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Hospital Authority should bid

Joseph Stubbs

Joseph Stubbs

Competition, which forces businesses to provide the best quality product at the lowest price, is a cornerstone of any free market society. Health care is no exception. The Albany-Dougherty County Hospital Authority, which is responsible for overseeing and protecting the community’s health care interests, is about to sign a lease with Phoebe Putney Memorial Hospital, which will give Phoebe a monopoly in the delivery of health care services for 40 years. The lease would compromise the quality of health care, result in higher costs, and frustrate efforts to attract new business. This decision will impact our community for generations to come. The citizens of this community must come together to convince the Authority leasing Palmyra to Phoebe would be a terrible mistake.

Phoebe has already demonstrated a strong track record of anticompetitive behavior. For years, Phoebe used Palmyra’s inability to provide obstetrics and cardiology as leverage to force insurers and other payers to exclude Palmyra. Phoebe maintained this unfair advantage, by preventing Palmyra from providing obstetric and cardiology services, through the use of Georgia’s certificate of need law. Palmyra filed suit, alleging violations of the federal antitrust laws, in July 2008. The case, which was initially dismissed, was reinstated by the Appeals Court. Phoebe began negotiating with HCA, the parent company of Palmyra, to purchase Palmyra, immediately following that decision. Phoebe had no option, as its business practices would have been exposed, and it would have been subject to triple damages, had the case proceeded to trial.

HCA eventually agreed to accept $195 million for Palmyra. The price tag was worth it for Phoebe, even though it is almost three times Palmyra’s actual market value. Phoebe’s CFO, in a written communication, asserted the purchase of Palmyra would allow Phoebe to “avoid (the) antitrust lawsuit,” “control all hospital beds in (the) county” and “increase (its) negotiation power with all payers.”

Knowing the FTC would not approve the merger because of the monopoly it would create, Phoebe simply brought the Authority into the deal at the final hour. The federal courts allowed the transaction, over objections from the FTC, as the Authority, a political subdivision of the state, is not subject to federal antitrust laws.

Palmyra is now owned by the Authority, and therefore the people of this community. But Phoebe, to complete its scheme to be the sole hospital in the region, has now prepared a long-term lease whereby the Authority would relinquish management of Palmyra to Phoebe for 40 years. Under state law, the Authority cannot lease Palmyra unless it determines this would lower the cost of health care or make additional facilities available in the community. Neither objective would be accomplished should the Authority relinquish control of Palmyra to Phoebe.

Do the members of the Authority, with all the land Phoebe has purchased, all the Taj Mahal buildings it has constructed, and all the outrageous salaries they pay administrators, really believe their prices are competitive? The FTC presented evidence at the hearing last year which established Phoebe’s charges are already considerably higher than the state average and that these higher health care costs are the direct result of Phoebe’s existing dominance in the local market. No one, including members of the Authority, can expect health care costs will be lower should Phoebe obtain control over Palmyra. Indeed, virtually every study in the literature confirms health care costs increase significantly when the only two hospitals in a market are consolidated. In addition, despite its “world class” costs, Phoebe has fallen far short of the mark for “world class” quality, as recent articles in The Herald have shown.

Leasing Palmyra to Phoebe, which, for the last 20 years, has concentrated on profits rather than the best interests of the community, will compromise the quality of health care and propel prices, which are already excessive, even higher. Why just give the lease to Phoebe? Why not put it out for competitive bid? There are many hospital management companies which would be willing to bid on the lease for Palmyra, if they were assured that process would be fair. Such companies could provide quality care and at a price that is lower than Phoebe’s. The management company could, as a condition of the lease, provide a certain level of indigent care and be required to pay substantially more than the $1 per year the Authority would receive from Phoebe. The Authority could also sell Palmyra. For-profit hospitals would be interested in Palmyra, though they would pay nothing more than the fair market value. Such entities would, like Palmyra, pay property tax. What great good could the Authority do with $65 million? Leasing Palmyra to another hospital management company or selling the hospital would preserve competition, and thereby protect the people of this community from a monopoly in health care.

