Idaho's Kootenai Health advances nonprofit conversion with white paper

Coeur d'Alene, Idaho-based Kootenai Health has taken another step forward in its proposal to convert from a public health system to a private nonprofit entity.

In a Feb. 22 filing, the health system, which operates four hospitals in Northern Idaho with 392 licensed beds, presented a white paper outlining the advantages of such a conversion. Such advantages include greater flexibility in raising investment and fewer obligations in an increasingly competitive market.

"As competitors enter the market, KH is disadvantaged by public disclosure and open meeting requirements," the paper said. "As a result, KH cannot progress key initiatives as rapidly as needed."

Only about 20 hospital systems of a similar size in the country maintain public ownership as district hospitals, the paper outlined. As one of the fastest-growing counties in the country, maintaining the hospital system as a publicly owned one would disadvantage Kootenai Health from progressing key initiatives to match such growth, the paper said.

Kootenai, which employs over 4,000 people, has engaged several third-party legal counsels and advisory firms to assist in the evaluation. 

The system, which reported projected full-year 2022 losses of $45 million, has not levied property taxes as a publicly owned hospital system since 1995.

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