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Lafayette hospital administrators have not exactly rolled out the welcome mat for Unity Medical Center.
Although Unity officials have called their new enterprise center on Creasy Lane "complementary" to local hospital care, Greater Lafayette Health Services Inc. administrators haven't seen it that way.
"They're about as complementary to the hospitals as a barnacle is to the hull of a ship," said John Walling, president and chief executive officer of GLHS.
Walling has since toned down the rhetoric but hasn't changed his view about the potential threat posed by Unity, a medical facility co-owned by a group of 46 Lafayette physicians.
"We're not doing this to undermine the hospitals," said Dr. Robert Hagen of Lafayette Orthopedic Clinic, a division of Unity Healthcare and part owner of Unity Medical Center. "Competition drives people to be better. It doesn't have to be nasty – it's a friendly competition."
But competition could undermine the not-for-profit hospital corporation's ability to reinvest in parts of the hospital operation that are expensive to run, such as emergency services, Walling said.
Valid concerns on both sides
The St. Elizabeth School of Nursing, the emergency rooms and neonatalogy department "are serious financial drains on GLHS," he added.
Revenue-generating services such as X-ray, CAT scan and other imaging services compensate for operations that cost more than they bring in, Walling said. Imaging, also known as radiology, is one of the prime areas in which Unity Medical Center will compete head-to-head with the hospitals.
So, is competition good for health care delivery or a threat? Outside experts could only offer general advice on the subject. Both sides have valid concerns, said J.B. Silvers, professor of health systems management at Case Western Reserve University.
"The fact the physicians have an equity interest does mean they have an investment," Silvers said. Inevitably, that does take patients and revenue away from established providers."
And hospital concerns about revenue losses are probably warranted, said Robert Myrtle, professor of health administration and gerontology at the University of Southern California.
"It will harm them for a variety of reasons," Myrtle said. "The claims the hospital makes are probably true -- the new clinic will draw some of the patients the hospital might get."
How many patients and how much revenue, only time will tell. Walling declined to provide specifics about how much money the hospitals stand to lose.
When Home Hospital merged with St. Elizabeth Medical Center in 1998, one of the intents was to reduce costs by eliminating duplication of services. Maternity and cancer radiation services consolidated at Home Hospital, and St. Elizabeth became the center of cardiac procedures.
The opening of Unity Medical Center represents a return in some ways to those days of "duplication of services and equipment," said Dr. Jeff Brown, president of Arnett Clinic. Arnett Clinic works closely with the hospitals and leases its building from GLHS.
The hospitals refer patients to Arnett, which has a preferred provider relationship with the hospital corporation. Brown's opinion about duplication of services is not shared by radiologists at InnerVision Advanced Molecular Imaging, one of Unity Healthcare's major divisions.
They contend their imaging services are an improvement upon, not a duplication of, available health care services. The argument should sound familiar to Walling. It's one he used in pre-merger days to explain why Home Hospital was teaming with Arnett Clinic to start a cancer radiation treatment center in direct competition with services then offered at St. Elizabeth.
Impact on employees, too
Unity Medical Center could draw hospital employees as well as patients, Brown pointed out.
"There is clearly competition for the technical employees," Brown said. "The hospital virtually provides services to the community 365 days a year, 24 hours a day and seven days a week. Unity certainly makes it more difficult.
The hospitals also will see fewer surgeries as the Unity surgeons relocate some of their surgery schedule to Unity Surgical Center, although Hagen downplays that concern, Brown said. Many of the Unity surgeons, including orthopedists, already split their operating time at one of the hospitals and the other ambulatory surgery centers in the area, such as Sagamore Ambulatory Surgery Center.
Before Unity Surgical Center opened, Hagen was operating at the hospitals Tuesdays and Thursdays. He operated on Fridays at the Sagamore Surgical Center. Now, he operates at Unity on Tuesdays rather than the hospital.
Hagen thinks the change could open up space for the hospitals to provide more outpatient procedures, which account for more than 75 percent of hospital surgeries.
As to Unity Medical Center's undermining the hospitals' ability to provide charity care, Hagen is adamantly in disagreement.
"That is absolutely not true," Hagen said. "The ironic thing about patients who are uninsured or underinsured is, I'm more likely to (see) them away from the hospital because the price is better."
For example many German Baptist patients, generally farmers, do not have insurance. Hagen said he is more likely to schedule their surgeries at a local ambulatory surgery center because the centers are more willing to make a deal or find an accommodating price.
As for the competition Unity Medical provides to Arnett Clinic, Brown is not worried. Arnett has more than 146 physicians in 28 specialties. It operates out of 10 Greater Lafayette locations and nine regional offices.
"There are some fine physicians in the community who are not in Arnett Clinic," Brown said. "To compete with Arnett Clinic is certainly fine."
Source: Lafayette Journal & Courier