The Virgin Islands are an American paradise. Their gorgeous beaches, sparkling Caribbean waters, colorful coral reefs and annual-average 80-degree temperatures draw more than one million tourists each year to the three main islands of St. Thomas, St. John and St. Croix and some 50-odd islets just east of Puerto Rico.
"This is one of the best places in the world to sit back and enjoy yourself," says Houston native Rodney Miller, chief executive officer of Roy Lester Schneider Hospital on St. Thomas. Alas, for Miller, running the only hospital on the island is "basically like running healthcare for an entire country."
"You're interacting with the governor, lieutenant governor, senators. You're being called up for hearings. You're out all the time. It's not vacation work at all."
Recently, there's been even more trouble in Miller's paradise.
Since last December, the CEO and several physician executives at Schneider Hospital have been battling against nine physician investors who filed for a certificate of need to open an ambulatory surgery center, or ASC, on St. Thomas at a site across the street from the 189-bed, not-for-profit hospital.
Their proposed St. Thomas Ambulatory Surgery Center would have two operating rooms and a procedure room and cost $3.5 million, says ophthalmologist Byron Biscoe, M.D., managing partner of the group. "It's an all-out war, and it's really ugly."
Miller and other Schneider Hospital officials have voiced their opposition to the ASC in the newspaper, on local radio and TV talk shows and before various civic groups.
On March 6, Miller, with the support of four physician hospital leaders, testified against the ASC project at a televised public hearing before a health committee of the 15-member Virgin Islands Senate, the territory's unicameral legislature. The senators have no official role in the CON decision, but "We felt it was something they needed to know and would have an adverse effect on our ability to deliver quality care to the people," Miller says. "You've got an ASC today, you've got a private hospital tomorrow."
David Bornn, a local lawyer for the physician investors, says the controversy has drawn the attention and involvement of the American Hospital Association, which gave the islanders leave to use a newspaper advertisement campaign that the AHA developed in its fight against specialty hospital development across the U.S.
Officially, the matter is now before the new Virgin Islands health commissioner, Darlene Carty, who has ultimate authority over the CON process. Biscoe says he filed on April 5 the final answers to a third round of questions from Carty. If the application is deemed complete, Carty, by law, must rule on the CON request within 90 days, Biscoe says. The facility would take two years to build, he says.
Adding spice to the mix, six of the physician investors in the proposed surgery center are Schneider Hospital employees. They are paid an upper-five-figure stipend and have their health insurance and half their medical malpractice insurance paid by the hospital, but they also have private practices, Miller says.
Miller has publicly vowed to fire all six hospital-employed doctors if their ASC goes through, although none of the nine physician investors will have their hospital privileges revoked, Miller says.
"Economic credentialing wouldn't work here because there's only one hospital," Miller says. "I don't want to hurt these guys' chances to make a living; but employment, that's different."
Thus, the battle on tiny St. Thomas is a microcosm of the controversies troubling the U.S. mainland, pitting administrators of established hospitals--defending what they describe as their mission of service to the community--against physician entrepreneurs seeking to develop and own innovative, competing surgical facilities they say are more efficient and will better serve the community's patients.
Miller says 24% of Virgin Islands residents are uninsured and 30% of the hospital's patient mix is self-pay. He projects the hospital, which lost $3 million last year on $80 million in gross revenue, would take a $2.8 million hit if the ASC is built. Its five operating rooms are running at about 50% capacity, he says.
At 32 square miles, St. Thomas is not as big as a typical Midwestern township and, with 51,181 residents, would not populate an average Indiana county. Combined, all of the Virgin Islands have a population of just 108,618, according to the 2000 census.
So the same arguments attendant to fights between mainland hospitals and physician competitors--of cherry-picking patients and threatening the source of cost-shifted profits that offset undercompensated community care--have even greater weight, since St. Thomas is surrounded by the Caribbean Sea.
Schneider Hospital Medical Director Thelma Watson, M.D., a Virgin Islands native and graduate of Jefferson Medical College in Philadelphia, is board-certified in internal and emergency medicine. She testified before the island Senate committee last month that the for-profit ASC would siphon away insured patients, "leaving the hospital to provide services to the indigent, uninsured and Medicaid population."
