In the cutthroat world of health care, small, rural stand-alone hospitals like Astoria’s Columbia Memorial Hospital struggle to stay alive. Their mission may be to heal the sick, but their everyday goal is to stay out of the red.

CMH must make smart business decisions to survive.

Unlike Providence Seaside Hospital, which is part of the multi-state Providence Health System network and has support from a special taxing district, CMH has no umbrella organization to lean on. Even though CMH is affiliated with the Lutheran Church, it receives no financial help from the church.

Last month’s grand opening of the Health and Wellness Pavilion at CMH was the latest in a number of developments in the North Coast health care sphere. Health providers of all kinds -private and public – are investing millions of dollars in new clinics and state-of-the-art diagnostic equipment here. In at least one case, high-tech diagnostic scanners have been installed across the street from each other.

The focus on health care appears good for patients in terms of choice and convenience. Health care is also good for the regional economy because it adds scores of reasonably paid, stable jobs.

But all this investment begs the question: Is it too much? Can a county of 35,000 people support it?

Big price tag, little countyMRI scanners come with a price tag in the millions of dollars. Some in the medical community say the money spent on high-tech diagnostic equipment would have been better spent on health education and making sure all Clatsop County children have up-to-date vaccinations, eye exams and dental care, for example.

“Communities throughout Oregon are facing challenges with their health care,” says Bob Duehmig, communications director for the state Office of Rural Health. “They (MRI scanners) are expensive machines,” he says. “But communities need to decide how to spend their money.”

“It does seem like quite a bit of capacity for Astoria,” says Jana Fussell, in the public health division of the Oregon Department of Human Services. In the past, the purchase of medical equipment costing $1 million or more would have required a certificate of need from the state, but that law expired more than a decade ago. Still, Fussell says, “Lots of times, you build it and they come.”

Meanwhile, Providence Seaside has recently added a CT scanner and digital mammography equipment and is in the process of remodeling and expanding its surgical suite. It has also expanded into CMH territory with a walk-in clinic in Warrenton’s Youngs Bay Plaza.

And Dr. Sonny Park, a private provider, has built a medical complex right across the street from CMH and kitty-corner from CMH’s own three-story Health and Wellness Pavilion building, which opened May 5.

So amid all this competition from all sides – including some literally on its doorstep – will CMH be able not only to hold its own, but to thrive?

Its leaders say yes, by transforming CMH into a regional medical center. The new three-story, 38,300 square-foot Pavilion is part of a strategic plan and a springboard to its key element: Building a brand-new hospital, perhaps as soon as 10 years from now, in a location where there’s room to grow, according to Terry Finklein, CMH’s chief executive officer.

The location of any new hospital is a mystery, however. Hospital officials won’t say where they are looking.

Maxed outThe existing CMH building at 2111 Exchange St. is sandwiched between the high school football field and the Health and Wellness Pavilion, with a hillside behind it and the Park Medical complex across the street. The hospital was built in the 1970s on fill land, and in a tsunami inundation zone. Over the years, a medical office building has been added on the west side of the hospital, a maternity wing has been tacked onto the east side, and several small offices have sprung up on the south side.

At this point, the CMH campus is just about maxed out.

Finklein is looking for a location with ample room for expansion. A 50- to 75-acre property would be ideal, he said, “so that we could have not only room to develop our current services and collateral services that support the hospital, but we would also have room to expand in the future and not become landlocked like we currently are.”

Finklein says the decision to open an Urgent Care Clinic on the first floor of the Pavilion building was linked to a study that showed the community needs more access to primary care. An urgent care clinic is a way to address that need without competing directly with primary care physicians. CMH’s urgent care clinic is staffed by an experienced certified nurse practioner under the guidance and support of the hospital’s emergency room physicians. Finklein said the support of the ER physicians is really important.

“We feel we’ve got the complement, the best of both worlds,” he said.

Meanwhile, Providence’s walk-in clinic in Warrenton, staffed by three physicians, opened last month. The urgent care clinic in the Park Medical Building had its grand opening May 31. Finklein said it’s a for-profit model run by physicians from the Gresham area, which he said is unlike CMH’s urgent care clinic. “Our mission is to provide access for any and all individuals regardless of their ability to pay,” Finklein explained, “and so we felt that that (Dr. Park’s) urgent care program would not hit the entire target that we needed in our community.”

Leadership is the keyAmid all the investment in machines and buildings, people inevitably make the difference.

Finklein has been Columbia Memorial Hospital’s CEO for 18 years. That’s amazing longevity, given that the average tenure for a hospital CEO is three years. At 61, is he ready to guide CMH through an ambitious and expensive expansion?

