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Big money at stake

As St. Dominic’s fight for Madison continues, it raises the question of whether hospitals should be allowed to follow urban sprawl

A recent decision by a state Health Department officer recommending that St. Dominic Hospital in Jackson not be allowed to move some of its acute care beds closer to its Madison patients brings up interesting questions about whether Mississippi’s hospitals ought to be allowed to follow urban sprawl.

St. Dominic Hospital has proposed building a $121 million Madison hospital campus, transfering 71 of its Jackson beds. St. Dominic’s would then expand other services at its landlocked Jackson campus.

St. Dominic Hospital has proposed building a $121 million Madison hospital campus, transfering 71 of its Jackson beds. St. Dominic’s would then expand other services at its landlocked Jackson campus.

Should hospitals be allowed to relocate beds closer to their patient populations? If St. Dominic is allowed to move beds, will other hospitals follow? Would that be such a bad thing? And, hospital budgets aside, is state certificate of need (CON) law really conducive to protecting and providing the best health care for citizens?

Regardless of consumer desires or opinions, one thing is certain: Mississippi’s CON policy is not going anywhere, and neither is the state’s Health Plan. But interpretations of the two will continue to be hotly debated, with the Health Department and the court system having the final say. Millions of dollars and the health of citizens are at stake.

St. Dominic vs. HMA

St. Dominic-Jackson Memorial Hospital submitted a CON application to the Health Department in Dec. 2008, requesting that it be allowed to build a new facility where it could relocate 71 of its existing, licensed beds inside Madison city limits.

Health Management Associates (HMA), owners of the Madison County Medical Center located in Canton, oppose the plans. The 67-bed hospital is opening a brand new replacement facility called Madison River Oaks next year.

HMA is afraid that if St. Dominic moves in, it will steal private-pay patients, threatening its viability by leaving it with more patients insured by Medicaid, which pays less for services. The hospital’s website refers to St. Dominic as “the threat.”

CON laws are constructed to combat such scenarios and prevent hospital over-building. Mississippi is one of 30 states nationwide that governs its healthcare industry via CON instead of leaving it up to the free market.

The February hearings for St. Dominic’s proposed move were accompanied by extensive marketing campaigns and petition-gathering from both sides, as statements of “community reaction” are considered in such hearings.

This month, hearing officer Cassandra Walter issued a non-binding recommendation siding with HMA. In her opinion, Walter quotes testimony from Madison County Supervisor Karl Banks, who said he believed the St. Dominic advertising was “misleading” and that “St. Dominic is trying to build a hospital in the southern part of the county around the rich white folks. That’s what my constituents think.”

Walter’s recommendation has to be reviewed by state Health Officer Dr. Mary Currier, who has the final say. Unless, of course, she doesn’t rule in St. Dominic’s favor, which will result in a chancery court appeal and possibly a further appeal to the state Supreme Court.

St. Dominic says it won’t back down. “At this point, St. Dominic is going to stand with the people of Madison County as long and as far as it takes,” said Paul Arrington, St. Dominic vice president of business development.

Walter states in her opinion that St. Dominic’s plan to “relocate” beds is simply a new hospital in disguise. And a new hospital in Madison County is not supported by the state Health Plan.

The Health Department uses a complex formula to determine whether additional hospital beds are needed within a county when that county already has an existing hospital. That formula takes GHSAs  — or General Hospital Services Areas, into which the state is divided — into consideration. Both Hinds County, where St. Dominic is located, and Madison County fall within GHSA III.

St. Dominic argues that hospital beds should be allowed to be located near their patients.

“There is an indisputable maldistribution of beds for where people are in this service area,” Arrington said. “Hinds County is over-bedded, and the population is growing in Madison County. It makes health planning sense to allow us to relocate beds from one county to another.”

According to 2008 Health Department data, more than 85 percent of Madison County residents leave the county for hospital care, and nearly 30 percent of those travel to St. Dominic for care.

Case Precedent Ignored?

St. Dominic based its current CON application on a previous opinion written by Walter in Jan. 2008 that was upheld by the state Supreme Court and which approved a relocation of beds by Forrest General Hospital in Hattiesburg.

The distribution formula was not applied in that case, said Ed Brunini, the hospital’s attorney. Furthermore, St. Dominic takes issue with the fact that Walter did not even mention the Forrest General case in her opinion.

According to common law legal principles, judges are obliged to respect the precedent established by prior decisions. Brunini said the state Health Department says it is not bound by this principle. However, a state Supreme Court ruling says that the Department must conform to its prior norms and decisions or explain its reason for departure, and Walter did not do that in this case, Brunini said.

St. Dominic’s also argues about a trend nationwide to move hospital services closer toward populations they serve.

“The whole thing is just preposterous,” Brunini said. “To come to the conclusion they have come to, they had to be looking at (the case) negatively to start with. … People have got to be wondering, ‘What the heck is this CON foolishness?’”

The HMA View

HMA attorney Thomas Kirkland said HMA wasn’t surprised by Walter’s decision in their favor and calls St. Dominic’s case “smoke and mirrors.”

St. Dominic argues that the new facility would comply with the Plan based on the projected population growth in Madison County, while Kirkland and HMA say that according to the state Health Plan, Madison County “won’t need another 100-bed hospital for 20 years.”

The Forrest General case is a “totally different case,” Kirkland said, as Forrest General just moved its orthopedic beds to a new location, whereas in this case, St. Dominic would not be shutting down services anywhere else, but duplicating its services.

St. Dominic says that according to the case, Forrest General was actually allowed to split services, moving 30 of its orthopedic beds off its campus, and retaining some beds on campus for its emergency services department.

Kirkland also says this is the third time St. Dominic has presented this same CON before the Health Department, and this is the third time it has been rejected.

HMA touts its commitment to Madison County and the fact that it came to the rescue of the county-run Madison General hospital in 2002, taking over the facility and assuming its $9 million in debt. The project was first offered to St. Dominic, who turned it down.

St. Dominic then later filed a CON to move services into Madison County on HMA turf.

But St. Dominic argues that it only filed a CON to build in Madison because HMA was trying to “abandon” the county by moving Madison General beds to Jackson. HMA took over the hospital with the agreement it could move the beds, a proposal that was later denied by the Health Department.

St. Dominic filed another CON for services in Madison in 2007 that it withdrew due to “technical difficulties” after the Forrest General opinion came out and then constructed a new case based on that precedent.

State Health Officer Dr. Mary Currier will hold a public meeting regarding the case Aug. 26.

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