Expansion blocked by appeal from three Coast hospitals

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Published: September 13,2004

Ocean Springs — Many people don’t realize it, but greater Ocean Springs, including the St. Martin areas north of town, and Gulf Park Estates/St. Andrews southeast of town, has a larger population than Pascagoula — the county seat. Two of the five Jackson County supervisors are from Ocean Springs, another indication of the large population on the county’s western boundary with Biloxi.

Greater Ocean Springs has seen a big housing boom in recent years, and so many medical offices have been constructed on Highway 90 in east Ocean Springs that the area has come to be known as “the Medical Mile.”

However, when it comes to hospital beds, Singing River Hospital in Pascagoula has 400 beds compared to 136 beds at Ocean Springs Hospital. Both hospitals are county owned, and part of the Singing River Hospital System (SRHS).
According to the SRHS, the Ocean Springs Hospital is averaging daily occupancy of 130, while larger Singing River Hospital averages between 150- to 200-bed daily occupancy. The Certificate of Need (CON) approved by the Mississippi State Department of Health (MSDH) approved the transfer of 60 licensed beds from the campus of Singing River Hospital in Pascagoula to the Ocean Springs Hospital.

But that decision has been appealed in Hinds County Chancery Court by three Coast for-profit hospitals, Biloxi Regional Medical Center, Garden Park Medical Center and Gulf Coast Medical Center.

William Peaks, CEO at Garden Park Medical Center and spokesperson for the three hospitals, said that the hospitals disagree with the decision of the MSDH and are pursuing their legal rights to appeal the decision.

“The Certificate of Need process has certain requirements for expanding hospital beds,” Peaks said. “Along with other hospitals on the Coast that could possibly be affected by a hospital expansion, we want to be assured that those requirements have been met as this decision could potentially affect many hospitals in the state.”

The intent of the CON process is to make sure that there are not more hospital beds or other types of healthcare facilities constructed than are needed by the local population. Overbuilding could lead to financial difficulties for all healthcare providers by making each center less profitable.

The position of the SRHS is that rapid residential growth in the Ocean Springs area necessitates the hospital expansion.

“Western Jackson County is growing by leaps and bounds,” said Richard Lucas, director of public relations and communications for the Singing River Hospital System. “The growth is there, and is very pronounced.”

The appeal contends that MSDH’s approval of the hospital’s CON application was based upon errors. The appeal delays probably until 2006 the construction of a planned east tower of the Ocean Springs Hospital that officials had hoped to begin by the end of the summer.

Chris Anderson, CEO of SRHS, said they were very disappointed by the appeal by the three hospitals.

“Our proposed expansion is clearly needed for the citizens of our community, as indicated by the State Department of Health’s approval,” Anderson said. “We hope this matter will be resolved as soon as possible so that we may move forward with this project, which will positively impact the healthcare of many local residents.”

In addition to the plans for construction of 60 acute patient care beds in a new east tower, Ocean Springs Hospital’s plans include expansions to current departments and support staff areas. Renovations are also planned for the OSH cafeteria and existing diagnostic areas.

The Chancery Court has 120 days from the issuance of the CON to rule on the appeal by law, which would make the ruling at this court no later than November 26. Anderson said if the ruling of the Chancery Court is then appealed to the Supreme Court, that process could take anywhere from six to nine months depending on the Supreme Court’s scheduling.

“Therefore, the final ruling from the Supreme Court would likely be in the May to September 2005 timeframe,” Anderson said.

With interest rates rising, delay of the expansion could have a negative impact on the cost to complete the project. However, Anderson said they are not as concerned about interest rates as they are about the potential impact on the healthcare availability and accessibility for the citizens of the community.

“A lack of available beds could result in patients experiencing delays in getting a room, delays in surgical procedures or, in some cases, being diverted to another hospital,” Anderson said. “We would rather be in a situation where we could take advantage of low interest rates during a construction project; however, our main concern now is more patient beds for our community’s hospital needs.”

Anderson said as a not-for-profit hospital, SRHS is the “safety net” for the community.

“We provide care to everyone in our community, regardless of their ability to pay,” Anderson said. “We provided approximately $12 million in charity care last year and provide services such as inpatient psychiatry that our community needs but cannot support financially. We receive no funding from the county to assist with the provision of uncompensated care. It is important to realize that we receive no financial support from the county but still must balance our budget each year, which includes setting aside funds to purchase equipment and provide raises to our nurses and other employees.”

Anderson added that the most important distinction of being a not-for-profit is that the funds that are generated are returned to the community in the form of additional investments in employees, technology and facilities.

“For-profit hospitals, generally owned by out-of-state corporations, must return profits (or some percentage thereof) to shareholders,” he said. “ This means that all of the revenue generated by a for-profit hospital is not used to provide additional services as a result of investor demands for a return on investment. While we do not pay income taxes as for-profit hospitals do, we do provide many valuable services to our community.”

The hospitals involved in the appeal are all owned by out-of-state corporations. Biloxi Regional Medical Center is owned by Health Management Associates Inc. based in Naples, Fla. Gulf Coast Community Medical Center is owned by Tenet Healthcare Corporation based in Santa Barbara, Calif. And Garden Park Hospital is owned by Hospital Corporation of America based in Nashville, Tenn.

Contact MBJ contributing writer Becky Gillette at bgillette@bellsouth.net.

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