A movement to rein in the dominance of Mission Hospital in Western North Carolina’s healthcare landscape has hit a critical juncture.

A legislative committee studying whether smaller hospitals are suffering from aggressive, monopoly-like tactics by Mission will unveil its recommendations this week. Based on a preliminary report, the committee will recommend new restrictions to help level the playing field for Mission’s competitors.

But, there is early indication the recommendations won’t garner the necessary support in the General Assembly.

To pass, it would need the support of heavy-hitter Sen. Tom Apodaca, R-Hendersonville, who chairs the Senate rules committee. Apodaca has told fellow legislators he won’t support it.

“The senator assured me it would be dead on arrival in the Senate,” said Rep. Ray Rapp, D-Mars Hill.

Without Apodaca’s backing, new restrictions on Mission have “zero” chance of passing, according to Sen. Jim Davis, R-Franklin, even though Davis himself personally supports them.

Another nail in the coffin: Sen. Martin Nesbitt, D-Asheville, doesn’t support new restrictions either. Between Apodaca and Nesbitt — the two senators who represent territory at the heart of the Mission Hospital debate — it’s unlikely senators from other parts of the state would feel strongly enough to go over their heads and push it through anyway.

Smaller hospitals and doctors in the region are fearful that Mission is exploiting monopoly-like power to gobble up market share, causing the slow-but-steady decline of smaller community hospitals by eroding their patient base.

But while Mission’s competitors lobbied for more restrictions, Mission was lobbying for fewer restrictions. It currently is subject to anti-trust oversight dating back to the merger of Asheville’s only two hospitals in the 1990s.

Mission claims those existing regulations handcuff its ability to navigate the rapidly changing dynamics of healthcare and should be lifted.

“It has been 16 years. There has to be a way of gracefully ending this,” said Ron Paulus, CEO of Mission.

The upshot, however: neither may get what they want. If lawmakers buck committee recommendations and decide to leave well enough alone, the status quo will stay in place.

“If it ain’t broke, don’t fix it,” Rapp said.

Rapp said the state shouldn’t do something that could hurt Mission’s role as a life-saving hospital in the region.

“The health and well-being of our citizens should be first and foremost,” Rapp said. “ We can’t put our premier health care institution in jeopardy.”

But, Davis said Mission’s unfair advantage is jeopardizing smaller hospitals.

“I just don’t want any hospital to be preyed upon by a large hospital,” Davis said.

Davis said the anti-trust oversight Mission is subject to was put in place for a reason.

“Whenever you endorse a monopoly, whatever government body blesses that, has an obligation to keep an eye on them,” Davis said.

Paulus said Mission has a critical responsibility in the region as the largest and only tertiary care institution. “I hope you don’t need us but I want to be here if you do,” Paulus said.

It’s doubly hard given the demographics: poorer, sicker, older and less insured.

“The issue is how do we care for the patients in our region when the demographics are so much worse,” Paulus said.

Mission wants to work collaboratively with all the hospitals and doctors in the region toward that goal rather than get bogged down in turf battles no one can afford to wage, Paulus said.

The state committee considering whether to strengthen or weakened the anti-trust regulations governing Mission released preliminary recommendations last month.

Among them: a buffer zone that would stop Mission from setting up certain types of clinics within 10 miles of an existing hospital and a cap on the percentage of doctors Mission can employ in a community.

In Haywood County, MedWest-Haywood hospital has been in a race with Mission to buyout private doctors’ practices and put physicians on the hospital’s payroll as in-house employees.

The trend of doctors working directly under a hospital instead of private practice is a national one, driven largely by economics. Doctors have been getting squeezed by declining insurance and Medicare reimbursements and see employment under a hospital as an easier route.

The fear, however, is that whichever hospital employs doctors can control where they send their patients.

“If Mission buys a practice, the default for that practice would be to send those patients to Mission Hospital, and I am concerned about how all these little hospitals in the western part of the state will survive if that happens,” Davis said. “I don’t think anyone wants our community hospitals to become emergency clinics that feed to Mission Hospital.”

Paulus countered that Mission would not dictate which hospital a doctor should admit and refer patients to.

Nonetheless, Mission’s competitors would like to see limits on how many doctors it can employ in surrounding counties. Currently, Mission’s anti-trust regulations cap the number of doctors it can directly employ in Buncombe County to 30 percent, but there are no caps for other counties.

Fishing for physicians

Mission has come under fire for courting physicians in Haywood County. Mission has also set up a competing medical office complex in Haywood.

But, Paulus said Mission’s motives in extending employment offers to Haywood doctors are not sinister.

“The goal is not to have a single monolithic hospital in the middle of Asheville,” Paulus said, adding “it would never work, parking is terrible.”

Paulus said WNC has historically not been able to recruit enough doctors to serve the population.

“The ratio of doctors to population is well below the state and national average,” Paulus said.

