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Wednesday, 18 April 2012 19:54

Lawmakers hesitant to meddle in turf war between Mission, smaller hospitals

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A movement to rein in the dominance of Mission Hospital in Western North Carolina’s healthcare landscape has hit a critical juncture.

A legislative committee studying whether smaller hospitals are suffering from aggressive, monopoly-like tactics by Mission will unveil its recommendations this week. Based on a preliminary report, the committee will recommend new restrictions to help level the playing field for Mission’s competitors.

But, there is early indication the recommendations won’t garner the necessary support in the General Assembly.

To pass, it would need the support of heavy-hitter Sen. Tom Apodaca, R-Hendersonville, who chairs the Senate rules committee. Apodaca has told fellow legislators he won’t support it.

“The senator assured me it would be dead on arrival in the Senate,” said Rep. Ray Rapp, D-Mars Hill.

Without Apodaca’s backing, new restrictions on Mission have “zero” chance of passing, according to Sen. Jim Davis, R-Franklin, even though Davis himself personally supports them.

Another nail in the coffin: Sen. Martin Nesbitt, D-Asheville, doesn’t support new restrictions either. Between Apodaca and Nesbitt — the two senators who represent territory at the heart of the Mission Hospital debate — it’s unlikely senators from other parts of the state would feel strongly enough to go over their heads and push it through anyway.

Smaller hospitals and doctors in the region are fearful that Mission is exploiting monopoly-like power to gobble up market share, causing the slow-but-steady decline of smaller community hospitals by eroding their patient base.

But while Mission’s competitors lobbied for more restrictions, Mission was lobbying for fewer restrictions. It currently is subject to anti-trust oversight dating back to the merger of Asheville’s only two hospitals in the 1990s.

Mission claims those existing regulations handcuff its ability to navigate the rapidly changing dynamics of healthcare and should be lifted.

“It has been 16 years. There has to be a way of gracefully ending this,” said Ron Paulus, CEO of Mission.

The upshot, however: neither may get what they want. If lawmakers buck committee recommendations and decide to leave well enough alone, the status quo will stay in place.

“If it ain’t broke, don’t fix it,” Rapp said.

Rapp said the state shouldn’t do something that could hurt Mission’s role as a life-saving hospital in the region.

“The health and well-being of our citizens should be first and foremost,” Rapp said. “ We can’t put our premier health care institution in jeopardy.”

But, Davis said Mission’s unfair advantage is jeopardizing smaller hospitals.

“I just don’t want any hospital to be preyed upon by a large hospital,” Davis said.

Davis said the anti-trust oversight Mission is subject to was put in place for a reason.

“Whenever you endorse a monopoly, whatever government body blesses that, has an obligation to keep an eye on them,” Davis said.

Paulus said Mission has a critical responsibility in the region as the largest and only tertiary care institution. “I hope you don’t need us but I want to be here if you do,” Paulus said.

It’s doubly hard given the demographics: poorer, sicker, older and less insured.

“The issue is how do we care for the patients in our region when the demographics are so much worse,” Paulus said.

Mission wants to work collaboratively with all the hospitals and doctors in the region toward that goal rather than get bogged down in turf battles no one can afford to wage, Paulus said.

The state committee considering whether to strengthen or weakened the anti-trust regulations governing Mission released preliminary recommendations last month.

Among them: a buffer zone that would stop Mission from setting up certain types of clinics within 10 miles of an existing hospital and a cap on the percentage of doctors Mission can employ in a community.

In Haywood County, MedWest-Haywood hospital has been in a race with Mission to buyout private doctors’ practices and put physicians on the hospital’s payroll as in-house employees.

The trend of doctors working directly under a hospital instead of private practice is a national one, driven largely by economics. Doctors have been getting squeezed by declining insurance and Medicare reimbursements and see employment under a hospital as an easier route.

The fear, however, is that whichever hospital employs doctors can control where they send their patients.

“If Mission buys a practice, the default for that practice would be to send those patients to Mission Hospital, and I am concerned about how all these little hospitals in the western part of the state will survive if that happens,” Davis said. “I don’t think anyone wants our community hospitals to become emergency clinics that feed to Mission Hospital.”

Paulus countered that Mission would not dictate which hospital a doctor should admit and refer patients to.

Nonetheless, Mission’s competitors would like to see limits on how many doctors it can employ in surrounding counties. Currently, Mission’s anti-trust regulations cap the number of doctors it can directly employ in Buncombe County to 30 percent, but there are no caps for other counties.

 

Fishing for physicians

Mission has come under fire for courting physicians in Haywood County. Mission has also set up a competing medical office complex in Haywood.

But, Paulus said Mission’s motives in extending employment offers to Haywood doctors are not sinister.

“The goal is not to have a single monolithic hospital in the middle of Asheville,” Paulus said, adding “it would never work, parking is terrible.”

Paulus said WNC has historically not been able to recruit enough doctors to serve the population.

“The ratio of doctors to population is well below the state and national average,” Paulus said.

Their salaries here are lower because of the higher number of  poor, uninsured patients. By employing doctors, hospitals essentially subsidize their practices to get them to stay here.

Mission simply wants to ensure a stable of doctors for the region, he said.

“Our core concern is the ablity to attract and retain quality physicians in the community,” Paulus said.

Haywood doctors who are critical of Mission for its forrays in their home territory questioned why, if Mission’s goal was building the physician base, did it try to buy exisiting practices that are already here.

Paulus said the existing practices are the best route for recruiting more doctors.

“It is much easier to recruit into an existing group than create a new group,” Paulus said.

MedWest-Haywood got particularly irked, however, when Mission tried to court Mountain Medical Associates, a key practice in Haywood County with eight doctors across four critical specialties.

Realizing it had stepped on an ant hill, Mission actually withdrew its offer to Mountain Medical Associates, Paulus said. Before doing so, it extended an olive branch inviting MedWest-Haywood to form a three-way partnership with the practice and the two hospitals working together. That way MedWest-Haywood wouldn’t have to shoulder the entire financial burden of adding all the doctors to its payroll, Paulus said.

Paulus said the offer attempted to “reset the playing field and get past old emotions” between Haywood and Mission, but the opportunity was squandered.

Whether perception or reality, MedWest-Haywood had to counter Mission’s offers to buy local physician practices, despite not really having the money to do so.

“They in a sense have been forced into a bidding war with Mission for their own doctors and have had to pay more for those physicians as a result,” Fields said.

That was partly to blame for landing the MedWest-Haywood in a financial quagmire. It barely had enough cash on hand to make payroll and had to get an emergency line of credit to bail it out of a cash flow crunch.

But, those who defend the move say it was critical.

“If you don’t have physicians in your community pushing people toward your hospital, you aren’t going to have a hospital in your community,” said Kirk Kirkpatrick, a Waynesville attorney and Haywood County commissioner who has been active in hospital affairs.

Kirkpatrick said billboards for Mission in Haywood County are a testament that Mission is actively going after patients in Haywood County and trying to pull them away from MedWest-Haywood hospital.

“It is an extremely competitive business, extremely competitive,” Kirkpatrick said. “If you want a hospital in your community that can provide the kind of care you expect then you need to utilize your hospital. If you go over to Mission and you vacate your hospital and don’t utilize it, it won’t be here anymore.”

For more information on both sides of the issue, go to www.wncchoice.com and www.missionfactchecker.com.

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