hospital merger

[armand larive <larive@completebbs.com>]

Some financial considerations standing in the way of a hospital merger:

A large influence trying to keep Pullman and Moscow hospitals separate
and where they are has to do with medical office buildings.  Moscow
Family Medicine, whose senior partners own the office building next to
Gritman, have nearly paid off a rather steep mortgage on their
building.  Pullman Memorial and a few doctors hold the mortgage on the
new medical office building (“Palouse Millenium”) on Bishop Blvd in
Pullman.  This building was erected with the hope that it would be one
anchor of “Pullman Care Community,” consisting of a new hospital, a
nursing home, extended care, and a new hospital, anchored on the other
end by “Summit Therapy.”  This is a dream under discussion, but not
realized without support from the hospital’s tax district.

Medical office buildings are almost always located next to hospitals for
convenience of making rounds.  There’s at least one fee to collect from
daily rounds, but it may be necessary (nevermind the fee) for a doctor
to visit hospitalized patients several times a day.  Walking across the
street, rather than driving several miles, makes a doctor’s job much
easier.    Even more crucial than convenience is the loss of value a
medical office building has if 1) the hospital never locates next to the
office building, or 2) moves away.  The Palouse Millenium building isn’t
exactly “high and dry,” but it is at some distance from Pullman
Memorial, and Moscow Family Medicine’s building would likely be replaced
at a nearer future date if a hospital were located somewhere between our
two cities.  Not surprising, then, that letters from physicians in
Moscow came out about this time last year, quickly indicating support
for Gritman’s refusal to enter into merger talks.  Also not surprising
that Pullman family practice physicians thumped hard at the last
hospital levy proposal in Pullman.

The issue of medical office buildings and their location is especially
important to primary care physicians, not to specialists.  And it is
primary care physicians who hold the mortgages.  To make a living in our
area, many specialists have to maintain several offices in different
communities, or at least see patients in both hospitals.   Ironically,
it’s mostly the work of specialists who make up the lion’s share of
profit for hospitals.  About 40% of Gritman's income is "procedural;”
i.e., done by specialists, mostly surgery.  So Moscow Family Medicine
not only does not provide substantial income for Gritman, but even sends
its lab work to Lewiston instead of Gritman.

 Primary care physicians have considerable control over specialists
because specialists depend on referrals from the primary care people.
For a while, it looked as though the hospital merger issue would be
forced by surgeons establishing a new out-patient surgery center
somewhere between Pullman and Moscow.  Such a move would quickly and
drastically suck all the oxygen out of both hospital’s viability, but
this was reigned in by primary care doctors through their power to
refer.

So there’s an argument to be made that the mortgage-holding primary
doctors have made sacrifices in income for a considerable time in order
to pay off office buildings, and don’t want to see their investment
diminish.  Specialists don’t share this concern, so there’s a division
that will not only impede hospital merger, but make both communities
less attractive to specialists in the future.       ….Armand Larive.