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BY MATTHEW VAN DUSEN
mvandusen@nwitimes.com
219.462.5151 | Sunday, July 24, 2005 | (No comments posted.)
Can counties protect their hospitals by preventing other health care firms from moving in?
Sure.
Is it legal?
Maybe, but if the trend holds, the county will probably get sued for approving such an ordinance.
So the real question is, who wants to pay to defend the ordinance in court?
Counties around the nation, and at least three in Indiana, have adopted ordinances that prevent health care businesses from building new facilities for one year. The general idea is to protect public hospitals from private firms that siphon off profitable services, such as imaging, cardiac care and orthopedics, that hospitals need to support unprofitable services, like maternity care.
At the end of June, officials at county-owned Porter hospital asked the Porter County commissioners to approve a one-year moratorium on outpatient surgical centers, imaging centers and specialty hospitals.
But County Attorney Gwenn Rinkenberger has found two federal lawsuits filed in the last two months against three Indiana counties that adopted the ordinances. The lawsuits claim the counties are conspiring with local hospitals to crush competition and contend counties don't have the power to regulate health care businesses.
Kentuckiana Medical Center LLC, is suing Clark and Floyd counties for preventing it from building several acute-care hospitals. Sisters of St. Francis Health Services is suing Morgan County for stopping them from expanding existing facilities.
The court will have to decide what a county is allowed to do to keep its hospital in business.
Proponents of the moratorium say it is allowed under the state's home rule statute, which says local governments can make any law that is not forbidden and may regulate what is not already regulated.
But lawsuits against the counties say the moratorium gives the counties the power to regulate hospitals, a power that actually belongs to the State Department of Health.
"To me it sounds like a chicken and egg problem," said Cynthia Baker, the director of the Program on Law and State Government at the Indiana University law school in Indianapolis. "The State Department of Health can't license something as a hospital if it isn't built."
The two lawsuits also say that the counties have illegally prevented competition, a thought that troubled Stephen Bush, a Floyd County commissioner who voted against the ordinance.
"I opposed it, saying competition is good," said Bush. "Why send people over the river (to Kentucky)."
Bush believes that new hospitals will provide a tax base for the county and give citizens more options for their health care.
On the other hand, Porter hospital board Chairman John Rhame has argued that private hospitals and health-care boutiques generally are not concerned with treating the poor or indigent or providing unprofitable, but necessary, services.
He said the lawsuits do not affect his decision to push for the moratorium.
Commissioner Bob Harper said he has to consider the lawsuits before making a decision.
If the commissioners are going to get sued for approving the ordinance, they probably won't go for it.
"If I was a betting woman, that would be my bet," Rinkenberger said.
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