KPHD board, community show concern over planned SMMC clinic closure

Published 1:30 am Wednesday, April 8, 2026

The Kitsap Public Health District Board received a presentation by St. Michael Medical Center staff April 7 regarding the planned April 24 closure of the hospital’s pediatric rehabilitation clinic.

SMCC president Chad Melton reported $275 million in operating losses each year from 2022-2026 across eight hospitals in the VMFH network, which totals roughly $1 billion. Allie McLaughlin, interim vice president of operations at St. Michael, described the operating environment Virginia Mason Franciscan Health is in.

“Really, where we’re at is that vital safety net programs and services across the communities are now being impacted because we’ve done what we can up until this point, and we’re now at the hardest decision-making point, which leads us into facing difficult decisions,” she said.

SMMC previously announced the outsourcing of the hospital-based SANE (sexual assault nurse examiner) services and the transfer to RSI, an Oregon-based forensic nursing services organization that provides SANE services at all other VMFH locations. The outsourcing will result in the loss of one nurse coordinator and four on-call registered nurses. McLaughlin estimates the program serves roughly 100 patients annually.

“We had a really hard time keeping those four on-call registered nurses in seats, because people transition a lot in nursing right now, and unfortunately, that led to some what could have been gaps in care, or it led to one or two nurses shouldering all of that burden. And it just isn’t sustainable to keep on one or two people to cover 24/7, 365 days a year,” she said.

Kitsap resident and parent, Billy Pacl, shared his concerns about the clinic’s planned closure.

“This doesn’t look like a simple case where St. Michael had no choice. It looks like a much bigger system is trying to deal with broader financial strain, and one of the places that burden is landing here on a clinic that serves some of the most vulnerable children in our community. That is especially hard to accept because CommonSpirit’s [which owns both Virginia Mason and SMMC] own mission says it exists to improve the health of the people it serves, especially those who are vulnerable, while advancing social justice for all…The public deserves more than a general claim of financial pressure. We deserve to see the actual clinic numbers, the options that were considered, and a real explanation for why this service for vulnerable children was the one that had to go. Until that is known, this community has every reason to question whether this was really something St. Michael had no choice about, or whether it was a bigger system making our local kids pay the price,” he said.

Another parent, Katie Osantowski, shared the importance of the clinic to the community.

“I first sought care for Stella in July of 2025 and was able to start care at St Michael’s pediatric rehab in October. How quickly Stella was able to be seen was only due to the constant communication with the clinic and my flexible scheduling. The average child stays on a wait list for much longer. This means it took Stella three months to receive much-needed help, and this is the best-case scenario. St. Michael’s administration team has given us six weeks and a list of 20 clinics in the area. This feels like our children are being treated like an administrative and financial burden. Today, St. Michael will tell you that they are supporting families like mine during this transition. You decide if this reflects the medical center’s statement of putting patients and families first. To me, this is not an adequate time for my daughter to receive continued care. Pausing care for any child in therapy can cause regression and loss of gained skills because of the therapy process. These children will be placed at the bottom of a waitlist and at a new clinic, and have to wait months or longer,” she said.

McLaughlin shared her perspective regarding the planned closure.

“It’s hard to have known people and know that we’re affecting them in a way that we don’t want to, but the reality is, this is where we are in health care,” she said.

KPHD boardmember Dr. Amity Marriott asked about contingency planning SMMC has explored in an effort to minimize the impacts on Kitsap residents.

“I feel like we’ve gotten two very different stories today, one that highlights very little outreach and assistance with transition, and then one that indicates that there is a transition plan. So I’m not entirely sure what’s going on in reality. I imagine it’s a little bit of a combination of both,” she said.

McLaughlin said SMMC has been having conversations with community partners, including Seattle Children’s and Tacoma-based MultiCare Health Systems, about the possibility of bringing pediatric services to Kitsap County. McLaughlin didn’t provide a timeline on when services could be available, and described the conversations as ongoing.

Boardmember Drayton Jackson asked about other factors contributing to the financial pressures.

“I’ve sat on this health board for the last four years, and that’s something that I’ve heard for years. I sat on the Urban Institute, which has not changed. That was always to be the picture until the federal government changes that. My specific question is, what is it that you guys are lacking financially that is hurting you to get you to this deficit, where you have to make these closures?” he said.

McLaughlin described the environment as being impacted by compounding factors, including Medicaid reimbursement deficits and rising operating costs.

“It’s the compounding factor of all of the things that are now coming at us in terms of taxes and different things, but also the loss of some of those benefits, like SNAP, that we did have to try to offset some of those lack of Medicaid reimbursement. We’re heading backwards from where we were trying to adjust or try to affect those Medicaid reimbursement deficits,” she said. “We will definitely work and want to continue to partner with all of you guys and come with specific asks and sit at the table and have a conversation. Today’s presentation was really kind of an overarching look at where we’re standing today.”

Kitsap County Commissioner and KPHD boardmember Christine Rolfes asked about how much money the clinic is specifically losing.

“The decision wasn’t based upon a specific number. It was really based on sustaining for the long-term for the community, and we have tried very hard not to impact any patient care with our financial efficiencies, and trying to get a little leaner. We are at the place now where the safety net programs are being impacted,” McLaughlin said.

McLaughlin didn’t provide a specific cost estimate; however, she said SMMC would be open to discussing safety net programs and how they are funded in follow-up meetings scheduled with families in the coming weeks.