Their salaries here are lower because of the higher number of  poor, uninsured patients. By employing doctors, hospitals essentially subsidize their practices to get them to stay here.

Mission simply wants to ensure a stable of doctors for the region, he said.

“Our core concern is the ablity to attract and retain quality physicians in the community,” Paulus said.

Haywood doctors who are critical of Mission for its forrays in their home territory questioned why, if Mission’s goal was building the physician base, did it try to buy exisiting practices that are already here.

Paulus said the existing practices are the best route for recruiting more doctors.

“It is much easier to recruit into an existing group than create a new group,” Paulus said.

MedWest-Haywood got particularly irked, however, when Mission tried to court Mountain Medical Associates, a key practice in Haywood County with eight doctors across four critical specialties.

Realizing it had stepped on an ant hill, Mission actually withdrew its offer to Mountain Medical Associates, Paulus said. Before doing so, it extended an olive branch inviting MedWest-Haywood to form a three-way partnership with the practice and the two hospitals working together. That way MedWest-Haywood wouldn’t have to shoulder the entire financial burden of adding all the doctors to its payroll, Paulus said.

Paulus said the offer attempted to “reset the playing field and get past old emotions” between Haywood and Mission, but the opportunity was squandered.

Whether perception or reality, MedWest-Haywood had to counter Mission’s offers to buy local physician practices, despite not really having the money to do so.

“They in a sense have been forced into a bidding war with Mission for their own doctors and have had to pay more for those physicians as a result,” Fields said.

That was partly to blame for landing the MedWest-Haywood in a financial quagmire. It barely had enough cash on hand to make payroll and had to get an emergency line of credit to bail it out of a cash flow crunch.

But, those who defend the move say it was critical.

“If you don’t have physicians in your community pushing people toward your hospital, you aren’t going to have a hospital in your community,” said Kirk Kirkpatrick, a Waynesville attorney and Haywood County commissioner who has been active in hospital affairs.

Kirkpatrick said billboards for Mission in Haywood County are a testament that Mission is actively going after patients in Haywood County and trying to pull them away from MedWest-Haywood hospital.

“It is an extremely competitive business, extremely competitive,” Kirkpatrick said. “If you want a hospital in your community that can provide the kind of care you expect then you need to utilize your hospital. If you go over to Mission and you vacate your hospital and don’t utilize it, it won’t be here anymore.”

For more information on both sides of the issue, go to www.wncchoice.com and www.missionfactchecker.com.

Finding a new leader to replace the outgoing MedWest-Haywood President Mike Poore could take months and will be handled by Carolinas HealthCare Network rather than the local hospital board.

Carolinas HealthCare System, a Charlotte-based network of 34 hospitals that MedWest-Haywood joined two years ago, will conduct the search and vet applicants. The MedWest-Haywood board will make the final pick from among two or three finalists.

Finding a replacement who can navigate the complicated structure of MedWest may take time, according to John Young, the vice president for Carolinas HealthCare’s western region.

MedWest-Haywood is one of three hospitals under the MedWest banner, along with MedWest-Harris in Jackson County and MedWest-Swain.

Until recently, Poore had served as the CEO of all three hospitals plus the overarching MedWest partnership — in effect four organizations.

“He has taken on multiple roles in a complicated situation,” said Dr. Benny Sharpton, a member of the Haywood hospital board.

Poore had to balance the wishes of three medical communities, answer to the individual hospital boards plus the joint MedWest board — all the while reporting to his primary boss of Carolina’s HealthCare.

“This is not the place for a new CEO,” Young said.

Earlier this year, however, Poore was reassigned. He was stripped of his CEO status over all of MedWest and pulled back to his former role as president of MedWest-Haywood only.

Meanwhile, MedWest-Harris and Swain were given their own president in Steve Heatherly, who had been in Harris management for 15 years.

The management shuffle was aimed at placating dissention among some Jackson County doctors who felt Harris was not getting the attention it needed from Poore under the new MedWest venture. Harris has been faring worse financially than MedWest-Haywood and had seen a growing loss of patients to Mission, while Haywood’s market share has inched back up.

Failure to fix concerns raised by the Jackson medical community could potentially threaten the MedWest joint venture. When the joint venture was launched, an escape clause was built into the contract at the three-year mark, which comes up next year.

Young said dissolving it would be bad for both hospitals.

“The real issue from my perspective is simply we are better together,” Young said. “When you put the hospitals together, you have enough market share and enough demographics to be able to compete for primary and secondary care with Mission way better than any hospital could by itself.”

The hope is that MedWest-Harris and MedWest-Swain would get more attention under their own CEO than they could have gotten from Poore as CEO of the entire system.

