Methodist's Plan B Foiled

LYNNE JETER

Building a Solid Base in DeSoto County Taking Longer Than Expected

OLIVE BRANCH – Over the last few years, Methodist Le Bonheur Healthcare, Inc., has taken the good neighbor approach by increasing its presence in DeSoto County.
 
Methodist opened a minor medical clinic, a sleep center and a pediatric urgent care center, and acquired Carvel Imaging centers in Southaven and Olive Branch from the Carvel family.
 
A groundswell of local support for Methodist's proposed 100-bed acute care hospital, which has been repeatedly denied a certificate of need (CON) from the Mississippi State Department of Health and legislation that would bypass the CON process, has grown stronger as the roadways between Southaven and Olive Branch have become even more congested.
 
"The way this county has grown, there are enough people to fill both hospitals," said one DeSoto County resident. "Have you ever been to the emergency room at Baptist-DeSoto? People sit for hours before they're seen."
 
Another weighed in: "It takes people in Olive Branch 30 minutes to get to Baptist-Desoto with the traffic we have."
 

Mid-Year Challenges

For the 2009 legislative session, Methodist lobbied State Sen. Merle Flowers (R-Southaven) and Rep. Tommy Woods (R-Byhalia) to introduce legislation allowing the hospital to be built.
 
"We can cut through a lot of the red tape by legislatively issuing a CON," explained Flowers. "If approved through regular channels, other hospitals have the opportunity to object and it could get held up in the lengthy appellate process."
 
Baptist-DeSoto administrators have firmly maintained their stance: "We don't believe the issue of healthcare and certificate of need should be covered through the political legislative process, where the outcome can become a popularity contest," said Greg Duckett, senior vice president and legal counsel for Baptist Healthcare.
 
Also opposing Methodist's proposal is Kenneth Williams, MD, an internist who owns Alliance HealthCare System, Inc., and has an approved CON to build a $31 million, 40- or 48-bed hospital in Holly Springs.
 
"Part of our business plan is to attract new payors," Williams said. "If we get in the position where we can't attract them, then that changes the whole thing."
 
Methodist CEO Gary Shorb has indicated a willingness to work with Williams, who admittedly doesn't have "the deep pockets like Methodist or Baptist."
 
But even a special session called in early May to deal with legislatively bypassing the CON process failed after the House "didn't blink" and abruptly ended the special session without considering the bill, said State Rep. Forrest Hamilton (R-Olive Branch), who blamed the bill's defeat on opponents ranging from Holly Springs medical leaders to the legislative black caucus.
 

Oops!

Political pundits said Methodist made a mistake when its leaders failed to give a heads-up to the two key state lawmakers – Rep. Steve Holland (D-Plantersville) and Sen. Hob Bryan (D-Amory) – who could decide the fate of the proposal.
 
"Methodist didn't call me and ask me what to do about that," admitted Holland, who chairs the House Public Health and Human Services Committee.
 
During the 2008 session, Bryan, Holland's counterpart in the Senate, quashed bills dealing with hospital CONs. "I have a lot of interest in my committee on this subject, not just from Olive Branch, but from all over the state," he explained.
 

Adding Meat

In January, as state lawmakers were huddling over conference tables discussing which bills to introduce and move forward, Methodist released a University of Memphis study that estimated the construction of a new hospital in Olive Branch to have a $1.3 billion impact on the local economy. Based on the RIMS II Regional Economic Model developed by the Bureau of Economic Analysis at the U.S. Department of Commerce, that figure includes direct expenses and direct and indirect dollars being re-spent within the community within the first three years of the facility's operation. The proposed hospital's capital outlay of $151 million, the study showed, would contribute $349 million to the local economy.

 
"We're at the beginning of a terrible recession," Flowers pointed out then. "We should treat the hospital as a major economic project … that would create 800 construction jobs and employ 535 people with an average salary of about $42,000."
 
Even proponents of the plan at the state capitol have battled among themselves for credit if the Olive Branch CON is approved. Holland introduced an amendment that would require the new hospital's address to be 1 Forrest Hamilton Ave., in honor of the time that Hamilton, who helped usher legislation through the House, has spent on the project. One observer called the move "a slam to Merle Flowers. Steve Holland should in no way dictate what the street name should be in Olive Branch. He needs to stick to business in Plantersville."
 
To show added seriousness to their plan, Methodist hired a CEO for the proposed hospital in April. Germantown Hospital CEO David Baytos was assigned to lead the Mississippi movement while also doubling as Methodist's liaison for its international management consulting agreements, which include contracts in China, Russia and Bangladesh.
 
The move occurred on the heels of layoffs and unfilled positions for the Methodist system. Just before Thanksgiving, 99 employees were laid off, and hundreds of positions remained unfilled. Given the economic conditions impacting the healthcare sector, some industry watchers said it wasn't too unusual. The cuts affected only 1 percent of Methodist's 10,000 employees at its five Memphis area hospitals, Fayette County facility, and smaller facilities. Methodist continued its expansion plans at the Germantown and Children's Medical Center facilities. "We remain committed to very good staffing ratios in all of our patient care areas," said Shorb.
 

Plan C

Another way Methodist could get the green light to move forward with their proposed Olive Branch hospital is if state officials approve changes to the CON process and criteria for new hospitals.
 
"The CON task force met several times in the latter half of 2008 and once in January 2009," reported Don Eicher III, director of the Office of Policy and Planning. "At the State Board of Health meeting on January 14, 2009, a report was presented by the CON task force of the matters discussed by and recommendations of the CON task force to the board for changes to the State Health Plan (SHP) to be incorporated in the 2010 SHP. The board accepted the report and voted unanimously to adopt the recommendations."
 
Even though Eicher anticipated the presentation of all criteria and standards changes to the Board with the intent to adopt at its regular April meeting, and submit the entire 2010 SHP for final adoption at the board's July meeting, no action was taken at the April meeting.