Members of the hospital’s board of trustees certainly think so. Despite the hospital’s link with the Lutheran church, new board members are selected by other trustees, although church authorities are informed of prospective newcomers as a courtesy. All board members interviewed for this story said they support the strategy of looking for a new site; all appear to support Finklein.

Nancy Veltkamp, the board’s president, expressed complete confidence in Finklein’s ability.

“Terry is the perfect person to lead the organization. I think we’re on the right track. We need to expand our services,” Veltkamp said. “I think there’s a great need for health care in this community.”

And she said she is pleased that Erik Thorsen, the hospital’s former chief financial officer, has stepped up into a leadership position as chief operating officer. Thorsen used to work at Ilwaco and Longview, Wash., hospitals, in financial leadership roles, although it is clear from interviews that his expertise extends well beyond financial matters.

Thorsen fills a void left by the mysterious departure of Memphis, Tenn., native Bill Thorn, a professional health administrator from Portland who was introduced around the community – including at a very cordial meeting at The Daily Astorian – as Finklein’s heir apparent last year.

What happened to Thorn? It depends on whom you ask. Sources have told the newspaper that a survey of hospital staff’s attitudes revealed a lack of confidence in his leadership style. The person who conducted the survey prefers not to talk. Finklein will say only, “Yeah, Bill. A great guy but he just wasn’t the right fit.”

There was no public announcement – Thorn’s name simply disappeared from the hospital’s Web site and no one saw him again.

Finklein is taking no chances this time around. He dodges any questions about Thorsen’s ability to succeed him, while still praising the young man’s qualities. It is clear Thorsen will run day-to-day operations while Finklein steps back to look at the big-picture of the hospital’s future.

Strategy supportedBut why has the hospital invested in a $13.5 million medical building while simultaneously planning to construct a brand new campus?

Veltkamp, the board president, supports the strategy.

“We’re trying to get the Health and Wellness Pavilion filled to capacity and then go from there,” she said. She expects that to happen quickly, because the population is changing and growing. “Change and growth will dictate when and where,” she said. “Nothing has been ruled in or ruled out.”

Veltkamp said the large number of patients already using the Health and Wellness Pavilion and the new urgent care clinic demonstrate how much the community needs the medical services CMH is providing, such as cardiac rehabilitation and high-tech imaging.

The goal is to provide what patients need right here, so they won’t have to travel to Portland – a factor made doubly important with skyrocketing gas prices.

“We want to keep our community home. I can’t imagine being on the road having some of the conditions people describe,” Veltkamp said.

CMH disputes city studyThe public discussion of a new hospital site at a brand-new campus – initiated by The Daily Astorian after several months of rumors – follows years of headlines about the future of neighboring John Warren Field. That’s where Astoria High School’s football team plays its home games. To expand there, CMH would have had to find a location and build a new athletic field – and relocate the school district’s nearby bus barn.

It would have cost an estimated $5 million to $7 million to fund a replacement, according to Dave Phillips, a retired college administrator and a hospital board member since 1981. He said most of the board considered that option too expensive. “We would rather put the money into healthcare,” Phillips said.

A new hospital will cost in the neighborhood of $50- to $70 million – a hefty price tag, especially for a stand-alone hospital like CMH. The plan, according to Finklein, is to use the Pavilion building as collateral for the loans needed to build it.

Finklein and CMH Marketing Director Steve Buckelew said although they haven’t ruled out Warrenton, which has much more vacant land available, they are looking for land in Astoria. Lending credence to that statement, CMH intervened when the city of Astoria started drawing up a list of its “buildable lands.”

The hospital hired a lawyer to dispute the results of the recent buildable lands inventory that a consultant prepared for the city. The City Council agreed, and directed city staff to work with the state Department of Land Conservation and Development on a more detailed study.

The new figures will likely show that Astoria’s urban growth boundary does need to be expanded. And that, Finklein said, would benefit the city and make additional land available for the hospital’s 20-year vision for expansion.

Regional goals eyedLike Veltkamp, Peter Strandberg, a member of the hospital board since 1983, sees CMH becoming a regional medical center.

“My vision is to keep our people in town, so they don’t have to go 100 miles for their cancer treatment, for a broken bone,” he said. As for the existing hospital building, “We can see our building is not up to snuff. All options are on the table,” Strandberg said.

He trusts Finklein’s leadership. “Terry is probably one of the longest-tenured hospital CEOs in Oregon … With Erik Thorsen and Leslie Blasewitz (Chief Clinical Officer), he has a very strong team there,” Strandberg said.

“Terry – he’s really on top of it,” agreed Ed Nelson, a retired U.S. Coast Guard admiral who has been on the hospital’s board since 1991.

“I’ve been judging people for a long time. We’re very fortunate. He’s an honest guy and a straight shooter.”