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News Hubbs says Davis bill would block AMC-Mission merger

Sen. Jim DavisBill well-intentioned but misled, say critics

CEO of Franklin’s Angel Medical Center, Tim Hubbs, says that a bill recently introduced by N.C. Senator Jim Davis (R-Franklin), if passed, would block a planned affiliation agreement between the regional hospital and Asheville-based Mission Health Systems.

“There’s no question, that if it passed without change, it would postpone any ability by Angel and Mission to move forward with the affiliation or do more together than we're doing today,” Hubbs said on Monday. Angel and Mission have been exploring a merger agreement for almost two years.

The bill would modify the Certificate of Public Advantage agreement, or COPA, which was granted to Mission in the mid 1990s when the hospital took over its main competitor in the area, St. Joseph’s Hospital. The agreement was intended to protect consumers against rising costs and reduced access to healthcare that could come of the loss of competition resulting from the merger. Compliance with the COPA also meant protection for Mission from potential anti-trust lawsuits.

The bill also calls for Mission to “immediately halt all activities related to management agreements, acquisitions, affiliations, and joint ventures ... until Dec. 31, 2011,” or until the state has time to study and implement price caps on all Mission activities.

According to Davis, a Franklin orthodontist, the bill is a response to a recently produced analysis of the COPA that was commissioned by the state, which he says shows the COPA gives Mission an unfair advantage over its competitors around the region. “There are some concerns in this economic analysis that need to be addressed,” he said.

“I don’t want all the little hospitals in rural North Carolina becoming emergency medical clinics and flying all of their patients to Mission,” explained Davis. He noted that it is impossible for smaller institutions to compete with a large corporation like Mission but added that his main concern is for the healthcare consumer and physicians.

Janet More thinks Davis’ concern is misguided. More, director of marketing for Mission, says that the analysis of the COPA was done at the request as well as the expense of Mission, and that its academic recommendations do not indicate that Mission has received any unfair advantage in the history of the agreement.

More says that Mission has voluntarily participated in the COPA, the only such agreement in North Carolina and one of only a handful in the entire country. Though it does offer the hospital some protection, it also carries with it huge responsibilities.

“There is no other hospital in North Carolina that reports more frequently and in more detail to the State of North Carolina than we do,” said More. “They oversee our margin, they oversee our costs, they even detail how our board needs to be configured.”

Licensed for 800 beds, Mission is the largest hospital as well as the largest employer in Western North Carolina. Besides severely restricting Mission’s activities, More says the bill would dramatically affect affiliates such as Blue Ridge Regional Hospital which would likely lose a recent $300,000 grant to recruit physicians and dentists to Mitchell and Yancey County.

Passage of the bill would be an “enormous setback” for Angel says Hubbs, who adds that many small hospitals like Angel have no choice but to find a larger partner if they hope to attract physicians and serve their communities with a full range of healthcare services.

“I don’t think that’s really the case,” said Hubbs of Davis’ assertion that the COPA gives Mission an unfair competitive advantage. “There’s no question that they own the only acute care hospital in Buncombe County, but there are multiple other hospitals in the region.”

“I think he’s getting some information from some people that don’t like Mission ... And I think that some of that information is either biased or just bad.” — Tim Hubbs, CEO of Angel Medical Center

Hubbs says he doesn’t believe it was Davis’ intention to block Angel’s affiliation with Mission by introducing the bill. On the other hand, he wonders how Davis arrived at his conclusions. “I think he’s getting some information from some people that don’t like Mission, have not liked mission for a lot of years,” he said. “And I think that some of that information is either biased or just bad.”

Some other regional hospitals, however, are also questioning the fairness of Mission’s current agreement with the state. A letter sent out by Jimm Bunch, CEO and president of Park Ridge Health in Hendersonville, asks area physicians to study the COPA analysis and send comments to the Attorney General or the state Division of Health Service Regulation.

“Park Ridge is not afraid of competition, but under the current COPA, Mission is able to compete in ways that are only possible because of the state-permitted merger with St. Joseph,” writes Bunch. “I believe the restrictions on Mission need to be strengthened.”

Whether that is true or not, Roger Hartley at the Department of Political Science and Public Affairs at Western Carolina University still questions the motivation behind the bill. “If this is something that is handled by a state agency, then it would surprise me that the General Assembly is getting involved,” said Hartley. “It raises questions.”

Similarly, More says the bill attempts to use legislation to address what should be an administrative function of the state. According to More, after the conclusion of a public comment period on the analysis, the state will develop its own set of recommendations that will take the public input, the analysis and current legislation into consideration.

Meanwhile, even Davis admitted that his bill is just the beginning of a conversation. He also acknowledged that small hospitals like Angel may not be able to survive unless they have an alliance with a larger institution.

“I have every confidence that Tim Hubs and the board at Angel Hospital are doing everything they can to keep the interests of Macon County citizens foremost,” he said, adding that the timing of his bill was only coincidental.

The analysis of the Mission COPA can be read at http://www.ncdhhs.gov/dhsr/ncmcc/pdf/copareport.pdf. The bill to modify the Mission's COPA agreement can be read at http://www.ncleg.net/Sessions/2011/Bills/Senate/PDF/S698v0.pdf.


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