A Georgia state Senate committee will meet in September to consider how far the state's 70 public hospitals can go toward restructuring into privately owned facilities to compete against Columbia/HCA Healthcare Corp. and more effectively negotiate with managed-care payers.
"We want to know what type of accountability there is for the public who financed the bonds to support the hospitals over the years," said state Sen. Steve Thompson (D-Powder Springs).
The five-member committee will review the state's open records and open meetings law, the movement of public hospitals to restructure into private hospitals and certificate-of-need reform.
Thompson introduced a bill earlier this year that would have given the public greater access to information on the operations of public hospitals. While the bill was defeated, the Senate approved a resolution giving Thompson a committee to look into public hospitals and competition. The committee is aiming to issue a report in December for the 1997 legislative session.
"We are concerned about the direction the committee may take," said Holly Bates Snow, a spokeswoman for the Georgia Hospital Association. "We will be working with the committee if there is a problem. We don't want legislation that will do more harm than good," she said.
To give public hospitals a greater ability to compete in larger geographic markets and to shield some records and meetings, the GHA supports modification of the state's Hospital Authority Act and the Open Records Act. The former limits the ability of public hospitals to compete in other counties and borrow money for expansion, while the latter requires open meetings (April 8, p. 13).
"Managed-care contract issues should be private," Snow said. "It doesn't make sense to make all records and meetings open to the public. These hospitals are competing for business. There should be a level playing field."
Over the past 10 years, more than 20 of the state's 70 public hospitals in Georgia have restructured into private, not-for-profit corporations to become more competitive, Snow said. There are 157 acute-care hospitals in Georgia.
But in Atlanta last year, a state Appeals Court ruled Promina Health System, a restructured public system, couldn't close meetings or refuse to provide documents to the public. Promina, however, continues to close meetings held for "personnel" or "strategic" reasons, said a spokesman for the Georgia Press Association.
Meanwhile, several other public systems have revised their policies that make it clear they are not subject to the open records and open meetings law, the press association spokesman said.
In Albany, Ga., the Albany Herald sued 418-bed Phoebe Putney Memorial Hospital over the restructured public hospital's refusal to comply with the state open records law. Phoebe Putney officials contend they are exempt from public disclosure.
Meanwhile, 606-bed Columbus (Ga.) Regional Medical Center filed suit against 248-bed Doctor's Hospital, a competing hospital owned by Columbia, over repeated requests by the for-profit hospital to gain access to its public records.
The suit was withdrawn after negotiations in which Doctor's Hospital agreed to stop making the open record requests, a Columbus Regional spokeswoman said.
Other controversies have arisen among some public hospitals over restructuring, expansion plans and conflict-of-interest laws.
In Dalton, Ga., 282-bed Hamilton Medical Center was sued by Whitfield County over its plan to purchase the assets of the hospital from the Dalton-Whitfield Hospital Authority, the hospital's parent body.
The lawsuit temporarily stopped Hamilton Medical's plans to borrow $47 million through a tax-exempt revenue anticipation bond to purchase the hospital, said Gary Howard, its senior vice president and chief financial officer.
"The (hospital) authority is reviewing eight other proposals," Howard said. "We think our bid is the best one for the community."
If Hamilton Medical is successful, $41 million of the bond issue would be used to pay off the hospital's debt; the remainder would be placed in a trust fund for indigent care at the hospital, Howard said. A decision is expected later this year, he said.
In Tifton, 181-bed Tift General Hospital filed a lawsuit against Phoebe Putney to stop it from gaining a foothold in Tift County by funding the purchase of 11-member Tifton Medical Clinic, said William Richardson, Tift General's administrator.
The lawsuit contends Phoebe Putney is prohibited from competing outside its county without the permission of the local hospital under the state's Hospital Authority Act.
In Rome, Ga., a grand jury has been called to look into charges of conflict of interest and inside dealing at 302-bed Floyd Medical Center, a restructured public hospital. Earlier this year, two trustees and the administrator of the public hospital resigned after the state attorney general filed civil lawsuits seeking their removal and restitution of public funds.
Attorney General Michael Bowers, however, dropped the restitution suit. A spokesman said a criminal investigation is continuing.
The suit and resignations sprang from a grand jury investigation last year into allegations that officials used their positions to win thousands of dollars of business with the hospital.
Meanwhile, Steve Lanier, Floyd County prosecutor, said he has concerns that restructured public hospitals are not behaving in the public interest.
"We are seeing a proliferation of not-for-profit hospitals created from public hospitals," Lanier said. "There is a real quagmire here between private enterprise and publicly owned hospitals."
Lanier, who has been county prosecutor for 17 years, said he has sent open records requests to more than 20 public hospitals that have restructured.
"We are trying to compare our situation here with other hospital authorities," he said. "We are hearing back from (the restructured public hospitals) that the open records law doesn't apply. There is a problem here we need to address."