How long the hospitals will remain under separate leadership isn’t clear. Ultimately, there needs to be a CEO over the entire MedWest venture, Young said. Having a president for each hospital plus a top CEO results in a “pretty hefty salary load,” Young said. So ideally, the president of either Haywood or Harris would serve in a dual role as CEO over the whole entity.

But, it is unclear when a return to joint leadership may occur. And, that complicates the hiring of a replacement for Poore.

“This is not the best moment for us to be looking for someone because we have this bifurcated approach,” Young admitted.

Young said there is no easy way to get through this “awkward moment.”

Given the complexities, an interim president will most likely be appointed while a permanent one is found. If the interim leader proves their mettle, they could be asked to stay, however.

“So we need as robust a search for an interim leader as a permanent one,” Young said.

For now, Young will serve in a transitional capacity while a search is conducted for an interim president.

“This organization has had enough change,” said Young.

The president of MedWest-Haywood hospital suddenly stepped down this week after three-and-a-half years on the job.

Mike Poore’s tenure at the helm of MedWest-Haywood was marked by an aggressive strategy to restore a crisis of community confidence, rebuild plummeting finances and compete head-to-head with the much-larger neighboring Mission Hospital in Asheville.

The news that Poore was resigning came as a surprise to the medical community and hospital’s board of directors, who met for two-hours Monday to digest the news.

Dr. Benny Sharpton, a long-time surgeon in Haywood County, said the medical community is going to be disappointed at the loss.

“The medical staff was not only comfortable but optimistic with his leadership,” Sharpton said. “He opened up lines of communication that had been broken it he past. He had an open door policy. Not all CEO’s have good rapport with their medical staff.”

Poore will be best known for rescuing the hospital after a tumultuous period when it failed federal inspections and was forced to essentially shut its doors for four months in 2008. The previous CEO, David Rice, who had become a lightning rod of controversy even prior to that crisis, stepped down and Poore stepped in — not only filling a leadership void but also putting the hospital on a path to recovery.

“Within a relatively short period of time, we had regained the market share we had lost. That is not a small feat,” said Dr. David Markoff, an ophthalmologist in Haywood County. “I have enjoyed working with Mike. I am sorry to see him leaving.”

Poore’s family man persona and regular presence at civic and social functions not only built rapport for the hospital but made him generally well-liked around town as well.

“Mr. Poore is one of the finest men I have ever known,” said Dr. Charles Thomas, an oncologist in Haywood County and a hospital board member. “He has done us a wonderful job. We accepted his resignation with deep regret and lots and lots and lots of thanks and platitudes.”

While Poore’s departure seems amicable, many in the medical community are left asking “why now?”

Poore, 47, does not have another job lined up. Depending on where he goes next, his family may stay in Haywood a while before joining him to avoid being uprooted. His son, a football player for Tuscola High School, will be a senior year next year, while his daughter will be a sophomore. His wife is involved in various community civic groups.

Poore is receiving a severance package but the terms aren’t public for now.

Poore said he will look for another hospital CEO position.

“I am a hospital administrator. That is my animal,” Poore said.

Turn-around man

There wasn’t any detectable tension between Poore and the Haywood medical community or hospital board.

But, Poore technically had another boss as well. He answered to Carolinas HealthCare System, a network of 34 hospitals based in Charlotte that MedWest joined two years ago.

Carolinas didn’t have a problem with his performance either, according to John Young, the vice president for Carolinas HealthCare’s western region who Poore reported to.

“This moment is Mike’s choice. This is not because of anything,” Young said. “It is just a certain period of time when it is time for somebody else to come in.”

By all accounts, Poore was dealt a difficult hand when he took the job.

“We will always remember his great leadership in getting Haywood Regional Medical Center back up and running,” said Fred Alexander, the chairman of the full MedWest board of directors.

With no patients to speak of, the hospital’s cash reserves had plunged so low that it had less than a month of operating revenue left when it reopened its doors. Patients who had turned elsewhere for medical care during the closure had to be lured back. And, the historically robust medical community in Haywood County, which had rallied around the hospital, needed reassurance they still had a future in Haywood County.

“He has worked so hard in the past several years to bring this entity, our hospital, upright again,” said Jean Burton, chair of the MedWest-Haywood board and a Cooperative Service agent in family and consumer sciences. “We were so knocked down a few years ago, and Mike worked tirelessly around the clock and has really stuck to the priorities he set.”

With the crisis in the rearview mirror, Poore led the hospital into a new partnership with neighboring hospitals in Jackson and Swain counties. The three hospitals formed a joint venture under the new MedWest banner. At the same time, MedWest joined the Carolinas HealthCare Network.

“I came to the hospital at a time of transition. We have gone through that transition during the last three-and-a-half years. It is just time for me to move on to other things,” Poore said.

Poore’s tenure isn’t uncharacteristically short for a hospital CEO. While the average time at one hospital for a CEO in North Carolina is longer, nationally it is 3.8 years, Poore said. Poore’s time at Haywood was just under that.