"A reduction in the profit from ambulatory surgeries will reduce the hospital's ability to provide critical healthcare services that are less or not profitable," Watson said in her testimony. "This would, in effect, create a two-tier structure in the Virgin Islands, one for those who can pay and one for those who cannot."
Three of the physician partners in the ASC project are anesthesiologists. The others are an oral surgeon, a maxillofacial surgeon, an otolaryngologist, an orthopedic surgeon, an ophthalmologist and an OB/GYN. Bornn blames the hospital for not communicating with the doctors and for ratcheting up the controversy.
Bornn describes one public relations tactic by the hospital as "a barrage of full-page ads."
"The first was a giveaway," Bornn says. "It was not an attack on the ASC. It was about what the AHA was doing across the country (saying) call your senator about the Medicare bill (which included a moratorium on Medicare payments to new, physician-owned specialty hospitals).
"Then it switched gears and began attacking the ASC directly," Bornn says. The subsequent ads didn't bear the AHA name, he says, "but it was the same format." The ASC opponents ran at least 10 full-page ads, Bornn says.
AHA spokesman Richard Wade says Schneider Hospital officials saw the AHA ads attacking niche providers and asked if they could use them in their campaign against the surgery center plan because the legislation against specialty hospitals the AHA supported covered some of the same issues.
"We did not buy any ads down there at any time," Wade says.
Bornn says there is a clear need in the community for an outpatient-services facility. He says the Schneider Hospital operating rooms are running at half capacity only when a 24/7 schedule is used to make that calculation. In reality, he says, the hospital has a limited staff, has a set surgical schedule of 8 a.m. to 3 p.m. Monday through Friday and is loath to pay nurses and staff overtime to go beyond that schedule.
On St. Thomas, "Much of the outpatient surgery is done in doctors' offices or within the limited time frame available in the ORs in the hospital.
"There's not enough time between 8 (a.m.) and 3 (p.m.) to schedule major surgery cases and outpatient surgery," Bornn says. "The outpatient procedures get routinely bumped." Bornn says the limited availability of staff and OR slots puts a crimp in the ASC physicians' business plan to grow the healthcare pie on St. Thomas by attracting healthcare tourists, people from the U.S. mainland and elsewhere off-island who will come for surgery and stay to recuperate.
A clinic specializing in plastic surgery in the neighboring British Virgin Islands attracts a global clientele, Bornn says, and is an example of the ASC doctors' mainland marketing plan in action. "We're not saying it's a 10-mile radius or a 100-mile radius," he says. "It's the entire Caribbean and essentially everywhere in America."
But to do it, the physicians will need a surgery center, according to Bornn, who recalls that a physician had scheduled what could have been an outpatient procedure at the hospital for a healthcare tourist, only to have the patient's OR slot commandeered for an emergency surgery. That wasn't a problem, but the two-week wait before another next surgery slot became available most certainly was, Bornn says. "They don't have the staff to run any more than four (ORs), and they're operating at 100% capacity," Biscoe says. "Right now, we're paying overtime nearly every day to finish elective procedures."
"The hospital has pitched it as a battle for its existence, as if you take one penny out of the hospital it will destroy the hospital," Bornn says. "In point of fact, they would be able to do more surgeries the doctors will be able to bring to the island. We will grow the pie, for sure."
There is also a question of patient choice, Bornn says. On neighboring Puerto Rico, a hospital system has opened a new inpatient and outpatient facility that aims to attract patients from the Virgin Islands, he says. "The only choice that people have now is to go off-island and, lo and behold, that's exactly what people would do."
Miller agrees that "our major competition is Puerto Rico. They've got 70 hospitals. We're only 20 minutes away by jet."
He says a cooperative effort with the nine ASC backers might have been possible if the physicians had approached the hospital with a plan before the conflict began.
"Now they want a joint venture, but they've take every opportunity to joint venture away," Miller says. "It's not that there's too much bad blood--there's that, too--but we feel there is no need."