By CHRIS MORRIS, Evening News
newsroom@newsandtribune.com
As the legal challenges fade away, three new privately-owned hospitals expect to break ground within the next year in Southern Indiana.
It was a bloody battle though, that ensued before these plannned facilities could begin to offer healthcare options to local patients.
Each county-owned, Floyd Memorial Hospital and Health Services and Clark Memorial Hospital, successfully held off any new competition with a moratorium that was established by the hospital owners -our county governments. The challenge was later ruled unconsitutional by a federal judge, since it was seen as a conflict of interests for a government to eliminate any competition for services the county owns and therefor provides.
Now the path has been cleared for the private owners. But what's the difference between a privately owned hospital and our publicly owned county hospitals?
After exhaustive interviews for several months with representatives from the hospitals and impartial industry experts, it doesn't appear that there are many fundamental distinctions.
However, both public and private owners say they believe their way is the right way for the citizens and employees.
The two public hospitals are two of the largest employers in Southern Indiana and they provide a number of free services to their respective communities.
"The (Floyd Memorial) hospital is not just a hospital, it helps so many other organizations," said Chuck Freiberger, president of the Floyd County Commissioners, the government agency that oversees the hospital. "Because it has the capability to do so."
It starts with indigent care, hospital officials say.
Elaine Hayes, director of finance for Floyd Memorial, said the hospital provided $11.5 million last year in uncompensated care. That number comes from providing care to uninsured patients and after the hospital is reimbursed by government programs. Clark Memorial's indigent and uncompensated care total exceeds $20 million.
"I don't think people are aware of it at all," said Martin Padgett, CEO of Clark Memorial. "They have no idea the number of people who come in here without insurance."
Both hospitals work with patients who do not have insurance to try and work out a payment plan. When eligible, they also try to sign patients up for Medicaid or other government programs.
However, doctors associated with the Kentuckiana Medical Center - which plans to build a 64-bed facility in Clarksville - said they too will provide indigent care. They said in order to receive federal reimbursement - Medicare and Medicaid - they have to treat anyone who walks through their door.
In a recent survey conducted by the Texas Department of State Health Services, community hospital emergency rooms see an average of 40 patients compared to less than one for privately-owned facilities per day, which often don't offer extensive emergency services.
Dr Chris Stavens with Kentuckiana Medical Center said they would serve all patients, though, without an emergency room.
We have an obligation to take care of patients," Stavens said. "If an uninsured patient suffers a heart attack and comes to us, we will take care of them. That is our oath."
Kentuckiana Medical Center - which will be owned by physicians - will break ground along Veterans Parkway in four to six weeks, according to Dr. Eli Hallal, one of the investors. A pre-bid conference was held Tuesday and Hallal said there was "great interest" among contractors. The bid deadline is Aug. 29.
Hallal said the hospital will be open 24 hours a day, seven days a week and will provide an emergency room and take indigent care patients.
"We will have a level one or two emergency room where we will be able to stabilize a patient," Hallal said. "We don't want to have a 30-bed emergency room. We want people to see their physician. Big emergency rooms are the most costly way to deliver health care because they are so convenient and people use them for simple ailments."
Investors with the private hospital had land options in both Floyd and Clark counties but decided to build in Clark after battling with Floyd County officials for more than a year. Both counties adopted moratoriums preventing the construction of private hospitals. Those moratoriums were allowed to run out in March after federal judge Sarah Evans Barker, of the Southern District of Indiana, ruled in January that both moratoriums are "invalid exercises of Clark and Floyd counties' powers under Indiana Home Rule Act" and ruled in Kentuckiana Medical Center's favor. Neither county appealed the ruling.
While most of the battle centered around Kentuckiana Medical Center, other private facilities have been popping up in the area. An outpatient center is expected to build along Hausfeldt Lane in New Albany. The for-profit center, that will be managed by Prexus Health Centers in Cincinnati, is also expected to break ground this year.
Sunnyside Land Company also plans to build a 40-bed hospital - which will sit on about 33 acres of Ind. 62, west of I-265 - in Jeffersonville. Owners hope to break ground before the end of the year.
