ALBANY, Ga. -- Albany internist Dr. Charles Gebhardt says members of the Hospital Authority of Albany-Dougherty County face an ethical dilemma of their own making as they consider Phoebe Putney Health Systems' request to lease the former Palmyra Medical Center campus for the next 40 years at a symbolic price of $1 a year.
Gebhardt, the current president of the South Georgia Physicians Association who previously served on the Authority, notes that, as duly appointed public officials, board members are bound by an oath of office.
"There is no concept of responsibility on that board," Gebhardt said. "I was told when I was appointed that we had no actual role, that we were there to rubber-stamp whatever was presented to us by Phoebe officials.
"I think it's very important, then, that as they consider this lease question that everyone on the Hospital Authority remembers that they took an oath of office when they were appointed to the Authority. They are obligated to do what is in the best interest of this community. The Authority was designed to provide oversight. If they don't do that, if they simply bend to the will of the hospital administration, they are violating their oath of office."
Gebhardt is one of the members of the local medical community who has joined the loosely organized community group known as STOP (Stop the Takeover of Palmyra) that is calling on the local Hospital Authority to consider options other than granting Phoebe control of operations of the former Palmyra facility that has been renamed Phoebe North.
STOP members plan to speak Thursday morning at a 10 a.m. public hearing that state law requires to be conducted 60 days before a hospital authority sells or leases a property it owns. With the Hospital Authority's approval of the lease, Phoebe Health Systems officials say they plan to proceed with full integration of the former Palmyra campus on Aug. 1.
Opponents of the lease say health care costs in Albany/Dougherty County, and by extension, all of Southwest Georgia, will increase significantly if Phoebe obtains what they term to be a "monopoly" on health care in the region.
Jackie Ryan, Phoebe's vice president of corporate strategy, however, said the fears of growing health care costs in the region are overstated. The hospital's costs, she said, are near the same level or less than those of similar facilities. She pointed out that by leasing the former Palmyra campus to Phoebe, the Hospital Authority would simply be allowing the community to use assets it already owns.
"I can't stress enough that the Hospital Authority owns all the assets we're talking about here," she said. "It's that old question of 'Who owns Phoebe?' The answer is everybody and nobody. The assets are controlled by the Hospital Authority.
"I am just baffled by these people's motivation. How can they come up with the idea that this is not a good thing for the community?"
Albany attorney Bo Dorough, who also is part of the STOP movement, agrees with Gebhardt's assessment of the Hospital Authority's responsibilities, but takes it a step further. He said that board had an obligation to call for top Phoebe officials' to resign when evidence indicated they'd violated federal antitrust laws.
"The Hospital Authority has fiduciary obligations to the community," Dorough said. "Despite their best intentions, they have conducted themselves as agents of the hospital (Phoebe). Evidence presented and filings by the Federal Trade Commission indicate one member of the Authority did not even read the complaint (filed by the FTC) against Phoebe.
"Authority members did not even ask hospital officials one question. According to the terms of the lease (under which Phoebe Health Systems operates), if the Authority verified that (Phoebe) violated antitrust laws, they should have immediately called for the resignation of all top officials involved."
Dorough said Hospital Authority members rejected their own responsibility as well.
"Every person on that board should have resigned when they learned that (Phoebe) was systematically breaking the law," he said.
Last November, Dorough filed suit on behalf of Dr. Corleen Thompson, a local epidemiologist, against the Hospital Authority of Albany-Dougherty County, Phoebe Putney Memorial Hospital, Phoebe Putney Health System and Palmyra Medical Center, contending, among other things, that authority members violated their responsibilities as public trustees by failing to question Phoebe's attempted merger with Palmyra.
A temporary restraining order against Phoebe sought by the suit was denied and in late December, the attorney dropped the suit.
