Hospitals challenge state's OK for Swedish in Issaquah

Four hospitals have filed a joint appeal with the state Department of Health over its recent decision to allow Swedish Medical Center to build a 175-bed hospital in Issaquah, officials said Friday.

Overlake Hospital Medical Center of Bellevue, Evergreen Hospital Medical Center in Kirkland, Snoqualmie Valley Hospital and Children's Hospital and Regional Medical Center in Seattle argue that the approval concentrates too many hospital beds in one part of the Eastside.

The appeal will be heard by a state health-law judge. No date has been set.

"The state Department of Health really didn't do its job the way it's supposed to do its job," said Caitlin Hillary, Overlake's vice president of strategy and marketing. "They did a very fast, rubber-stamp approval. That seems irresponsible to us."

Both Swedish and Overlake have been vying to build in the fast-growing Issaquah corridor and submitted applications to the state in 2004. They were rejected in 2005 because the state said there were enough beds on the Eastside to serve residents' health-care needs for 10 years.

After a series of legal challenges, that decision was reversed, and Swedish was granted permission June 1 to build its hospital. The ruling marks only the third time in 24 years that the state has approved the construction of a new hospital.

State officials say they stand by their decision. Bed need is fluid, they say, and subject to demographic shifts.

"There isn't a finite number of beds for one area," said Janis Sigman, program manager for the state's certificate-of-need division. "If the Eastside has a huge explosion of population, and someone wants to submit a new application, we would take another look."

She said the state looked at East King County as a whole — not just the Issaquah/Sammamish area — to determine how many beds were needed for the next 10 years and beyond. That's exactly what Hillary and others say is a fundamental flaw.

According to the decision, Swedish must build its 175-bed hospital in three phases. The last phase, expected to be complete in 2018, would consist of 55 beds.

Kevin Brown, chief strategic officer for Swedish, said he expected the appeal, but stressed that plans are on track to get the hospital open by its target date of 2012.

He lives on the border of Issaquah, he said, and "people are anxious to have these hospital services close to home. It's the last piece of infrastructure that completes the community."

Swedish will spend two years planning the hospital and two years constructing it.

But if the state's decision is overturned through the appeals process, then Swedish would have to put an end to its project, Sigman said.

"They move forward at their own risk," she said.

Sonia Krishnan: 206-515-5546 or skrishnan@seattletimes.com