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by EMILY GURNON
ANYBODY SURVEYING THE HEALTH
CARE LANDSCAPE of the North Coast -- not to mention the rest
of the country -- is bound to be getting queasy. Costs and insurance
co-payments are
  up. Payments
to doctors and hospitals are going down. HMOs have pulled out.
Hospitals threaten to close. Doctors are going into real estate.
Panic attacks, anyone?
Add this to the list of changes:
A group of Humboldt County surgeons is putting together plans
for a controversial new "boutique hospital" in Eureka
-- a place where you can get your hip replaced or your gallstones
removed with better care and at no more cost than a hospital
would offer.
That, at least, is the word
according to the proponents of such schemes. Critics say it may
put the full-service hospitals out of business and call the surgeons
behind it a bunch of selfish money-grubbers with an anemic sense
of ethics.
The "specialty surgical
hospital," as it is formally known, would perform only scheduled
elective surgeries -- other services, such as emergency care,
would be left to the existing hospitals. It would be built in
part with money from physicians themselves, some 15 to 20 of
whom have agreed to invest anywhere from $7,500 to $30,000 in
the project. At least half of the money, as well as the management
know-how, would come from a Chicago-based company called National
Surgical Hospitals, which runs 15 other such facilities throughout
the country.
The advantages for the surgeons
are many. Without the distraction of an emergency ward -- where
very sick patients needing immediate help tend to mess up surgical
schedules -- doctors can run a much more efficient operation.
If they come in as founding partners, they can share in the profits
-- making as much as a 25 to 30 percent return on their investment
per year, according to the National Surgical Hospitals Web site.
Local
control
But most attractive to Dr. Greg
Gibb -- one of the founding members of the new facility -- is
the prospect of a hospital that would be controlled locally,
by himself and his colleagues in Humboldt County. They would
have a say in its design, its equipment and its management. That
isn't the case with St. Joseph Hospital, owned by St. Joseph
Health System in Orange, he said.
"I don't feel in partnership
with this hospital the way I felt I was in partnership with General
Hospital," the ophthalmologist said. "With General
Hospital, I thought that my view was sought out and listened
to. It's just not true with the St. Joseph administration. They
take orders from Orange County and they do their thing. It's
just not the same.
"It's not a bad hospital.
The people who run St. Joseph Hospital are good people. We wish
them well. We want them to succeed," he said. But to have
only one hospital in town is "not good for choice. It's
not good for local control."
Bonnie Cyr, business manager
at Humboldt Orthopaedic Associates Inc. in Eureka, said she has
been acting as the secretary of the group of founding members,
which also includes orthopedist Dr. Ray Koch. Cyr told the Journal
that the project is in the "planning and discussion"
stage. "It isn't real yet," she said.
But according to Gibb, it's
very real. The partnership is negotiating to purchase a site
behind the Eureka City Schools office. Groundbreaking could happen
within months, and from there, it will be 20 months until the
new hospital opens, at a cost somewhere under $20 million, he
said. "I don't see any reason why it's not going to happen."
Other founding members declined to be interviewed on the subject.
They include, according to Gibb, a number of orthopedists, as
well as physicians in the fields of podiatry, neurosurgery, general
surgery and gynecology.
A
nationwide phenomenon
Boutique hospitals may be new
to Humboldt County, but they have been sprouting up throughout
the nation in recent years. Specializing in areas such as orthopedics,
cancer treatment, rehabilitation and cardiac care, these physician-owned
facilities often feature lavish furnishings such as leather furniture
and fine artwork. They endeavor to pamper their patients, offering
luxury linens and special meals that can be ordered from a menu.
"We call our patients `guests,'" an official with a
new boutique hospital in south Arlington, Texas, was quoted as
saying.
The trend has been met with
alarm in some quarters. Hospitals in Ohio, Idaho, Wisconsin,
and Fremont, Calif., have fought vigorously to protect their
turf against the boutique invaders.
Here in Humboldt as well the
prospect of a new hospital is being greeted, by some, about as
warmly as the arrival of a deadly new virus. "From the standpoint
of the community, it's a disaster," said one surgeon not
involved in the project, who asked that his name not be used.
Such a facility would provide some of medicine's most profitable
services, leaving the community hospitals with fewer of those
big payers to offset money-losing departments like the emergency
room. "It's the perfect model to siphon off the cream of
the medical community," agreed another.
It also goes against the idea
that physicians have a responsibility to the community at large,
rather than just their own patients, said Dr. David Gans, a physician
at Mad River Community Hospital. "What this reminds me of
is the days of the city-states in Italy, where physicians had
patrons -- I would treat the Medici family but the rest of the
people, tough luck."
Officials at St. Joseph Hospital
said they have "not been invited" to be part of the
discussions on the new hospital and therefore know very little
about the effort. But Dr. Kenneth Stiver, vice president of medical
affairs of St. Joseph, said he sees it as a threat for the same
reason cited above. "If profitable services are carved out
there will be even greater financial challenges to [St. Joseph]
to remain full-service," he said.
Nonsense, Gibb countered.
"This is an ant on an elephant,"
he said. St. Joseph, with its parent company, "is a big,
huge, strong organization. I'm not very sympathetic to hospitals
complaining about someone running them out of business. There
is a tremendous amount of money going to hospitals in this country."
A
threat to St. Joseph?
