There's a storm brewing in Florida's Panhandle, and it's not a hurricane.
The weather systems in this certificate-of-need fight are Columbia/HCA Healthcare Corp., the nation's largest for-profit hospital chain, and Ascension Health, the nation's largest private not-for-profit hospital company.
Two Columbia hospitals there have challenged the state's approval of plans by Sacred Heart Health System, a Pensacola, Fla.-based division of Roman Catholic Ascension Health, to build a new $39 million, 50-bed hospital in Santa Rosa Beach, Fla.
Santa Rosa Beach is in Walton County, which is adjacent to Okaloosa County, where the two Columbia hospitals operate. They are 75-bed Twin Cities Hospital in Niceville and 247-bed Fort Walton Beach (Fla.) Medical Center.
Santa Rosa Beach also is about 20 miles east of Destin, Fla., in Okaloosa County, where Columbia closed a 50-bed hospital in 1994 (Oct. 30, 1995, p. 82).
The Columbia hospitals contend that another hospital in the market will needlessly duplicate services.
But residents of Destin and the surrounding area haven't forgotten what Columbia did in 1994, and they want their own hospital.
The Walton County Chamber of Commerce is leading a petition drive and a purple ribbon campaign to persuade Columbia to back off its challenge.
"We need a hospital," said Pam Tedesco, executive director of the chamber. Tedesco said it is crucial there be a hospital on the strip of south Walton County, which is separated from the mainland by Choctawhatchee Bay.
Otherwise, when there's bad weather, tourist traffic or a bad accident on connecting bridges, getting to a hospital on the mainland can take more than an hour, Tedesco said.
Walton County has one hospital, 34-bed Healthmark Regional Medical Center in De Funiak Springs, about 30 miles away in the northern part of the county.
In January, both Columbia hospitals filed a petition for administrative hearing to contest the decision last December by Florida's Agency for Health Care Administration to grant Sacred Heart CON approval for the new hospital.
"Based on the current occupancy rates, we know it will have an impact on all the hospitals existing (in the area)," said Yvonne Freeman, director of business development for the two Columbia hospitals.
Freeman said Columbia's Fort Walton hospital has an annual occupancy rate of 63%, while the occupancy rate at Twin Cities is much lower at 43%.
She said Columbia tried to respond to the community's needs by opening a 24-hour urgent-care center in June 1999 at the site of the former Destin hospital.
Freeman pointed out that though the state approved Sacred Heart's new hospital, the previous June it denied a CON request from Columbia's Niceville hospital to convert 10 skilled-nursing beds to acute-care beds.
"We're wondering why the state denied our request to convert 10 beds that already exist and then approved a 50-bed hospital," Freeman said.
However, the state did agree to let Fort Walton Beach Medical Center convert 18 skilled-nursing beds to acute-care services.
Coincidentally, Scott Hopes, the bureau chief of the CON division when Sacred Heart's CON application was being considered, had previously been involved with Destin Hospital and Columbia. Hopes had been a consultant and lost $381,000 when a deal to buy the hospital from Columbia fell through.
Freeman said Columbia was aware that Hopes was working in the CON division but didn't raise the issue of a potential conflict of interest.
For his part, Hopes said state officials knew about his former dealings with Columbia and "there wasn't any perceived conflict." Hopes recently moved out of the CON division to become director of the office of health policy at the state Agency for Health Care Administration.
Hopes said his previous dealings with Columbia had no impact on how the agency decided this case. He said a reviewer checked the CON application and submitted it to a supervisor, who made a recommendation before sending it to Hopes for final approval.
"I wasn't involved in the review, didn't make any recommendation," Hopes said. "It was an agency decision."
The agency's report approving Sacred Heart's CON said the system "demonstrated an access problem to care, particularly emergency services," although current occupancy doesn't indicate a need for more beds in the area.
A spokesman for the state agency said a hearing on Columbia's challenge to the Sacred Heart hospital is tentatively scheduled for this summer.
Peter Heckathorn, senior vice president at Sacred Heart, said, "Columbia could, at any point in time, have tried to reopen their closed facility (in Destin). They knew we were coming. It wasn't a secret."