In 1923 the Sisters of St. Joseph of Peace opened the Little Flower Hospital in Ketchikan, named after Saint Teresa, who proclaimed herself "a little flower in God’s garden." The sisters already had a small presence in the Northwest, having opened St. Joseph Hospital in Bellingham, Washington, in 1891.

Little Flower wasn’t Ketchikan’s first hospital; Episcopalians had built a hospital here in 1904, followed in 1922 by one built by the Catholic Society of Alaska. But that same year, recognizing the need for more medical services on the remote Alaskan island, Bishop Joseph Crimont traveled to the sisters’ U.S. headquarters in New Jersey to ask for their help, which they agreed to give.

A small addition was made in 1927, followed by a long-needed pediatric wing in 1941. But by this time Ketchikan was booming, and the hospital was already inadequate and in need of repair. Work on a $100,000 expansion began in 1943; the result was a 75-bed hospital, the largest privately owned hospital in Alaska.

By 1960, however, Little Flower Hospital had outlived its usefulness, and the sisters who owned and operated it could not afford to replace it. Citizens rallied to form a hospital advisory council, and a new hospital site was chosen. The city council agreed to build the new hospital with funds from a 1% sales tax, and the sisters agreed to lease the property from the city and operate the hospital debt-free, providing all necessary charity care.

Ketchikan General Hospital opened its doors in 1963, and a long-term care wing opened in 1968. The Sisters of St. Joseph of Peace, through their hospital services arm now known as PeaceHealth, continue to operate the hospital with the same lease agreement approved by the city council in 1960.