“It is not unusual for that turnover, but especially in a circumstance where you have a transition of bringing two organizations together to form MedWest,” Poore said.

There are always rivalries, even if friendly ones, between neighboring hospitals, Poore said. Bringing together two medical communities to act and think like a single entity can be difficult and challenging, he said.

As is sometimes the case in corporate mergers or turn-arounds, the person to affect change does not stay on as the long-term leader, Young said.

“Mike was the man to move the ball,” Young said of Poore’s role during the past three years.

Poore’s total compensation package was $444,000 a year.

Bumps in the road

Poore’s tenure wasn’t without snags, however. His honeymoon period began to fade in recent months, as the financial recovery initially witnessed under Poore began to backslide.

Despite a workforce reduction of 52 employees last year, MedWest has embarked on another round of cuts — 120 positions will be eliminated by July 1.

“It is what we need to do to right-size our organization with the reality of the revenue coming in today,” Poore said. Poore said MedWest is operating under austerity measures until the tide turns.

The layoffs amount to about 5 percent of the 2,100 employees across MedWest, including all three hospitals plus the 16 doctor practices now owned by MedWest.

In the midst of the financial troubles, MedWest-Haywood has seemingly been on a building and spending spree during the past year — from the very necessary replacement of a broken down generator to the very optional construction of a new surgery center.

In the end, MedWest-Haywood saw its cash-on-hand dip so low it had to turn to Carolinas HealthCare for an emergency $10 million line of credit. It was the first time Carolinas has ever loaned money to any of the 34 hospitals in its network.

While Poore defended the loan as no big deal, as Haywood has no other debt on its books, getting bailed of a cash-flow crunch by Carolinas clearly wasn’t ideal.

The loan was precipitated by a series of unexpected costs. Namely, MedWest-Haywood spent more than $10 million to replace a broken generator, upgrade its electronic medical records system and pay out judgments in two lawsuits dating to the previous administration.

Like Poore, Young characterized MedWest-Haywood as a victim of circumstances. Nonetheless, it revealed just how critical the financial status had become.

Build and they will come

While some costs indeed couldn’t be helped, Poore also oversaw an expansion campaign far more voluntary in nature.

A hospice center, a new surgery center and a new urgent care center are in various stages of construction, costing MedWest-Haywood a total of $2.35 million. The amount put up by the hospital is a fraction of the total cost — the lion’s share was paid for by the non-profit hospital foundation and a private group of physician investors.

MedWest also has new MRIs, a new diagnostic lab and new heart catheterization services.

“The hospital is very well positioned to serve patient needs and to grow and to prosper,” said Dr. Charles Thomas, an oncologist in Haywood County and former chief of staff of the hospital.

Young agreed.

“Mike started us down a track. A lot is already in place,” Young said.

The attention Poore gave to MedWest-Haywood didn’t sit well with some doctors in Jackson County, who felt their hospital was being slighted in favor of making Haywood the flagship of the MedWest system, another bump in the road for Poore in recent months. Disatisfaction among the Jackson medical community led to Poore being replaced as CEO of MedWest-Harris and relegated to being over MedWest-Haywood only.

Perhaps the most expensive piece of Poore’s expansion campaign was buying out several Haywood doctors’ practices. The exact cost of the private transactions are not known, but up-front costs aside, the newly bought doctor’s practices will continue to be a drain on the bottom line for another year or two before turning the corner. The hospital has to foot the bill for salaries, equipment, and overhead before the billing for patients begins to pay off.

While costly and perhaps outside the hospital’s realistic budget, it had to be done, according to Dr. Benny Sharpton, a long-time surgeon.

Mission Hospital in Asheville was courting the same physician practices, and Haywood had to make a competing offer. So Poore acted swiftly despite perhaps not having the money to do so.

“It was done in an extremely short period of time primarily due to outside threats from Mission hospital trying to siphon the loyalty of our doctors off,” Sharpton said. “He took that on in a difficult time. It needed to be done. It had to be done.”

While Poore has taken criticism from some for overspending or failing to enact austerity measures sooner, others disagree. When faced with embattled finances and dwindling market share, MedWest-Haywood had a choice. It could retrench and scale back. Or it could move forward with guns blazing.

Rather than resigning Haywood to being a rural second-fiddle hospital in Mission’s shadow, Poore chose to push Haywood onto a bigger stage.

“He has already laid the foundation,” said Cliff Stovall, a MedWest-Haywood board member. “The person that does all the spade work doesn’t always get to enjoy all the glory.”

The track set in motion by Poore will hopefully continue by the leadership team still in place, said Stovall.

“As much as I hate to see Mike ago, we are glad to have the people he put in place,” said Stovall, a retired army colonel who now works in tax preparation.

Poore assembled a nearly all-new management team for the hospital after he was hired, bringing on board more than a dozen vice presidents and department heads within his first two years.