The Authority will be holding a public hearing on Thursday at 10 a.m. in Room 100 of the City-County Governmental Building. Despite the inconvenience, timing and paucity of coverage of this hearing, I encourage all concerned citizens to attend the public hearing, as this will be your only opportunity to express your objections to the proposed lease. Citizens should, in the interim, contact members of the Authority to remind them both hospitals belong to the community, not Phoebe’s CEO.

Joseph W. Stubbs, MD, MACP, has been a practicing internist/geriatrician with Albany Internal Medicine since 1982. From 2009-10, he served as president of the American College of Physicians, the largest specialty society in the United States. He is currently secretary-treasurer of the national medical honor society, Alpha Omega Alpha.

Comments

honestlysaying 2 years, 5 months ago

Kudos to Dr. Stubbs for such an informative an honest assessment of the issue. A monopoly is good for no one. The relentless heavy handed pursuit of power and profits is already negatively impacting the medical community at large. Take a look around, what are the options for patients and physicians that want an alternative in our area? Drive 70-100 miles or more? Is this really acceptable and "healthy" for physicians and patients, for local businesses? When health care is run like a corporate structure overseeing a factory based on production NO ONE wins except the administrative power brokers and their minions. Take the time to talk to patients, and even more interestingly physicians and nurses in the community and get some honest assessments of the situation. Ask about the relationships as they are now and wonder if there will ever be a chance for improvement with a sole powerful monopoly controlling patients and physicians and ancillary staff. Do not let apathy lend tacit approval to putting the last nail in the coffin of choice and freedom. Show up at the public hearing, make the Hospital Authority live up to their duties. Take the time to look at the PBS documentary Do No Harm.

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ObjectiveEyes 2 years, 5 months ago

Thank you, Dr. Stubbs for providing the truth to Albany / Dougherty County. You really "hit the nail on the head." I wish I could believe that it will make a difference!

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JR 2 years, 5 months ago

Stubbs needs to go national - rather than spending his time trying to convince people that Phoebe is evil and that consolidation is a local phenomen. It is happening nationally (hospitals merging), and regionally, too. Valdosta is doing the same thing. Columbus did the he same thing. Gainesville did the same thing. Some in Atlanta did the same thing. If he wants a platform about the downsides of these acquisitions, he should go big or go home. There is a much bigger stage waiting than just little ol' Albany. Besides, if he really was against "monopoloies", then why was his practice about to sign a deal with HCA? Maybe, just maybe, this is the root of why he wants to make it a local issue vs national if he really really cared. Just sayin'.

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BettyBowTie 2 years, 5 months ago

This comment was removed by the site staff for violation of the usage agreement.

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Cartman 2 years, 5 months ago

This comment was removed by the site staff for violation of the usage agreement.

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josephwstubbs 2 years, 5 months ago

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JR 2 years, 5 months ago

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Sister_Ruby 2 years, 5 months ago

Of course you know her..........in fact how did you know it was a "she"??

Here you are!

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Sister_Ruby 2 years, 5 months ago

Thanks, db! For a real treat, check out my little soliloquy on My Profile.

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josephwstubbs 2 years, 5 months ago

My concern is not at all that my group lost some opportunity for employment. Albany Internal Medicine was offered employment contracts by HCA but all the members of my group had turned the offer down prior to the date of purchase and with no knowledge of the impending purchase. My concern continues to be the impact that this monopoly will have on our city and region.

You are correct that hospital consolidation is a national trend and a byproduct of ObamaCare. However, consolidation creating monopolies is of great concern to the FTC because of the proven fact that it causes prices to go up not down. This is why they are pursuing the Phoebe case so aggressively and willing to take the matter to the US Supreme Court.

