On the inside: Physicians would rather not involve outside partner

Posted: Monday, August 16, 2010

Local physicians would not choose to bring in an outside partner.

That was the overall sentiment of a closed meeting held last week between medical staff members, Central Peninsula General Hospital Inc.'s board of directors and hospital administrators, according to multiple attendees. The meeting was regarding the ongoing change of governance structure discussion.

Medical staff would, however, lobby for amending the hospital's current lease and operating agreement with the Kenai Peninsula Borough, which currently owns Central Peninsula Hospital. Such a change would allow the hospital board more flexibility in its decision-making and would not involve any outside partners.

CPGH Inc. is still considering an outside partnership as well as amending the lease agreement and is expected to recommend action to the Kenai Peninsula Borough Assembly on Sept. 7. The assembly has final say on any changes.

Last week's meeting, which 29 out of 42 active medical staff physicians attended, was cordial and positive, according to those present.

Physicians say they are not completely closed off to a for-profit partnership, but it presents a lot of risks. They worry that an outside company could eliminate local jobs and negatively impact the way health care is delivered to patients.

"It's the fear of the unknown," said Dr. William Kelley. "There are a lot of issues that would need to be hammered out contractually."

Dr. David King went through a for-profit takeover in Tennessee. While that situation was an outright sale, not a whole hospital joint venture like CPGH Inc. is considering, the for-profit caused a lot of problems, King said.

Medical staff and managers were replaced with inexperienced personnel and profitability became the highest priority.

"The community was somewhat small and close-knit, and when they saw their friends let go as nurses and they saw the medical staff disgruntled and recognized that the quality of care was suffering, it was easy enough for them to drive to another community for treatment," King said.

King said he wants leaders to ensure that any potential partner has the correct priorities.

"The devil is in the details," King said. "People courting you may not have the same interest in doing things that are in the best interest of the community."

Last week, CPGH Inc. selected LHP Hospital Group, a for-profit based in Plano, TX., as its potential partner. Hospital leaders say CPGH Inc. selected LHP because the company's priorities are in line with their priorities and the central Kenai Peninsula community's.

If CPH were to partner with LHP, the borough would sell 51 percent to 80 percent of the hospital to the Texas firm. The remainder would be sold to some sort of governing board, much like the CPGH Inc. board that currently governs the hospital. Local representatives would make up half of that board.

"On the surface, it looks like we're not losing local control, but it's tough for me to envision that someone is going to put up that kind of money and we're not going to dramatically lose influence," Kelley said.

Kelley supports adjusting the hospital's current arrangement with the borough.

"Amending the lease and operating agreement is the way to go because it doesn't commit us to a loss of control and the worry about what that might mean," Kelley said.

Dr. Peter Hansen, who has been practicing medicine locally for more than 40 years, also supports amending the current lease.

"If the borough assembly and the hospital board could work out a means of loosening some of these strings, the physicians would prefer local ownership and guidance over having a sharing situation with a private hospital venture." Hansen said.

Hospital leaders are considering a change in governance structure in large part because they want to be able to grow local services. Hospital CEO Ryan Smith has pointed to a cancer treatment center as a possibility, which could be made a reality by the immediate influx of capital that would come from selling the majority of the hospital.

But physicians remain unsure.

"Growing services may be appropriate if it's organized well," said Dr. Katy Sheridan. "But if the priority is to generate money at the cost of jeopardized quality care, I don't think that's OK."

Sheridan said she worries about the impact that a partnership might have.

"There's a possibility that it could be great for this community, but I think the chance of that's low," Sheridan said. "It doesn't feel good to me at all."

Smith said medical staff members have the right to be wary.

"I think it's fair. Everyone should be skeptical," Smith said. But he stressed the physicians' concerns are also on everyone else's mind.

"All of those questions being asked are all being vetted by board members, physicians and assembly members," Smith said.

Smith said last week's meeting with the medical staff was an important step in the process.

"It opens up the potential for dialogue," Smith said. "Once the board makes a recommendation (to the assembly), then we can really work toward educating the community about the devils of the details."

Details that will be critical.

"The bottom line for me is I'm not opposed to the hospital being proactive," Dr. Theodore Barton said. "But they better do extreme due diligence, dot all the 'I's and cross all the 'T's."

Andrew Waite can be reached at andrew.waite@peninsulaclarion.com

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