Other Hospital Systems May Submit Applications for New Hospital
For years, Methodist Le Bonheur Healthcare and Baptist Memorial Health Care Corporation, both based in Memphis, have been embroiled in a battle for a certificate of need (CON).
Methodist has sought to build a 100-bed hospital in Olive Branch; Baptist, with Baptist Memorial Healthcare DeSoto in Southaven as the sole hospital in DeSoto County, has opposed it.
Confident after the State Board of Health adopted changes to Mississippi's health plan in July allowing counties with a certain, significant population increase to qualify for a CON, Methodist acquired a 40-acre site on the southeast corner of Highway 78 and Bethel Road for $5 million.
But is it a shoo-in that Methodist's CON application will be approved? The provision change also paves the way for other hospital systems to apply for a CON in DeSoto County, including Baptist.
"No one is excluded," said Luke Lampton, MD, a family physician from Magnolia who chairs the Board of Health. "Baptist could apply, St. Dominic's could apply, North Mississippi Medical Center could apply, the hospital at Holly Springs could apply. The more applications, the better."
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, has opposed Methodist's plan to build in DeSoto County, first during the traditional application process and later when Methodist backers introduced legislation that failed earlier this year circumventing the CON application process.
"Also," Lampton pointed out, "the specific site is not set on Olive Branch or any one community, but only in a county which has the population specifics (which is DeSoto). So Hernando or another DeSoto community could be the site."
The new state health plan, awaiting Gov. Haley Barbour's approval, allows the board to consider a second hospital in counties with populations of 140,000 or more, verified Don Eicher, director of the Mississippi State Department of Health (MSDH) Office of Health Policy and Planning.
"We expect for fiscal year 2010 that only DeSoto County will meet the need requirement," said Eicher. "So under the criteria, any person could propose a hospital site to accommodate the proposed hospital site design, as determined to be appropriate by Bureau of Health Facilities, Licensure and Certification, Life Safety Unit, that being a site that has appropriate access (road, utilities, et cetera) without any prohibitive safety concerns within the legal boundaries of DeSoto County. To have the site approved, it would be expected to allow MSDH staff have legal access to the property. Therefore, whoever had the option to buy the property or whoever owned the property would have to grant that access to anyone entering the property."
Edward Hill, MD, a family physician from Tupelo, Board of Health member, and 2005-06 president of the American Medical Association, emphasized that changes made to the CON process "were not made for any specific hospital system and anyone meeting the required criteria can submit a CON. The changes were made to promote better access to care, particularly in rapid growing areas of the state."
Lampton said "whoever gets the CON will have to play in the trauma system (thus improve access to trauma care in North Mississippi), provide outpatient services to contiguous counties without a hospital (thus improve medical access in Tunica County), and agree to provide a high percentage of care to indigent patients and Medicaid patients (thus improve access to care for the uninsured and financially disadvantaged)," he said. "The changes weren't made to benefit any one hospital nor any one county nor any one community, although it will immediately impact DeSoto County. Also, a positive medical and economic impact should be felt across the northern part of the state. This should encourage the healthy development of a robust medical community in DeSoto County."
Concerning skilled nursing facilities and intermediate care facilities, Eicher said he is unaware of any other Mississippi law that would directly restrict Baptist from owning two hospitals in DeSoto County, adding "I make no opinion on federal antitrust laws, Medicare and Medicaid regulations."
The State Health Plan's limitation on ownership of beds states: "No corporation, foreign or domestic, partnership, individual(s) or association of such entities or of persons whatsoever, or any combination thereof, shall own, possess or exercise control over, in any manner, more than 20 percent of the beds in healthcare facilities defined in Section 41-7-173 in the defined health service area of the State of Mississippi."
Government-operated healthcare facilities are exempt from this limitation.
"I'm not aware that any MSDH regulations would prohibit Baptist from owning or controlling more than one hospital in DeSoto County," Eicher confirmed.
Walt Schuler, a healthcare attorney with Evans Petree Bogatin PC in Memphis, said no one should assume the board will rubber-stamp a CON application for a second hospital in DeSoto County.
"With the economy in a slump, many hospitals aren't filling the beds they have, and the demand for elective procedures is way down," he said. "It may not be good timing."
Unconfirmed reports show that Methodist officials plan to apply for a letter of intent to seek a CON for a hospital in Olive Branch on Aug. 1. By September, Methodist's application could be filed with the MSDH. It could take several months before the board takes up the Methodist CON application.
Lampton said he anticipates more than one CON proposal for DeSoto County.
"So if Methodist and Olive Branch want the CON, they need to offer the best proposal in the process," he said.
By press time, Baptist officials had not responded when asked if the hospital system planned to file a CON application for second hospital in DeSoto County.