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honestlysaying 2 years, 5 months ago

I think he has "gone national" in ways that many other physicians haven't, as evidenced by his term as president of the ACP, and other endeavors. Perhaps he deals with the local phenomenon because this is his home, this is where his patients and colleagues are, and this is where he decided to put his effort. I didn't see anything in the article that indicated he was saying this is only a "local phenomenon". As for his agreement with HCA what does that have to do with the subject of the article? He is likely trying to insure the survival of the practice as most are physicians in this day and age (look around and see how many private practices are left). Perhaps instead of trying to discredit Dr. Stubbs or detract from his thoughts we could concentrate on the information he provides and its impact on the community? There is a bigger stage so to speak, but the efforts have to start somewhere. I applaud him for having the conviction to speak his mind, especially after what has happened to other physicians that chose to do the same. Just sayin'

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dingleberry 2 years, 5 months ago

This was one well written, compelling document by a person who sees things from the "front lines" of the medical fight. The saying "You ain't seen nothing yet", really applies to our local situation in the medical arena--and unfortunately nationwide too. The Phoebes of the country will "bust the bank" without the slightest concern for anyone other than those stuffing their pockets from the piggy bank. And the economic and political power of these monopolists will crush all who try to slow them down.

As someone suggested in an earlier post, a showing of "Do No Harm", a documentary of Phoebe's efforts to silence all who dare stand in their way, is in order. If you have streaming video, it is on Netflix.

There will be many posts on this article soon from the Phoebe PR machine providing comments on what a medical marvel Phoebe is, how it is the most efficient and well managed organization on this part of the earth, and thank the Lord for Joel Wernick. You can fool some of the people much of the time around here but the rest of us ain't as dumb as you think we iz--most of us have gotten a Phoebe bill!

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BettyBowTie 2 years, 5 months ago

This comment was removed by the site staff for violation of the usage agreement.

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justme 2 years, 5 months ago

What does it take to recall or investigate this group of people running Phoebe ? If the local District Attorney is unable to do this do we start a petition to send to the Governors office,or maybe have our friends in Washington look into the matter................

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dingleberry 2 years, 5 months ago

Wake up. The money, power, and politics in this issue are beyond action except for "friends" in Washington that I can assure you will scatter like quail if a stand on the matter is required. The local DA can't even prosecute those involved in taking lunch money and a petition has as much chance as getting a small bill from Phoebe for hangnail removal. Locally, no politician will ever stand up against anything Phoebe wants.

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Cartman 2 years, 5 months ago

Joe's article is well written and spot-on. It also reflects the feelings of quite a few of the physicians in this area. If you know one - privately ask him what he or she thinks of Phoebe. I have heard several state that if they had understood beforehand about the Phoebe stranglehold; they would never have moved their families here and set up a practice. When I first heard that Phoebe was buying Palmyra, I felt like the community had fallen into a sinkhole. The Hospital Authority is a puppet awaiting instructions from Joel Wernick. I have as much faith in the Hospital Authority as I have in the School Board.

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dingleberry 2 years, 5 months ago

And that amount of faith is absolutely none. Both the BOE and the Hospital Authority work counter to the interest of the citizens and both are playing a big part in the downfall of the community.

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Trustbuster 2 years, 5 months ago

Dr. Stubbs is correct on this issue. Competitive bidding would open the process to transparency of Phoebe. The problem the FTC faces is legal precedents like the Slaughter House Cases which permitted the "police powers" of local govt. to monopolize licensing of a trade. The hospital authority is acting like this. It is deciding that Phoebe could monopolize a certain enterprise and reducing competition. I encourage the author and the public to study their constitutional history concerning the Slaughter House Cases. A local governing authority is allowing interference in the practice of a legitimate trade.

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ObjectiveEyes 2 years, 5 months ago

Even though the time (10 am) is not convenient for those of us who work for a living, let's crowd the room. Maybe, just maybe, our collective voices will be heard. Monopolies are forbidden in most instances (and, rightfully so). Why should healthcare monopolies be any different?

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dingleberry 2 years, 5 months ago

Does anyone remember when our "friend and world's greatest manager using other's money" Joel told his boy Jethro Bodine, who woke up one morning, the following: "We will continue to pay property taxes when the Palmyra deal goes through" (literary license on the exact quote)? Well, the property that was aka Palmyra was valued at about $20 million at that time for land and buildings and was bringing in over $500,000 annually in taxes--if you want the exact amount be my guest and look it up yourself.