The outbreak of private facilities will put a financial crunch on county-owned facilities, hospital officials say. Floyd Memorial recently opened a $65 million addition which includes a heart center and new emergency room.
A task force, put together by Floyd County Commissioners to study the private vs. public hospital issue, reported last spring that Floyd Memorial Hospital could lose $5 to $12 million a year if a private hospital would open in Floyd County. Since the hospital is county owned, if it would face financial difficulties, the burden could come back on taxpayers.
Much of the argument centers around providing care for the uninsured.
Clark Memorial sponsors the Clark County Clinic, a special clinic designed for patients who are uninsured. Doctors donate their time and the hospital provides the services. The in-house facility has been open for more than 15 years.
"It's definitely getting worse," Padgett said of uninsured patients. "But we still have to show a profit even though we are county owned. And we haven't taken a dime from the county. Sometimes people don't believe that."
Hayes also said Floyd Memorial has not taken any money from the county. She said that makes budget time "interesting."
"We have to manage our budget to control that," she said of indigent-care expenses.
Floyd Memorial also spent $496,605 for community education programs which include Healthier Community Initiative activities, patient education materials and staff hours utilized for patient and community education. It also shelled out $29,000 in screenings and other community outreach programs outlined by the Department of Health.
It provides some programs free of charge and some with minimal fees and some with normal fees," Freiberger said. "It has also created hundreds of jobs for people in the county. The hospital is owned by the county, so the value of the hospital is there for the county in case it is ever sold. (But) I do not want to sell it."
Hallal said Kentuckiana Medical Center, LLC will also provide screenings and preventative programs. He said it's a bit of a stretch to say Floyd Memorial provides free screenings.
"Those screenings would not be possible without the doctors. We are the ones doing the screenings," Hallal, a New Albany physician, said. "We do it for free."
Clark Memorial did not give specific dollar amounts. However, Mary Jennings, director of marketing and public relations, said the hospital spent more than $1 million on community programs and screenings last year.
For example, Clark Memorial hosts a men's health fair each year. More than 2,000 men participate in the event which offers free health screenings. The cost of the fair exceeds $5,000. She said that is just a sample of what the hospital offers.
Dr. Kevin Burke, president of the Indiana State Medical Association, said competition in the medical field is a good thing. He also said there are advantages to private hospitals.
"They are also able to provide quality care at a lower cost, because private hospitals are usually controlled by physicians," Burke said. "Most hospitals are operated by CEOs. They tend to bring a business perspective, while physicians by nature know what is best for their patients."
Burke said private hospitals also don't get the tax breaks that county-owned facilities receive. He said they are also obligated to do a certain amount of charity cases.
"Hospitals receive grants to help subsidize charity cases," Burke said.
Kentuckiana Medical Center will have 13 specialties excluding OBGYN and pediatrics when it is finished. Its projected revenue, according to the task force report, will be between $22 and $26 million annually, which could generate between $400,000 to $1.5 million in tax revenue.
"We want a facility that doctors can control. Physicians will decide the best method of care," Stavens said. "We want to cut out the middle men [administrators] so we can deliver better care that is less expensive."
Doctors across the country are becoming increasingly frustrated with bureaucracy costs associated with running a practice and paying malpractice insurance.
Burke said it is imperative for the bad blood between physicians and hospitals be resolved for the benefit of the community.
"Physicians are captains of the healthcare ship," he said. "When physicians and those who run hospitals clash, that is a bad thing. Hospitals need to do a better job reaching out to physicians and improving the relationship. They need to overcome the personality conflicts. And I don't feel like either hospital allows physicians enough input. They just give them lip service which leaves the medical staff disenchanted."
However, not all are disenchanted.
Floyd Memorial has working partnerships with physicians associated with the Cancer Center of Indiana and Priority Radiology. The Floyd Memorial Urgent Care Centers are operated by the hospital and provide care to all patients regardless of their ability to pay, according to Julie Garrison, director of marketing and public relations with Floyd Memorial. The Family Health Center of Floyd County is another example of how the hospital and physicians work together to provide care to those who couldn't otherwise afford it, she said.