Poore gives credit to the entire team for the advances that have been made.

“I am so proud of the accomplishments the team has made,” Poore said. “I feel like I am leaving this in good hands on a go-forward basis.”

The pending merger of Angel Medical Center with Mission Health System could be sidelined, at least temporarily, by a state bill aimed at limiting Mission’s influence in the region.

Sen. Jim Davis, R-Franklin, said he introduced the bill to offer a check on what he sees as a monopoly by Mission.

It would halt an affiliation between Mission and Angel that has been in the works for more than a year and is now close to a final deal.

“Right now it is in Angel’s court. We are certainly hoping within the next month,” said Janet Moore, director of communications at Mission.

Angel CEO Tim Hubbs said the decision of who Angel will affiliated with should rest with the people of Macon County, not Raleigh lawmakers.

“I have spoken to dozens of long term residents in our area that are outraged by the bill and are very upset with Senator Davis,” Hubbs said.

Hubbs said the bill was a shock.

“We were blindsided by it,” Hubbs said.

Davis met with Hubbs and key hospital leadership a couple of weeks ago to hear their concerns.

“He said the last thing he wanted to do was hurt Angel,” Hubbs said. But Davis has not withdrawn the bill or altered its language.

It is unclear just how much traction the bill has. Mission and Angel may complete their deal before the bill has a chance to move forward.

Davis suggests Mission could exploit its monopoly status to hoard health care services, limiting care patients can get locally and making them drive to Asheville.

But Davis’ bill would cause exactly that to happen, Hubbs said.

Mission will bring more health care service to Franklin, not less, Hubbs said. And without Mission, Angel may actually have to scale back what it provides, having the limiting effect Davis’ claims he doesn’t want.

“I think he has good intentions but the bill ironically would have the opposite effect,” said Trentham. “What he is trying to do ironically will limit free market choice.”

A partnership with Mission will make it easier to recruit doctors, bringing more specialties to Angel. Specialists from Asheville already hold occasional office days in Franklin if the services can’t already be found there.

“Mission and Angel have partnered for a very, very long time. We have been able to bring specialists and subspecialists to enhance what the community already has,” Moore said.

Angel most stands to gain financially. It will get better rates from insurance companies, can get more competitive prices on medical supplies and equipment due to bulk purchasing power, and tap Mission’s expertise on the complicated world of hospital administration and regulations.

“We aren’t to the point where we can’t survive without it, but we are definitely stronger with an affiliation,” Hubbs said.

Davis agreed Angel should be able to align with Mission if it wants to.

“I am not trying to stand I the way of that,” Davis said.

Davis said he understands why small hospitals need to be tied to a larger institution. Angel has 25 beds, and has 16 patients a day on average.

“The small ones just can’t survive by themselves,” Davis said.

But Davis’ bill would halt the merger for at least a year until the issue of Mission’s monopoly can be studied.

Hubbs last month announced he would retire in the next six months, altering solidifying the deal with Mission. That may be delayed now, too.

“I will stay here until we get some thing on the right footing,” said Hubbs.

A state bill aimed at ensuring a balance of power between Mission Health System and smaller hospitals has placed lawmakers in the middle of a healthcare turf war.

As Mission steps up efforts to acquire smaller hospitals and doctors’ practices around the region, some fear the Asheville-based health system will siphon healthcare dollars away from local communities and limit the scope of medical care patients can get closer to home.

Meanwhile, patients don’t want business motives to drive the healthcare they receive. The medical community universally asserts that isn’t the case, even as hospitals jockey over market share and fiercely guard their territory from encroaching competition.

But Sen. Jim Davis, R-Franklin, who introduced the bill, isn’t so sure.

SEE ALSO: Angel close to merger with Mission if state bill stays at bay

“Health care is a business, it is a huge business, and for Mission it is close to a billion dollar a year business,” said Davis, an orthodontist in private practice who represents the six westernmost counties in the General Assembly. “Just like any other business we have to guard against monopolies.”

If Mission’s dominance is allowed to expand unchecked, with more and more doctors and rural hospitals coming under its umbrella, Davis fears everything except routine medical procedures and basic care would be funneled to the flagship in Asheville.

“None of these hospitals in the western part of the state want to be an emergency care center and just shove everything to Asheville,” Davis said. “Local hospitals want to maintain care in the local communities.”

Mission leaders maintain they do not want to suck up business from smaller county hospitals — and if they tried, patients wouldn’t stand for it.

“The data has been very consistent that people prefer their local hospital for routine hospitalization,” said Janet Moore, communications director at Mission.

Mission plays a life or death role for patients across Western North Carolina as the only hospital in the state’s 17 westernmost counties where highly advanced medical care is provided.

It’s not in anybody’s interest to see that function undermined, Moore said. On that point, Davis agrees.

