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CHAPTER 8:
THE NORTHGATE DILEMMA
Joseph J. Koutsky, M.D., a Northgate surgeon who was elected to the board in 1957 and who was to become the new hospital's first chief of surgery, was not one the board had to recruit.

"I kind of pushed my way on to the board!" he said. "I wondered why they didn't have some doctors from Northgate on it."

One reason, perhaps, was that North-gate and Northwest were embroiled in a bit of a power struggle.

Earlier in the decade, the Northgate Company had developed the top two floors of the medical/dental building on the shopping center grounds into a small, proprietary, for-profit hospital. In March 1957, the company announced that it was going to build a 200-bed hospital on land somewhere south of the shopping center.

The board at Northwest Memorial took the announcement in stride at first, but later began to take it personally. At a board meeting on May 15, 1957, board member Fred Baker suggested that the association "accept the Northgate announcement not as a serious threat but as a 'needle' to get us moving faster." He didn't think that the Northgate Company would build a hospital if it required their seeking public funds.

However, Dr. Gould then reported on a meeting he had had with Wells McCurdy on Tuesday, May 14, 1957. Mr. McCurdy had said that Northgate did plan to build a hospital and would lease a $400,000 piece of property for $1 a year. He would not tell Dr. Nelson the exact location of this land.

Mr. Baker changed his mind "and suggested we be a 'cold stone enemy' of the Northgate group rather than a militant one, as it appears this is a definite business move," according to the meeting minutes, and pointed out the most serious problem might be the influence of the Northgate Company's Jim Douglas on the "big givers."

Although Jim Douglas told Torchy Torrance that he didn't know whether the new, larger Northgate General Hospital would be for-profit or non-profit, Dr. Koutsky and many others were by then firmly behind the non-profit Northwest. "I originally was quite active at Northgate," he recalled, but "a lot of people had invested money in the hospital. I didn't think that was right."

It appears that Northgate General Hospital — or at least, the proposed new Northgate General Hospital — was non-profit at the time, as Hill-Burton funds were only available to non-profits and Northgate was a contender. However, it also appears that they reverted to for-profit status later, as the profit issue continued to frustrate attempts to merge in the 1970s, until, in 1984, Northwest Hospital bought the facility outright from then-owner National Medical Enterprises.

But in 1957 and 1958, Northwest Memorial and Northgate tried to find ways to work together. Although at a July meeting with Drs. Gould and Koutsky, Miss Warnecke, Northgate Hospital Administrator, said that she was not at all interested in joining with Northwest, or even meeting with the board, pressure from Governor Rosellini and Dr. Bucove, the acting director of health for the state, finally led the two groups to talk.

The direction from the Governor was polite, but clear. Board members Reuben Nelson, Lindsay Gould, Harry Givan, Chris Johnson, and Torchy Torrance met on October 16, 1957 with the Governor, Dr. Bucove, and Phil Austin, director of institutions for the State Department of Health, and Dr. Jones, also of the Department of Health. Their report to the board at the October 23 meeting was:

A half hour was spent in discussing the association's needs and requirements as far as the Hill-Burton funds were concerned. ... Dr. Bucove mentioned that the hospital [Northwest] had been endorsed by King County Medical, P.T.A., Commercial Clubs and civic organizations in the North End, and Dr. Bucove himself ... After considerable discussion Dr. Bucove mentioned the fact that the Northgate people had also applied for Hill-Burton funds and had secured property about the same distance south of their present Northgate property as we are north, at 97th and 1st N.E. After discussion, the Governor suggested that Dr. Bucove get the two groups together for an Olympia meeting and see if any joint effort can be worked out. It was not the Governor's expressed opinion or Dr. Bucove's that the Northwest Hospital Association would be denied Hill-Burton funds by reason of the Northgate application, or vice versa. Dr. Bucove indicated the enthusiasm of the organization and the feeling of the doctors in the North End have considerable bearing on the decision of the committee.

Contact was made, if not progress. Roger Shidler, attorney for Northgate General Hospital, told Northwest Memorial Chairman Charles Horowitz that Northgate's existing structure didn't conform to city restrictions and they had to build or remodel, and chose to build. "The point at issue," November 6, 1957 meeting minutes report, "is that we want our hospital and they want theirs, each on his own location. If we insist on our location, they will not work with us, however they will not interfere with our campaign. He stated the reason they had gotten out some publicity was because the merchants wanted to know if the Northgate people were going to have a hospital, and they felt it necessary to tell them. ... Their reason was not to interfere with us but only inform the merchants. He further stated they had property worth $450,000 on which to build, in an area on top of a hill with a view of the present Northgate."

This property was an area of fewer than five acres, compared to Northwest's 33.

At a stalemate, the two groups met in the Governor's office on November 25, 1957. At Governor Rosellini's request, Northwest Memorial President Harry Givan met with representatives of Northgate several times after that in an effort to effect a merger.

The results were not encouraging. In a January 15, 1958, letter to the Governor reporting on these meetings, Mr. Givan wrote of the difficulties involved. He had reviewed Northgate's financial statements, gone over what each had to bring to a merged hospital, and came to the conclusion that a merger was not possible at that time:

...we were very surprised to learn from Mr. Shidler that under no circumstances would they join with us to build a hospital at our site, nor would they agree to pledge or put up as much as $350,000 in cash if we were to join with them at their site. (A site not presently owned by the Northgate General Hospital Association, according to their financial statement of November 30th, 1957.)

Meanwhile, in a further effort to find a common ground for some kind of merger, Dr. Lindsay Gould and Dr. Joseph Koutsky, members of our board, held an informal meeting with four doctor members of the Northgate General Hospital board. This meeting was held on December 3, 1957. The Northgate doctors further confirmed Shidler's statement that under no circumstances would they consider merging with us for a hospital on our site.

Our doctors summarized the attitude of the Northgate doctors as being one of extreme apathy ... that if we wanted to contribute the money we have raised and sell our land and contribute the proceeds from that sale, they would accept it and tie it into their building program if or when they decided to build.

I would like to point out that all of the meetings held were at our instigation, and we came away from all of them with the feeling we were getting no closer to a merger than we were when the joint meeting was held in your office...

In light of our recent conversation with the Northgate people we now are convinced that in the best interest of the North End communities we must take what assets we now have and commence construction of a hospital this spring on our land.

Our working drawings — prepared with suggestions from the Washington State Health Department — have been completed. Our architects inform us we can have a basic operating unit at a cost of $1,300,000. With cash, pledges and our mortgaging ability we believe we can build this unit. ...

... It was our earnest hope that ours could be the first of conflicting hospital groups in this State to get together on one common project. We believe we have made a sincere effort, and it has failed. ...

Our only concern with this hospital is to protect the welfare of the people in our North End communities. We sit here ready to meet the problems: our site bought and paid for, working drawings completed, money in the bank, substantial pledges already in. We are anxious to forge ahead and see a general hospital materialize in the North End.

While discussions with Northgate continued well into 1958, the two parties never got any closer to an agreement. Northgate insisted on its site, and Northwest Memorial insisted on its site. In truth, it seems Northwest had more to lose from a merger. The original contributors might demand their money back, the tax case might very well be endangered, and the board of trustees would lose faith with the doctors and business people who had supported them with their time and money for so long.

While the Northgate situation made getting Hill-Burton funds more complicated, ultimately Northwest Memorial prevailed. On May 28, 1958, the association applied for Hill-Burton funds and on June 25, Chairman Charles Horowitz announced that the Hill-Burton committee had awarded Northwest Memorial Hospital $465,000. Eventually, Northwest would use almost $1 million in Hill-Burton funds.

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