It's the Baptists vs. the Methodists in an old-fashioned certificate-of-need battle to provide acute-care hospital services to the growing population in southeast suburban Memphis, Tenn.
The Baptists won round one of the fight, helping scotch a plan by the Methodists to double the size of their operation in that market.
But the Methodists bounced back with a revamped plan to counter the Baptists' own expansion strategy.
The outcome now rests with the Tennessee Health Facilities Commission, which is scheduled to rule on the competing CON applications at a March 27 public hearing. The state could approve both, deny both or approve one or the other. However, because the state consolidated the applications at one public hearing, it likely views them as competing expansion plans and will approve only one application.
The battleground consists of two cities immediately southeast of Memphis: Germantown and Collierville. Germantown has a population of 38,000, and its city limits border those of Memphis. Some 15 miles southeast of Memphis, on the other side of Germantown, is Collierville, a town of 25,000.
The populations of each locale and the surrounding area are expected to rise dramatically over the next 10 years.
And Baptist Memorial Health Care System and Methodist Health Systems, Memphis' two dominant not-for-profit players, want a piece of that action.
Baptist wants to build a 60-bed satellite hospital in Collierville for $38 million. Methodist wants to beef up its existing 120-bed hospital in Germantown through a $16.9 million expansion and renovation project. Both claim their projects are needed to meet the growing demand for healthcare in the southeast Memphis suburbs.
Baptist's planned satellite hospital would be the hub of a new medical campus, said Robert Gordon, Baptist executive vice president. The system intends to add a medical office complex and an outpatient-care facility to the 97-acre campus, he said.
The glue that holds Baptist's plans together is the argument that Collierville is a distinct market from both Germantown and Memphis. And, given the city's expected population growth, that market needs its own hospital.
Ironically, the argument is the reverse of one merging hospitals often use to gain antitrust clearance. In antitrust cases, hospitals almost always argue that they compete in a broad geographic market consisting of many hospitals. But in CON cases they take the opposite approach.
"Germantown and Collierville are separate municipalities," Gordon emphasized. "The facility in Germantown is excellent, and we understand their desire to serve that community. But our intent is to serve the additional healthcare needs of the other town."
That's the reason Baptist opposed Methodist's original expansion and renovation plans at its Germantown site, Baptist executives maintain. Methodist's original CON application mistakenly considered Germantown and Collierville to be the same market, they say.
Last July, Methodist filed a CON application for state approval to launch a $29.5 million, 141,000-square-foot expansion and renovation project-a project more than 50% bigger than its current plan. The Tennessee Health Facilities Commission denied the application last October, and Methodist has appealed the decision.
"I think the price tag and the fact that the project was so broad made the state a little nervous," said Cameron Welton, administrator at Methodist.
Methodist filed its CON application for the downscaled project last Dec. 13. Two days later, Baptist filed its CON.
Methodist, though, says it won't retaliate for Baptist's early opposition and won't fight Baptist's CON application.
"I don't see us as having competing CONs," Welton said. "We just want to make sure we have the services in place based on the demographics. Our CON covers our existing needs and our needs in the short-term future."
Last year, Le Bonheur Children's Medical Center in Memphis merged with Methodist Health System, and the focus of the revised Germantown expansion and renovation plans will be on pediatric services. For example, the plans call for the Germantown site to convert 13 adult medical/surgical beds to seven obstetrics postpartum beds and six pediatric beds.
Neither Gordon at Baptist nor Welton at Methodist would speculate on the chances of the systems' respective CON applications passing muster with the state.
"I think we've presented a good case," Welton said. "We'll find out on March 27."