“It is essential that Mission hospital remain strong in the western part of the state,” Davis said.

Yet Moore said the freshman senator’s bill would hamstring Mission: it would bar Mission from affiliations or joint ventures with other hospitals and doctors’ practices until the end of the year, or until a study is completed.

“This bill says Mission has to compete with a different set of rules than everybody else,” said Moore. “We are a little perplexed by the bill. What problem is this legislation supposed to fix?”

Mission is already subject to anti-trust regulations, imposed when it merged with St. Joseph’s Hospital. The state dictates how much it can charge for procedures, sets a profit ceiling and limits how many doctors the hospital can employ.

“We basically operate under a microscope,” Moore said.

Davis questions whether the rules go far enough, however.

“I have heard of quite a few physicians that are concerned about the lack of competition in the medical field,” Davis said.

Davis’ bill would commission a study to determine if those concerns are warranted.

“I have no evidence Mission has done anything wrong,” Davis said. “The whole purpose of my bill is to start a conversation.”

Mission’s frontline

Doctors in the region are divided on whether Mission is predatory in its business practices.

“There always will be a lot of paranoia in healthcare that the big, 800-pound gorilla is going to come in and steal your patients,” said Dr. David Mulholland, a family doctor in Waynesville who is affiliated with Mission.

But, that’s not the case, he said.

“They have plenty of patients. They don’t need any more patients,” Mulholland said.

What Mission does need, however, is referrals for highly specialized care not available at local hospitals — such as neonatal intensive care, open-heart surgery or repairing aortic aneurysms. Mission needs enough volume to cover the cost of highly specialized doctors and equipment. It counts on smaller hospitals to send patients needing advanced medical care its way, Moore said.

But when the hospitals in Haywood, Jackson and Swain counties partnered up last year with Carolina’s Health System headquartered in Charlotte, Mission began fearing those patients could be sent out of the region to Charlotte.

“Hospitals have very small profit margins. If even a small percentage of that business was siphoned off to Atlanta or Charlotte, it would be a big thing. It would hurt access for everyone in Western North Carolina,” Mulholland said.

Mission had hoped the MedWest group of hospitals in Haywood, Jackson and Swain would partner with it. But when they chose Carolinas instead, Mission reacted.

Mission began actively recruiting doctors in Haywood to join its staff. It also set up an outpatient clinic practically next door to Haywood’s hospital staffed by rotating doctors from Asheville.

Critics fear such a toehold could allow Mission to steer patients to Asheville for services. But it could be Mission is merely protecting its interests.

“Would they have had an interest in Haywood County if it was still just Haywood Regional Medical Center? They probably would have said ‘No, it is a stable situation. We get the tertiary referrals and that’s what we need and that’s what we want,’” Mulholland said. But “hospital administrators know the history of what happens when other competing large health care systems come into your area.”

Perhaps the paranoia cuts both ways, however.

MedWest CEO Mike Poore said his hospitals are not sending patients to Charlotte rather than Mission.

“Our referral patterns have not changed at all,” Poore said. “Patients do not have to worry that if a physician is employed by whatever institution that healthcare decisions are made based on anything other than providing the best care.”

When Poore’s own son needed neurosurgery recently, he sent him to Mission, not Charlotte.

“The neurosurgeons at Mission are excellent,” Poore said. “There is no reason for anyone to go beyond there for tertiary care.”

Poore said there are a lot of fears, but they are nothing more than that.

“We are working very hard to work together,” Poore said.

Dr. Stephen Wall, a pediatrician in Haywood County, said Haywood is a great hospital with great doctors, as is Mission.

“I wish we could all work together regionally,” Wall said. “I wish we could do this without always feeling like we are cutting each other’s throats.”

While MedWest frets that Mission is trying to steals its local health care dollars, and Mission frets that MedWest will send patients to Charlotte instead of Asheville, competing hospitals are nothing new in major metropolitan areas.

“It is not uncommon to have surgery center, hospital, surgery center, hospital — all within a stretch of a quarter mile,” said Dr. Chuck Trentham, an anesthesiologist at Angel Medical Center in Franklin. “We just aren’t used to the big business of medicine.”

Trentham said both sides are off in their portrayal of Mission — as a predatory hospital on one hand, or a purely benevolent institution on the other.

“I don’t think they are as bad as they are portrayed, or as good as they portray themselves,” Trentham said.

Angel CEO Tim Hubbs said he does not resent doctors affiliated with Mission providing services in their territory.

“If I didn’t have them coming a couple days a week I may not have an oncologist. For us it is not competition, it is providing a benefit to our community,” Hubbs said.

Wall said the outpatient clinic being run by Asheville doctors could be driven more by doctors’ interests than Mission’s.

“There are probably too many doctors in Asheville,” Wall said. “It is a great area and doctors want to live there, so there is competition for a shrinking healthcare dollar.”

