Moratorium imposed by county commissioners to protect Clark Memorial Hospital

With little notice and almost no public comment, Clark County Commissioners on Thursday adopted an ordinance placing a two-year moratorium on almost all new medical facilities in the county.

Described as an effort to protect the financial stability of Clark Memorial Hospital while county-wide medical needs and resources were studied, the ordinance would ban any new hospital, outpatient surgical center or diagnostic imaging facility other than those constructed by Clark Memorial during the next two years.

The ordinance would limit hospitals in the county to Jeffersonville's 241-bed Clark Memorial and Charlestown's 96-bed Medical Center of Southern Indiana. The Charlestown facility is operated by Province Healthcare.

A representative of one group of physicians said they are considering challenging the ordinance as illegal on the grounds it violates federal antitrust laws and constitutes an illegal restraint of trade.

"I believe you are going down a slippery slope and will be alienating medical staff who serve in this community," said James Wesp, a health care consultant with 25 years' experience in hospital administration.

Wesp challenged the commissioners for not providing public notice of their proposed action and for not inviting public comment before their vote. He also questioned whether the commissioners had the authority to impose such a moratorium.

"The Indiana State Department of Health still has jurisdiction over all of these issues of licensure and it is not at all sure the commissioners have the authority to take this action," Wesp said. "Making two hospitals the only one's who can offer care, including outpatient ambulatory care, is an act in restraint of trade."

Notice of Thursday's agenda was provided just six hours before the meeting. Before adoption the ordinance the board invited only Clark Memorial attorney Ernest W. "Bill" Smith and CEO Dr. Cameron Gilbert to speak.

"We compete with a lot of both non-profit and for-profit hospitals in Louisville and a lot of for-profit hospitals are coming in to pick the profitable end of the business," Smith said. "This is not a certificate of need. This is a two-year moratorium to keep the status quo intact in the county while a task force studies health needs and makes an assessment in Clark County regarding hospitals."

Smith said the study would be finished in 18 months and that "the moratorium protects the financial integrity of the hospital and of the county's citizens who, in effect, own it."

Gilbert, referred to private, for-profit hospitals coming into the county while Clark Memorial Hospital provided $500,000 of free medical care to inmates at the county jail last year and $20 million worth of care to indigents.

"We want a level playing field and want to address the true health care needs of the county," Gilbert said.

Commission President Ed Meyer and Commissioner Vicky Kent Haire then commented on their appreciation for the service the hospital provided to the community and moved to pass the ordinance.

Since the ordinance is enforceable in Clark Circuit Court and carries a fine of $2,500 for any violation, it requires publication and two weeks notice to the public before taking effect.

While the ordinance states a task force would be appointed by the commissioners to study "the potential adverse effects" of excessive competition in hospitals and health care facilities and services, no appointments were announced at the meeting.

The task force is supposed to report back on factors to be considered when assessing the need for new facilities and recommend whether the county should adopt a certificate of need ordinance governing their construction.

During the next two years, the ordinance permits only Clark Memorial Hospital to construct specialty hospitals for cardiac, orthopedic or other specialties, ambulatory outpatient surgical centers or diagnostic imaging facilities in the county. The language could arguably restrict clinics for laser eye surgery and even oral surgery, though they are not specifically mentioned.

Clark Memorial has announced its purchase of property in Sellersburg and Charlestown, and is also said to be acquiring property in Clarksville, for the construction of new satellite medical service centers. It also recently opened a new cardiac diagnostic facility in partnership with Louisville's Jewish Hospital.

After the meeting, Wesp said the doctors for which he provides consulting services would soon meet to consider their options. He said a possible legal challenge to the moratorium ordinance, or the manner it which the commissioners acted to adopt it, would be part of their discussion.

Representatives of The Medical Center of Southern Indiana could not be reached for comment before press time.