

“In fact what it (the commission) has done is exercise the powers granted to it under the statute that authorizes public hospital districts,” he said of the commission. “So far from giving up powers, it was actually exercising its power.”

That power includes allowing the district to form an alliance with the University of Washington and form a joint board to operate the alliance, he said.

Talmadge and Peterson spent about 45 minutes arguing their cases, with Hayden asking questions of both. The attorneys had already submitted written legal briefs to Hayden.

They pointed to legal precedence that they say supports their positions.

Peterson laid out the public process the hospital district and UW Medicine followed in vetting the alliance, which was approved by the commission in May 2011 on a 3-2 vote.

In the intervening 18 months the UW Medicine and Valley Medical Center have been implementing the alliance, a process that is continuing. And Joos was elected to the board, which changed the policy direction of the commission.

“No one has stepped forward since while this very successful alliance has been implemented to say, ‘Hey, it’s a bad deal, it doesn’t work. We want something different’, except the public hospital district itself,” he said.

The powers of a hospital district spelled out in the Revised Code of Washington include buying real estate and levying taxes. The code also allows the commission to delegate those powers to other agencies to deliver the services more efficiently, he said.

Peterson said the hospital district has not pointed to any law or act that supports its position.

“They haven’t done it because they can’t,” Peterson said.

In issuing his ruling, Hayden said state law allows local governmental organizations to enter into such agreements. Any disagreements about the laws, he said, should be raised with the state Legislature.

Hayden alluded to the possibility of an appeal.

The agreement, he said, “was entered into knowingly after a lot of thoughtful process.

He also said he was making no comments on whether Valley Medical Center salaries were too high.

Talmadge indicated he didn’t think appealing the case is “going to be all that more expensive.” The issues, he said, are “pretty well organized” because of the hearing before Hayden. His bill for an appeal to the state’s highest court would be about the same or a little less than the $25,000 to $30,000 he charged to represent the district before Hayden.

The Supreme Court would have to agree to hear the case, a significant indication the court thought the issues were sufficiently important to bypass the state Court of Appeals, he said.

Appealing directly to the Supreme Court would save 15 to 18 months of time and additional taxpayer money, he said.

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