Tenet Healthcare Corp., while painting itself as not-for-profit friendly, isn't above using hospital ownership status as a competitive weapon in local markets.
The Santa Barbara, Calif.-based hospital chain is using its for-profit ownership to tout its expansion plans near Hilton Head, S.C., while criticizing competing expansion plans by a local not-for-profit competitor.
The company's actions run counter to its stated effort to sooth the ownership wounds opened wide by Tenet's primary competitor, Columbia/HCA Healthcare Corp. Nashville-based Columbia, which has drawn fire for its aggressive business strategies, often attacked the community commitment of not-for-profits as it tried to acquire hospitals and win contracts from employers and payers.
After Columbia ran into trouble, Tenet began a campaign in July to "bridge the gap" between for-profits and not-for-profits, in the words of Tenet Chairman and Chief Executive Officer Jeffrey Barbakow.
First, Tenet joined the American Hospital Association to put itself "side by side" with not-for-profit hospitals. Then, its communications department began disseminating a rousing internal speech by Barbakow in which he reaches out to the not-for-profit sector. Shortly after, Tenet announced a joint venture with a not-for-profit hospital system in Alabama (Aug. 18, p. 18).
But the message apparently didn't reach the coastal region of South Carolina, where Tenet's Hilton Head Medical Center is battling not-for-profit Broad River Healthcare.
Tenet spokesman Lance Ignon said having a perfect relationship with not-for-profits in every community would be too ambitious and that the situation in South Carolina is a very rare instance of animosity.
"I don't think you can expect. . . to have (Barbakow's) model work every time," Ignon said.
Broad River, based in Beaufort, S.C., is the not-for-profit management company that runs two county hospitals: 126-bed Beaufort Memorial Hospital and 31-bed Low Country General Hospital in Ridgeland, S.C.
Broad River wants to build a 31-bed replacement hospital for 30-year-old Low Country General in Hardeeville, S.C., about 19 miles from Hilton Head Medical in Jasper County. Hilton Head Medical, meanwhile, wants to build an 18,700-square-foot outpatient-care center in Okatie, near Hardeeville and the site of Sun City, a new retirement community.
Both organizations have filed certificate-of-need applications with the South Carolina Department of Health and Environmental Control for their projects (See chart). The projects are about four miles apart and serve the same market. Consequently, the state likely would approve only one CON application or deny both.
The department is scheduled to hold a public hearing Sept. 8 on the competing applications. It will have 60 days after that to decide.
Consquently, each organization has undertaken public relations campaigns to convince local residents and the state that its particular project would better serve the community.
As the matter heads into its final weeks, the campaigns have become particularly nasty, with Tenet engaging in an activity previously associated with Columbia.
Specifically, Tenet's hospital has attacked the not-for-profit ownership status of Broad River and Low Country General while touting its own private for-profit status.
In one newspaper advertisement, Tenet said: "The fact is, because Hilton Head Medical Center is privately owned, it is not a drain on our scarce tax dollars. . . . Low Country General has not disclosed the exact manner in which it plans to finance the replacement hospital. . . . Questions over cost and financing are especially important to Beaufort County taxpayers, because they could bear the ultimate responsibility if the county's healthcare venture in Jasper County fails."
Tenet's hospital also has filed a lawsuit against Broad River and Low Country General, demanding public disclosure of how they intend to pay for the $16 million replacement hospital.
Hilton Head Medical filed the lawsuit on Aug. 28 in Beaufort County (S.C.) Court of Common Pleas. It says Broad River and Low Country are required under the state's Freedom of Information Act to disclose the financial details of the proposed building projects because Low Country is a county hospital.
Broad River and Low Country "because of their acceptance of large sums of public monies must conduct themselves as public bodies," and their "financial dealings are not exempt from public disclosure," said Hilton Head Medical in a statement.
Broad River has said it would float revenue bonds to finance the replacement hospital.
In the statement and in its ads, the Tenet hospital portrays itself as a good corporate citizen, paying more than $1.6 million annually in property taxes and business license fees.
Broad River isn't above the fray, either.
In its public relations campaign, Broad River has attempted to portray Hilton Head Medical as an expensive, exclusive hospital run by out-of-town operators.
David Brown, chief executive officer of Broad River and chairman of Low Country, said the system has spent less than $25,000 on its ads. Hilton Head Medical's president, Dennis Bruns, wouldn't reveal how much his hospital is spending.
Bruns said Hilton Head Medical had a tentative verbal agreement to build the outpatient-care complex in a joint venture with Broad River. That failed because the not-for-profit system wanted equal responsibility in managing the facility.
Bruns said sharing management would be counterproductive for Hilton Head Medical because it had both buying power and management expertise on its own and the facility would be in its backyard.