Dr. Joe Stubbs, past president of the American College of Physicians and a practicing internist/geriatrician with Albany Internal Medicine, addressed a number of concerns about Phoebe's planned lease of the former Palmyra facility in a guest editorial that appeared Sunday in The Albany Herald. He said Monday that Phoebe's $195 million purchase of Palmyra from Hospital Corporation of America was an attempt by Phoebe to stave off a Palmyra lawsuit that could have been catastrophic to the not-for-profit hospital.
"The lawsuit brought by Palmyra alleges that Phoebe tried to gain a monopoly of medical services by violating federal antitrust laws," Stubbs said. "The case was initially dismissed but was reinstated by an appeals court. That's when Phoebe started negotiating (with HCA) to buy Palmyra.
"Palmyra asked for $20 million in damages for 2001 (in the lawsuit). Imagine if those damages had gone through 2008, and then the damages potentially tripled (as stipulated by antitrust law). That's why an entity (Palmyra) whose worth is estimated at around $55 million to $65 million was worth $195 million to Phoebe. It's mind-boggling to think the Hospital Authority would allow this. The way we refer to it is that a lot of people here drink the Phoebe Kool-Aid."
Tommy Chambless, the senior vice president/general counsel for Phoebe Putney Health Systems Inc., said the Hospital Authority has ample reason to lease the former Palmyra property to Phoebe rather than consider selling it or leasing it to another entity, as STOP members are suggesting.
"I think the Hospital Authority has every right to be pleased with the accomplishments of its lessee (Phoebe)," Chambless said. "To say that the increase in value (of Phoebe) since 1990 should not be a consideration (to leasing the property) flies in the face of what is expected of the Authority. It's just nuts."
Chambless said the Hospital Authority has three requirements under Georgia law that will be met at Thursday's public hearing, which will be held in Room 100 of the City-County Government Building downtown.
"The (reasonably foreseeable) adverse and beneficial effects of the lease will be discussed," he said. "A financial statement and estimated total value of the assets and liabilities to be transferred will be given, and resumes of the top five executives who will manage the facility will be provided.
"It will be show-and-tell time, and we will provide all the information required by state law. It's pretty simple: The Hospital Authority became owner of the new property (Palmyra) on Dec. 15 of last year. Because the Hospital Authority -- and by association, the people of the county -- is now the owner of the new property, it intends to lease it to Phobe Putney Memorial Hospital subject to state law."
Independent insurance broker David Prisant argues health care cost increases have already begun.
"Whether Phoebe wants to admit it or not, health care costs at the hospital have gone through the roof over the last two years," he said. "Clients are contacting me to ask about astronomical bills, which, oddly enough, when they ask to get an itemized account almost 99 percent of the time come down significantly."
Prisant offered examples that he said he had seen in recent months:
-- A woman whose breast biopsy would have cost $400 at her physician's office ballooned to $12,000 when the physician decided a radiologist at Phoebe would be better equipped to do the procedure because of its location;
-- A man who discovered his blood disorder that required monthly infusions that cost $4,000 in Birmingham, Ala., could be done at Phoebe, but at a cost of $20,000.
-- Cost for vaginal delivery of a baby at a non-Phoebe-owned area hospital increased from $4,450 to $8,000 at the Albany-based hospital.
"They're nailing this community," Prisant said. "About 25 percent of the people in one of the poorest areas of the nation have health insurance, and the other 75 percent have Medicare, Medicaid or nothing. And yet Phoebe still has $30 million laying around to build some new structure? How do they make this money? By maximized billing of those of us with insurance."
Gebhardt said the STOP group wants the Hospital Authority to look out for the best interest of the community and to consider selling or leasing the former Palmyra campus that it now owns to another hospital or medical management firm.
"We just want them to listen to the community," he said. "Health care costs here are already too high, and with this monopoly in place they will go higher. Sadly, I know many people fear -- and it has been demonstrated often -- that it's dangerous to oppose the will of (Phoebe officials). That's why so many people are reluctant to come forward and speak out.
"But if the people will attend this meeting, I think the Hospital Authority members will listen. I think it's the right thing to do, and one of the most important things I've learned in my life is that if you do things right, they usually work out."