In Franklin, doctors are used to competition from neighboring counties. Several Sylva-based practices have satellite offices in Franklin, holding office hours there one or two days a week, and sending business out of the county to Harris hospital run by MedWest in Sylva.

“The same way Mission is encroaching on MedWest, MedWest is encroaching on us,” Trentham said.

Who’s for it?

While battle lines are being drawn over the bill, exactly how it came to be isn’t completely clear. Davis wouldn’t name names when asked who approached him about the bill or who helped write it.

“I have talked to a lot of people about this bill,” Davis said. “There were hospitals and physicians groups and individuals that encouraged me to file this bill.”

It’s no secret that Park Ridge Hospital in Hendersonville supports the bill, and many believe it was the instigator. Park Ridge has reportedly brought two lobbyists on board to advocate for the bill in Raleigh.

For now, it remains the lone hospital that has gone public in support of the bill.

Park Ridge is part of the Adventist Health System, with 43 hospitals in 12 states. While Davis is a Seventh-Day Adventist, he said he did not introduce the bill to help Park Ridge because of that shared connection.

Davis said there are a “plethora” of theories about motives behind the bill. But he said his primary concern is that “health consumers’ interests are protected.”

Despite tension between Mission and Haywood, MedWest is not for the bill.

“We just don’t feel like we have any standing to support that bill,” said MedWest CEO Mike Poore. “We don’t see legislation as how you deal with competition. We believe in providing good quality health care, strong access and a great patient experience as how we compete, and that legislation is not needed.”

Some in the medical community have accused MedWest of advocating for the legislation, however.

“There has been a lot of goings on behind the scenes and behind closed doors,” Moore said.

Dr. Peter Goodfield, an Asheville cardiologist, claims the legislation was “promulgated by Park Ridge Hospital and MedWest.”

Park Ridge in Henderson and MedWest-Haywood are the region’s biggest and likely strongest hospitals after Mission. Yet their close proximity to Asheville makes it easy, too easy, for patients to defect — and thus have the most to lose should Mission launch an all-out affront.

While MedWest’s official position is against the bill, individual doctors in Haywood County are supporting it.

Three former chiefs of staff of MedWest-Haywood have gone on record supporting the legislation and accusing Mission of predatory practices. They wrote to the state as part of the public comment period on the COPA.

“Taking patients from the local hospital and medical community undermines the strong rural hospital system we are trying to build,” Dr. Shannon Hunter, an ear, nose and throat specialist in Haywood, wrote.

Dr. Al Mina, a general surgeon in Haywood County, believes Mission’s “aggressive expansion” into surrounding counties should be halted while the issue is studied.

“I have seen them duplicate services here in an attempt to weaken the local hospitals and siphon care that can very easily be performed here to Asheville,” Mina wrote.

Dr. Charles Thomas, an oncologist with 21st Century Oncology in Haywood County, has been at war with Mission hospital for more than 15 years.

Mission has attempted to block 21st Century Oncology from opening new cancer treatment centers in the region, from Franklin to Murphy to Marion. Mission challenged state permits for the competing cancer services and filed lawsuits to the same end.

“Throughout these many battles Mission’s ‘mission’ was to prevent competition,” Thomas wrote in his public comments to the state. “Mission will continue to do everything in its power to dictate healthcare delivery in Western North Carolina – even if it means cancer patients have to travel hours to receive necessary care.”

Recruiting doctors

In an effort to temper Mission’s dominance in the region, Davis’ bill aims to cap the number of doctors on Mission’s payroll.

Mission can’t employ more than 20 percent of the doctors in Buncombe County under its current anti-trust regulations. It is approaching that cap now.

Mission asked the state to increase the limit, which may have backfired by opening the door to the current debate. Davis’ bill would immediately stop Mission from employing more doctors during a study period, and would cap the number of doctors Mission can employ to 10 percent for the 18-county region. (The 20 percent cap now applies only to Buncombe.)

It’s not surprising that Mission wants to employ more doctors. It’s a national trend, driven by today’s generation of doctors who find the hassle of running their own office — the stress of being an entrepreneur on top of practicing medicine — isn’t worth the freedom.

It’s also financially attractive. Doctors are increasingly being squeezed by rising overhead and lower reimbursements from Medicare and Medicaid patients. As a result, doctors are gravitating toward a new model of being employed directly by hospitals. The hospitals keep the revenue generated from the patients, while providing a steady salary to the doctors.

But allowing Mission to employ more and more doctors will give them a lock on health care, Davis said.

“Where do you think the physicians are going to refer their patients if they are employed by Mission?” Davis said.

If Angel Medical in Franklin merges with Mission, Davis questioned whether doctors would start referring patients to Mission instead of the much closer hospital in Sylva.

But Mulholland in Waynesville said he does not steer them toward Asheville over Haywood.

“I let them decide where they want to go,” Mulholland said.