Still, the fear that St. Joseph
and the other community hospitals may be threatened by the boutique
facility has led some doctors to steer clear of the new project.
Dr. Thomas Loncar, a general surgeon, was among those approached
about it. He read the prospectus, then decided against investing,
partly because it would mean spreading himself too thinly. "I
couldn't practice exclusively at that hospital, because I deal
with patients who need intensive care services and ER services,"
he said. But there was more. "Philosophically, I was concerned
that it will siphon off patients that hospitals can make money
off of. That troubled me."
Surgeons first began floating
the idea of a new hospital in part because some were unhappy
about being forced to provide emergency room coverage as a part
of their work at St. Joseph, Loncar said. About six months ago,
St. Joseph changed its policy, making the ER coverage voluntary
and paying a stipend to those who agree to it.
But dissatisfaction with Eureka's
sole remaining hospital extends to other issues. According to
a recent article by Dr. Stephen Kamelgarn in the Humboldt-Del
Norte County Medical Society Bulletin, much of the medical community
has been "extremely dissatisfied" with the direction
taken by St. Joseph over the past several years. "Surgeons
have been stymied and frustrated by the loss of surgical services.
Generalists and medical sub-specialists have been alarmed at
poor nursing ratios, loss of morale among hospital staff, [and]
sub-contracting out of ancillary services" such as physical
therapy, with an attendant loss of availability of those services,
he wrote.
Loss of surgical services includes
less time available for scheduling elective surgeries -- those
that can be done at any time -- physicians said. When St. Joseph
bought General Hospital, it closed the latter's three operating
rooms; that has resulted in bottlenecks, said Dr. Robert Green,
a Eureka plastic surgeon who said he opted out of the new hospital
project for lack of investment money. But, he said, "I am
in favor of anything that gives the patients of Humboldt County
more choice and anything that ups the competition between the
hospitals."
Humboldt County Supervisor John
Woolley said he caught wind of the plan for a new hospital and
hopes to get more information from both its supporters and its
critics. He is concerned, he said. "We want to look into
it; we want to weigh the consequences, so if there is an impact
we can avoid it." Stopping such a hospital from opening,
however, will not do away with the reasons it was started in
the first place, he said.
Legislators
step in
Lawmakers elsewhere have responded
to the controversy around boutique hospitals by drafting laws
to mitigate their alleged threat. This week, the state Senate's
Health and Human Services committee was scheduled to hold a hearing
on SB 828, a bill introduced by Sen. Liz Figueroa, D-Fremont,
that would restrict the ability of the state Department of Health
Services to issue a license to a new hospital near an existing
hospital with an emergency room unless the new hospital also
has an emergency room and does more than just surgery.
"Before you know it, the
average person's not going to have a community hospital around,"
Figueroa said. "It's very scary. Where are we going to go
for emergency services?"
And on Tuesday, U.S. Rep. Pete
Stark of Hayward teamed up with Rep. Jerry Kleczka, D-Wisc.,
to introduce a bill in Congress that would close what Stark's
office said was a loophole in two previous medical conflict-of-interest
laws, known as "Stark I" and "Stark II."
The Stark laws limited the ability of medical providers to refer
patients to an entity in which they had a financial interest.
But there was an exception: doctors who had part ownership of
an entire hospital. Stark's new bill, HR 2490, would close that
loophole to fight the proliferation of boutique hospitals --
"a very sick trend," according to the congressman.
Indeed, the biggest roadblock
to Eureka's new boutique hospital may come from Sacramento or
Washington, D.C. "My big concern is that the government
will pull the rug out from under the project," Gibb said.
"I think that would be a mistake."
Laws designed to squelch this
new direction in medicine only protect the status quo, and what
is the value in that? he asked. "Does everyone think the
hospital system in this country is working so well that we should
all stand up to defend it? Not me. I think it's completely broken.
"That legislation is pure
and simple anti-competition legislation that is being pushed
by big interests [the major hospitals] who want to protect their
turf," Gibb continued. The amount of money he'd make referring
a patient to his own facility, when thousands may be using it,
is "trivial," he said. The conflict of interest charge
"is just a big smoke screen."
Why should patients choose the
new hospital over St. Joseph or Mad River? "I'm not sure
they should," Gibb said. But it will take Medicare, and,
he expects, Medi-Cal; it will be a "beautiful and extremely
well-run facility"; and it won't be affiliated with a religious
order.
"It's just a choice that
they have. I think choice is good."
New hospital's corporate
backer
EUREKA'S NEW BOUTIQUE HOSPITAL is being
built by local physicians in partnership with a Chicago-based
corporation called National Surgical Hospitals (NSH). (www.nschinc.com)
Promising "a better way to deliver
surgical care," the company runs 15 other specialty hospitals
across the country, including facilities in Walnut Creek, La
Jolla and San Diego; Mesa and Phoenix, Ariz., and Logan, Utah,
according to its Web site. Most focus on orthopedic, spine and
pain management care.
In addition to putting up money for its
new hospitals, the company takes responsibility for keeping the
facility in compliance with government regulations, cost reporting,
billing, collections, employee benefits, computer systems, marketing
and other aspects of the business.
Patients are "extremely satisfied
with the level of focused care and attention," NSH boasts.
On the other hand, "The local hospital is not likely to
welcome this new form of competition."
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