A closely watched proposal regarding a three-bed hospital in Washington cleared its only major hurdle Monday, possibly paving the way for similar facilities in other parts of the state.
Patients First Community Hospital, a nonprofit established by Patients First Health Care, was told Monday that it wouldn't be required to get a Certificate of Need to build its facility here.
Certificates of Need are awarded through the Missouri Certificate of Need Program, or CONP.
The program "is intended, through planning, review and support activities, to assist in the development of a statewide health care service strategy through the application of the CONP statutes," according to the Official Manual of the State of Missouri.
The program is adminstered by the Missouri Health Facilities Review Committee, a nine-member board which ruled on the Patients First application this week.
In a 4-3 vote, with one member absent and one member abstaining, the committee said Patients First wouldn't be required to get a Certificate of Need.
The process was instead a nonapplicability review, which stated that because proposed expenditures were less than $1 million, the project doesn't need a CON.
Members voting in favor were James Tellatin, Dr. Martin Vollmar, Sen. Robin Wright-Jones and Rep. Kenny Jones.
Against the measure were Rory Ellinger, Dr. Edna Talboy and Rep. Jake Zimmerman.
William Krodinger was absent. Sen. Eric Schmitt abstained.
The motion voted on was to exempt the Patients First project from the CON requirement.
Tom Piper, director of the Missouri CON Program, said the motion didn't make mention of the most hotly contested part of the more than three-hour debate, however.
"Technically, the ruling is not a waiver," Piper explained. "It's a great sound bite, but CONs don't have a statutory waiver per se."
Impact in Missouri
Piper said the move doesn't open the floodgate to other doctors' groups looking to open their own facilities, however.
"Any other proposal would still have to go through this process (of obtaining nonapplicability status)," he said.
"The precedent it does set is that we've never, in the history of our program, had a hospital built for less than $1 million," Piper said.
Opponents said the project couldn't be done for $1 million, however, and that estimates from Patients First didn't include the complete costs.
"St. John's had a number of accountants and appraisers who came forward to question the cost and inclusion of additional costs," Piper said.
PARIC Corporation gave Patients First a $815,000 guaranteed contract for the facility.
Other costs include $98,750 for architectural and engineering fees, $15,000 for legal fees and $25,000 for the property.
The property, 5,000 square feet, was appraised at $5 per square foot by the county assessor's office.
The proposed expenditures, including equipment, would total $953,750, according to the proposal from Patients First.
Piper said the proposal didn't include the costs for property for sidewalks and parking, however.
"I made a presentation to the board and my observations were that the expense information was incomplete because it goes beyond construction of a new building," he said. "There are driveways, sidewalks and other areas for which the cost of land wasn't included."
The proposed building will be 4,330 square feet won't have any emergency or interventional procedure rooms or major medical equipment on site, according to Patients First's letter of intent.
Plans for the facility have been reviewed by the Missouri Department of Health and Senior Services.
Additions to the facility in the future wouldn't have to go through the review committee, Piper noted.
"As long as they don't spend over $1 million on a single piece of equipment, it doesn't have to be reviewed," he said.
Mercy's Reaction
Terri McLain, St. John's Mercy Hospital president, voiced her opposition to the committee's ruling Tuesday.
"It's unfortunate that the standards for licensing new hospitals in Missouri contain a loophole that permits a three-bed hospital to forego CON review," she said.
"The CON process exists to evaluate the need for health care facilities and we believe all new hospitals should undergo a full CON review," McLain said. "There is no need for another hospital in our community."
Piper said there is a known surplus of beds in the St. Louis area.
"There is a surplus, but that isn't to say there isn't a specific need for a hospital in that location," he said.
"Overbuilding of hospitals has been shown to drive up health care costs and physician-owned hospitals in particular have been shown to drive overutilization of health care services," McLain said.
"This is why the recently passed health care reform law limits physician-owned hospitals and why the American Hospital Association wants to ban physicians from referring patients to their own hospitals," she said.
"Personally, a hospital with three beds and one room for emergencies doesn't have the kind of resources that I would want for my family," McLain added. "I would be worried about the ability of a three-bed hospital to truly provide high-quality, safe care.
"Regardless of this decision, St. John's Mercy Hospital will continue to offer the breadth and depth of care that a full-service hospital should provide, including the only Level III trauma center in Franklin County," she said.
St. John's in Washington operates 187 beds.
Phone messages to several Patients First communications officers were not returned before The Missourian went to press Friday.
Elizabeth Sedlock, chief marketing officer for Patients First, told The St. Louis Business Journal in April that construction is expected to start immediately once approval for the nonapplicability statement was received.
Dr. Michael Rau, chairmen of Patients First, told the Business Journal the facility "will essentially be an addition to our current 193,000-square-foot facility.
