WENATCHEE — Local medical officials say they think they are clear to go ahead with a joint-management proposal for Central Washington Hospital and the Wenatchee Valley Medical Center.

The Federal Trade Commission and the state Attorney General’s Office completed a joint review of the proposed affiliation and told local officials last week that they have completed that review and have no further questions.

“We are seeing this as the go-ahead to proceed with the affiliation,” said Dr. Stuart Freed, medical director at the medical center.

“We’re very happy,” said Jack Evans, hospital president and CEO. “This is probably the most major milestone of the process.”

Both men said that state and federal officials do not approve joint management agreements but just notify participants when they have completed a review. Dan Sytman, deputy communications director with the attorney general’s office said its antitrust division does not comment on joint management proposals.

Officials at both local medical facilities announced in September that they hope to form a not-for-profit foundation that would manage operations at both facilities.

Driving the proposal are the hospital’s financial losses. Changing medical practices have shortened hospital stays, for example, prompting layoffs there.

In late August, hospital officials announced that they planned to lay off 80 employees as part of a plan to cut $7 million from its $180 million annual budget by the end of the year. They ended up cutting 70 positions but, by reducing some non-salary costs, were able to cut the $7 million, said John Hamilton, the hospital’s chief operating officer.

That was the second round of layoffs last year. About 20 fulltime equivalent employees were laid off in early 2011.

Officials also said they hope the new partnership prevents a competitor from buying the hospital. A new owner could end the two institutions’ close relationship and give the medical center a competitor for specialty services.

Hospital and medical center officials say they worry that a buyout of the hospital by a large health care company could lower the quality of local care and diminish the economic benefits to the community that come from local control.

The leadership team for the affiliation will now move ahead with creating the 501C3 nonprofit foundation that will manage the joint-operating proposal, Freed said. It must gain the approval of shareholders of the medical center and the hospital’s board of directors. The foundation has not yet been named.

By mid-summer, Freed said, patients may begin seeing billing statements and other correspondence from the hospital and clinic with a letterhead that lists the new foundation. Freed said he expects medical departments to move around some over the course of a year after the agreement is finalized.

“I want patients to know that up front and center in the formation of this new union is: How can we do it better for the patients,” Freed said. “The reason to do this is to enhance the already high quality of care in the region and make sure it survives as a locally lead endeavor.”

Dee Riggs: 664-7147

deeriggs@wenatcheeworld.com