Kelsey Creek nursing home to be sold

Group Health Cooperative yesterday announced plans to sell its Bellevue nursing home — leaving more than 100 elderly patients and 250 staff members facing uncertainty through the holiday season.

Group Health has run the Care Center at Kelsey Creek for 11 years, providing a combination of long-term and short-term nursing and hospice care.

But now the health-care provider and insurer is looking to streamline operations and reverse a recent plunge in its fortunes. The board of trustees has directed management to seek a buyer, although any offer will need board approval.

The announcement comes three weeks after Group Health said it would close its Center for Attention Deficit Disorders in Redmond and two months after it closed the birthing unit at its Eastside Hospital. The cooperative still is discussing the future of Eastside Hospital and plans an announcement by the year's end.

The news has been hard for staffers and patients, said Sherry Stoll, an administrator who oversees Kelsey Creek as well as the cooperative's two hospitals in Redmond and Seattle.

"Some of the patients have been here a long time and are comfortable with the facility and the care they receive," Stoll said. And many of the long-term staffers "see themselves, with the residents, as family," she added.

While Group Health would prefer another health-care provider to step in, there is no guarantee a buyer would continue to operate the home, Stoll said. Should it close, Group Health would assist in transferring patients to other facilities, she said.

Group Health purchased the 4.8-acre home when it was under construction in 1991. It has 57 beds for those who need intensive short-term nursing but do not require hospitalization, 61 beds for long-term patients, and 18 beds for those in advanced stages of incurable illnesses. The center averages 104 patients per day.

Because the facility is the only one of its type owned by Group Health, there is little opportunity to benefit from economies of scale, said spokeswoman Lee Tucker Therriault. Patients and staff members already have been told of the plans, she said.

There will be no immediate changes for any patients or staffers, Therriault said. But the cooperative hopes to finalize any sale by mid-2003.

Union leaders are already discussing plans with Group Health, said Chris Barton, secretary-treasurer for the Service Employees International Union 1199 Northwest.

"We have very grave concerns about the level of job loss in health care," Barton said. "This will put a burden on the community in terms of people out of work."

Group Health has been trying to bridge an estimated $30 million budget gap this year. It has eliminated 205 positions and laid off 150 people since identifying the deficit in June. Chief Executive Officer Cheryl Scott also took a voluntary pay cut of 20 percent on her $553,000 salary.

In a speech last month, Scott said Group Health is losing 1,000 to 2,000 of its 600,000 members per month and that it has seen cost increases of 13 or 14 percent this year, rather than the budgeted 8 or 9 percent.

Scott said the group is cutting back on periphery services and expenses, investing in technology and offering direct access to consultants to reposition itself in the marketplace, survive and eventually grow.

Nick Perry: 206-515-5639 or nperry@seattletimes.com.