Back to the chase, that same property is now in the name of the Hospital Authority and still coded commercial--at the moment. Now, as Joe says, Phoebe agreed to pay a whopping $195,000,000 big ones to HCA for the instant property which is over 9 times the previous value. Now, for those who don't follow the thread, here are the questions:

Will the Hospital Authority, you poor taxpayers, and Jethro Bodine expect "Joel the powerful" to cough up the tax money as promised? And, will the amount now be based on the $195,000,000 value--about $4.5 million or so big ones in taxes?

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whattheheck 2 years, 5 months ago

Well, Dingle, that is a a mighty fine question or two that should be posed to the Hospital Authority and the rest of the leaders who have a vested interest in the matter. BTW, you forgot to capitalize "powerful" in the title, like with Attila the Hun. .

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dingleberry 2 years, 5 months ago

Thanks for the kind words and subtle correction of my error.:) And on the subject of errors, the tax figure at the new sale price is $3 million, not $4,5 million--but the same question still applies.

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agonized 2 years, 5 months ago

Thank you very much, Dr. Stubbs, for such a well-written column, explaining all of the ripple effects of Phoebe's acquisition of Palmyra. I was told, by a doctor no less, that the reason the FTC was investigating the transaction and challenging as far as it could go was for the same reasons dingleberry pointed out. An investigator told this doctor that if this deal went through, that was the final straw for every small town, or even larger ones, in terms of skirting anti-trust rules for hospitals.

I further appreciate Dr. Stubbs' willingness to speak out on this issue. I've also had doctors tell me privately that they have problems with the "system", but that they've established their practices here, have friends here, children in school, etc. One doctor in particular who challenged the "system" (and it wasn't the Factoids doctor) told me that he had endured quite a lot for sticking his neck out.

Although I don't work at PPMH, I know people who do and when honestlysaying states: "When health care is run like a corporate structure overseeing a factory based on production NO ONE wins except the administrative power brokers and their minions" he is so on the mark. Among certain departments that you would never think about, there is such an emphasis on "productivity". I asked the person, "What are you supposed to do, go out and collect sick/hurt people?" The reply was not really, but that it was important to do everything as quickly as possible to go on to the next victim, er, patient. Boy, that's really showing "A Hospital with a Heart"!

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ObjectiveEyes 2 years, 5 months ago

The administrative and financial divisions of PPMH are morally bankrupt. Everyone in management is fully aware of the unethical behavior, yet, they keep supporting the efforts anyway. Check the roster of employees in the finance department that have left since the current CFO was hired. 99% left because they were being instructed to constantly work in the "gray" areas. The only ones left are the "yes men."

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Outtahere 2 years, 5 months ago

I am so curious about the deleted posts. It usually does't happen that many times per topic.

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Sister_Ruby 2 years, 5 months ago

Apparently those deleted posts identified "JR" by her first name. That's the only thing that makes sense. I guess it's also possible that Wernick has editorial authority of the Herald, based on his far-reaching control.

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tragedy 2 years, 5 months ago

I am grateful to Dr. Stubbs for his courageous and beautifully articulated editorial. A free market economy is the hallmark upon which our great country was built, and a return to this model is what our country desperately needs. When citizens in the private sector own and operate businesses, they are driven to operate more efficiently and cheaply because their very survival in a free market system requires it. A free market system encourages innovation and more prudent decision-making. If Phoebe continues to operate as a monopoly, our community is faced with a terminally ill and fatally flawed health care system. Albany will be left with a very high cost operation that will inevitably offer lower quality care at a much higher cost.

As an insider at Merck, I can state that the higher than national average health care costs played a critical role in the decision to close the Flint River plant. The cost of employing high salary workers with higher than average health care costs was a key ingredient in the cost benefit analysis. In the end even a global corporation such as Merck realized the cost of operating in Albany was too high.

Our community is in desperate need of a return to freedom of speech and healthy debate! Due to the throat hold Phoebe has on community members…..either someone or a family member works at Phoebe or one of us will eventually require medical care ourselves…our community appears to be held hostage by Phoebe.

