A community controversy is brewing in Kirksville, Mo., where one of the city's two hospitals is negotiating to assume the lease of the second hospital.
"The facility that wants to buy us is physician-owned," said an employee at the targeted hospital. "That's created a lot of concerns."
The employee, who didn't want to be identified, said the concerns center around giving control of both facilities to the same physicians who also control hospital admissions and who would set prices for all hospital services.
"They (the physicians) said they need to do this to keep managed-care plans out of the market," the employee said.
The concerns are magnified by the fact that the closest hospitals with comparable services to those in Kirksville are 90 miles south in Columbia, Mo., the employee said.
The players in this unfolding community drama are 119-bed Kirksville Osteopathic Medical Center and 75-bed Grim-Smith Hospital and Clinic, also located in Kirksville, a town of 17,000 in northeastern Missouri.
Both hospitals are for-profit. A group of about 35 physicians owns Grim-Smith. The Kirksville College of Osteopathic Medicine, the nation's oldest osteopathic medical school, owns Kirksville Osteopathic. The college leases the hospital to Tenet Healthcare Corp., a Santa Barbara, Calif.-based for-profit hospital chain.
According to two sources at Kirksville Osteopathic, the physician owners of Grim-Smith are negotiating with the college to purchase the lease agreement with Tenet. The sources said a deal among the parties is imminent.
Chuck Boughton, senior vice president at Grim-Smith, confirmed that a deal is in the making.
"Discussions are in progress to create a regional referral center in Kirksville, which is geographically isolated," Boughton said. "We'll be sharing more information when we can."
A spokeswoman for the college said she couldn't confirm or deny lease negotiations between the college and Grim-Smith.
Joan Galvan, a Tenet spokeswoman, said, "Our corporate policy is not to comment on rumors."
However, one source said that while nothing had been signed, the parties were negotiating a letter of intent. "If that happens, Kirksville will become a one-hospital town. People will have to travel to Columbia for the same services," the source said.
At least three hospitals are located within 30 miles of Kirksville, but all operate fewer than 50 beds, according to data from the Kirksville Chamber of Commerce and the American Hospital Association.