Investors scrubbed plans for a 40-bed heart hospital in New Albany, Ind., officially because of increased land costs. But at the same time, concerns were being raised about whether the hospital would be exempted from an 18-month federal ban on physician investment in new specialty hospitals. Investors in the $11 million Kentuckiana Heart Hospital said owners wanted too high a price to renew options for purchasing land. But the for-profit hospital, opposed by not-for-profit facilities in Indiana and nearby Louisville, Ky., also faced questions over whether it had won final zoning board approval by Nov. 18, 2003, the deadline for an exemption from the moratorium. The Louisville cardiologist who heads the investor group did not return calls seeking comment. Mike Laville, an attorney for developer Cardiovascular Hospitals of America, said the uncertain nature of the exemptions probably played a role. "From a business standpoint, this moratorium deal is iffy enough," he said. "What you're doing is plopping down a lot of money for property not knowing whether the moratorium is going to hold up."
Meanwhile, MedCath Corp., Charlotte, N.C., said it had completed a period of rapid development with the opening of its 13th cardiac-care hospital, 32-bed Heart Hospital of Lafayette (La.). The hospital is MedCath's second in Louisiana and its fifth opening in 18 months. The accelerated development period was part of a long-standing strategic plan, MedCath said. The company blamed hospital startup costs, as well as rising bad debt and supply expenses, for a net loss of $933,00 in its fiscal 2004 first quarter, ended Dec. 31, 2003. It has said it may divest hospitals that don't meet its financial or growth objectives. -- by Michael Romano and Julie Piotrowski