No Olive Branch Extended on Mississippi Medical News

No Olive Branch Extended

By: LYNNE JETER

State Lawmakers Mull, then Spurn Methodist CON Legislation

OLIVE BRANCH--Once again, state lawmakers mulled legislation that would have allowed Methodist Le Bonheur Healthcare, Inc. to build a 100-bed hospital in Olive Branch, but ultimately spurned the bill that would have bypassed the traditional certificate of need (CON) process.

Methodist's defeat was another in a long succession of attempts since the late 1990s to capitalize on the population boom and build an acute care hospital in Olive Branch, located in the eastern part of DeSoto County. Baptist Memorial Hospital DeSoto, established as a small community hospital in 1988, is located in Southaven, on the western end of the county.

Previous Pacts

When Baptist-DeSoto added a 140-bed tower in 2004, bringing the total number of hospital beds to 339, the CON for the $175 million expansion represented the largest application of its kind filed at the time in Mississippi, based on size and cost.

Around the same time, Randon and Lynn Carvel of Olive Branch moved forward with constructing their CON-approved $2 million, 12,000-square-foot ambulatory surgery center. The Carvels had built the Family Cancer Center and Stern Cardiovasular Specialists facility in Olive Branch in 2000, and soon after built in Southaven a diagnostic imaging center, which did not require a CON. (The state health department did grant the Carvels a contested CON for the center's MRI.)

The Carvels, backed by Olive Branch officials, had disagreed with Baptist-DeSoto over that hospital's proposed expansion until the parties reached a mutual agreement during the summer of 2003.

At the time, the compromise called for hiring a health-planning consultant to study the need for acute care hospital beds in Olive Branch. If the consultant's study determined a need for acute care services, and the findings were acceptable to all parties, Baptist-DeSoto would have first dibs on filing a CON application for hospital beds in Olive Branch.

The compromise also called for Baptist-DeSoto to establish a community advisory board to provide input to the hospital to develop healthcare facilities and services in DeSoto County, with Olive Branch Mayor Sam Rikard serving as the board's inaugural chairman.

For years, Olive Branch officials had wanted a medical facility similar to St. Francis-Bartlett, a 90-bed acute care hospital located in Bartlett, a suburb north of Memphis. City officials had expressed a desire to work with Baptist-
DeSoto, St. Francis, or Methodist Healthcare to build a hospital in Olive Branch. Baptist-DeSoto has strongly opposed proposals by Methodist to build such a facility since 1999, when the state health department rejected Methodist's plans to build a proposed 30-bed hospital.

Road Less Traveled

It's not highly unusual for healthcare organizations to circumvent the CON process via legislative measures to gain approval to build hospital beds, a practice the Mississippi Hospital Association (MHA) has strongly contested.

In 2004, when state Rep. Frances Fredericks held a public meeting to hear arguments on House Bill 456, which would have paved the way for Methodist's proposed 100-bed acute care hospital in Olive Branch, MHA successfully defeated the legislation and vowed to "again oppose the unilateral granting of any CON by the Mississippi Legislature."

Recently, MHA COO Eddie Foster emphatically said "I don't care who it is," healthcare providers shouldn't pursue a CON "through the legislature."

In 2006, Methodist again pursued legislation for a proposed hospital. The bill died in the House Public Health Committee, with state Sen. Tommy Woods saying the committee was "just not receptive to this year's collection of Olive Branch hospital bills." (Another failed bill that year would have removed "all except specialty hospitals" from the CON law.)

"We've been trying to (build this hospital) since 1998," Ricard said. "We keep encountering the bureaucracy of the state health plan, and we're just trying every year to make a hospital possible in Olive Branch. I truly believe that one of these days it will happen."

In 2007, state Sen. Merle Flowers, once a key player on Sen. Roger Wicker's staff, championed Senate Bill 2764 that allowed Methodist to build its Olive Branch hospital. "Legislatively bypassing the Department of Health," he explained, "is an extraordinary remedy that I believe is necessary." The bill died in the House.

Sole Exception

Yet that same year, state lawmakers approved a CON for an east Mississippi hospital.

"There's only one instance of a short-term general acute care hospital (non-specialty) being approved and that was during the 2007 legislative session," explained Don Eicher III, director of the Office of Policy and Planning. "It was for the construction of an acute care hospital in Kemper County that will be named the John C. Stennis Memorial Hospital." The CON for this hospital was issued by MSDH on January 22, 2009.

Meanwhile, last August, Methodist's CON application for the four-story hospital was again denied. Staff reviewers of Mississippi's Division of Health Planning and Resource Development said the plans were not in "substantial compliance" with the state's health plan to merit its construction. The report also questioned the financial feasibility of the $151 million project, which Methodist had proposed to pay with cash on hand. Audited financial statements showed only $113 million on hand in 2007.

Methodist officials requested and then cancelled a December 2008 hearing before the state's planning officer and review board, and withdrew their CON application.

"This isn't over yet," said Methodist CEO Gary Shorb. "We'll go on to the next step."

For more information on the controversial CON battle in Olive Branch, read "Methodist's Plan B" in this edition. For a closer look at how southern states are handling the CON process, and for an update on the CON task force agenda in Mississippi, read both articles in the May edition of Mississippi Medical News.