At a recent conference at the Hilton Garden Inn, a panel from the Terry College School of Business at UGA stated that Georgia fell behind the nation in terms of growth and sustainability. Furthermore, it was stated that Albany falls behind in the state in terms of turnaround and growth. Our community appears to be asleep at the wheel. It is tragic to witness the decline of a once thriving community.

Perhaps as an earlier person stated, Dr. Stubbs should take his passionate call to arms nationally. His thoughtful and concerned opinion appears to be lost on a community that simply could care less. It is highly disappointing that his medical colleagues, who are also highly educated and tuned into what is happening, have chosen to remain silent. This silence alone should speak volumes of the fear people have of Phoebe. The silence is deafening.

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Sister_Ruby 2 years, 5 months ago

That's what happens when over half of the population doesn't have to pay for anything.........THAT PROBLEM IS ALMOST OUR NATIONAL PROBLEM!!

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ObjectiveEyes 2 years, 5 months ago

Thank you, tragedy for bringing Merck into the conversation. PPMH has denied their culpability concerning the manufacturers that have left Albany in the last 10 years. The same can be said of Cooper Tire. In 10 years we will be saying the same about Miller and P&G. It will be too late then.

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tragedy 2 years, 5 months ago

I am grateful to Dr. Stubbs for his courageous and beautifully articulated editorial. A free market economy is the hallmark upon which our great country was built, and a return to this model is what our country desperately needs. When citizens in the private sector own and operate businesses, they are driven to operate more efficiently and cheaply because their very survival in a free market system requires it. A free market system encourages innovation and more prudent decision-making. If Phoebe continues to operate as a monopoly, our community is faced with a terminally ill and fatally flawed health care system. Albany will be left with a very high cost operation that will inevitably offer lower quality care at a much higher cost. As an insider at Merck, I can state that the higher than national average health care costs played a critical role in the decision to close the Flint River plant. The cost of employing high salary workers with higher than average health care costs was a key ingredient in the cost benefit analysis. In the end even a global corporation such as Merck realized the cost of operating in Albany was simply too high. Our community is in desperate need of a return to freedom of speech and healthy debate! Due to the throat hold Phoebe has on community members…..either someone or a family member works at Phoebe or one of us will eventually require medical care ourselves…our community appears to be held hostage by Phoebe. At a recent conference at the Hilton Garden Inn, a panel from the Terry College School of Business at UGA stated that Georgia fell behind the nation in terms of growth and sustainability. Furthermore, it was stated that Albany falls behind in the state in terms of turnaround and growth. Our community appears to be asleep at the wheel. It is tragic to witness the decline of a once thriving community. Perhaps as earlier stated, Dr. Stubbs should take his passionate call to arms nationally. His thoughtful and concerned opinion appears to be lost on a community that simply could care less. It is highly disappointing that his medical colleagues, who are also highly educated and tuned into what is happening, have chosen to remain silent. This silence alone should speak volumes of the fear people have of Phoebe. The silence is deafening

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Sister_Ruby 2 years, 5 months ago

Not sure which "violation of usage agreement" rules these deleted posters incurred but it's a crock, Herald, and I'm disappointed in whomever is in charge of the deletion button. I cannot imagine which "rule" the naming of "Jackie" violated!?!?!?!? Could be Jackie Paper, Jackie Wilson, Jackie Chan, Jackie Robinson, Jackie Daniels, Jackie Wernick, Jackie Crackie, Jackie Ryan (of Tom Clancy fame), Jackie Collins, you know........Herald you jumped to conclusions and I'm ashamed of you.

Could have been Captain Jackie of Billy Joel fame. Ashamed of you.

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BettyBowTie 2 years, 5 months ago

Censorship at the Herald is alive and well. The comments that were removed were not in any way abusive or obscene, yet valid opinions by many here were removed.

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Cartman 2 years, 5 months ago

Phoebe already occupies its new Phoebe North conquest. Has anyone else noticed the untimeliness of the Hospital Authority's call for public input? What a fraudulent charade.

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