“I have no reason to stop using the local specialists. I still talk to and use our local physicians and trust them.”

Mission employs 150 physicians out of 700 who have privileges to treat patients at the hospital. Other hospitals employ a greater percentage of their doctors than Mission does. Angel employs 15 of the 40 doctors on its active staff while MedWest employs 75 doctors out of 230 — both more than one-third.

The majority employed by Mission are specialists. If they had to operate as a private practice, they wouldn’t be here, Moore said.

“There isn’t the volume of work here, for them to maintain their own practice would be financially very difficult,” Moore said.

Specialists employed by the hospital include several children’s specialists, like pediatric cancer and surgery.

“Without those specialists here these families and their children would be driving anywhere from two to four to six hours to get care,” Moore said.

Rural hospitals that have affiliated with Mission in recent years were partly drawn by having a heavy-weight in their corner to help recruit doctors.

Once affiliated with Mission, Angel Medical may be able to attract doctors to Franklin that it couldn’t on its own.

“We have the resources to pay the competitive salaries,” Moore said.

Mission is better equipped to help set up their offices, to buy them the equipment and technology they need, and offer them a larger network of doctors to be a part of, Moore said.

However, Davis has heard that some physicians felt forced to give up their private practices and become employees Mission. State regulators who crafted Mission’s anti-trust regulations obviously thought a cap was necessary, but didn’t foresee 15 years ago that it would be necessary beyond Asheville’s borders.

“There is a reason that was there: to protect physicians’ practices and to protect patients,” Davis said.

But according to Dr. Peter Goodfield with Asheville Cardiology Associates, tightening the cap for Mission when the national trend is moving the opposite direction is ridiculous.

“There are going to be virtually no physicians remaining in private practice. None of us can survive,” Goodfield wrote in public comments submitted to the state.

Mission monopoly?

Mission has already folded three smaller hospitals into its umbrella — those in Marion, Spruce Pine and Brevard. The hospital in Franklin is headed that way.

Mission is also close to a deal to build a $45 million outpatient center in conjunction with Pardee Hospital in Henderson County, seen as a threat to Park Ridge, which is also based in Henderson County.

Mission is not taking advantage of its dominance when it comes to pricing, Moore said. Its is the third lowest hospital in the state for costs, even though Mission has the highest percentage of patients in the state on Medicare and Medicaid — nearly 70 percent — who pay less than other patients.

While Davis talks about Mission’s unfair advantage, Moore said the bill actually stacks the deck against Mission.

Mission’s neighbors include Park Ridge in Hendersonville, run by Adventist Health System, with hospitals in 12 states, and Carolinas Health System in Haywood County, which has 29 hospitals under its umbrella.

“And they are claiming that we are a monopoly?” Moore said. “We don’t mind competing on cost and quality. We just want there to be a level playing field.”

Angel is a stand alone hospital, an increasingly rare status for small hospitals. It can’t continue that way indefinitely and has brokered a deal to merge with Mission in coming months. The bill would delay or even derail it.

Angel might then have to turn to MedWest for a partnership, which already has hospitals in Haywood, Jackson and Swain.

“That’s a de facto monopoly right there,” said Dr. Chuck Trentham, an anesthesiologist at Angel.

But given its market share of only 60 percent in Haywood and 57 percent in Jackson, it doesn’t come close to the definition of a monopoly, MedWest CEO Mike Poore said.

“The contrast to that is Mission’s market share in Buncombe and Madison is north of 94 percent,” Poore said.

What is COPA?

While a bill circulates in Raleigh to limit the dominance of Mission Health System, a state regulatory process is already under way to examine just that issue, independent from the legislation.

Mission is governed by anti-trust regulations dating to its merger with St. Joseph’s 15 years ago. The regulations are up for review, prompting a flurry of debate in the medical community about whether Mission’s ambitions should be curbed or it should be given the freedom it needs to serve as the region’s healthcare leader.

The players

Mission Health System: Memorial Mission merged with St. Joseph’s hospital 15 years ago to form a single, large hospital serving the Asheville area. It has three smaller hospitals under its wing, with plans to add a fourth.

Park Ridge Hospital: Based in Hendersonville and perhaps Mission’s fiercest competitor, Park Ridge is part of Adventist Health System with 43 hospitals in 12 states.

MedWest-Haywood, MedWest-Harris, MedWest-Swain: The hospitals in Haywood, Jackson and Swain counties recently united forming the new entity MedWest and adopting new names in the process. They are 18 months in to a three-year management contract with Carolinas HealthCare System.

Carolinas HealthCare System: As the state’s largest hospital network, the Charlotte-based system has 33 hospitals under its umbrella.

Angel Medical Center: A small standalone hospital in Franklin, Macon County. Angel plan to affiliate with Mission.

A group of emergency room doctors has been awarded $1.6 million in a lawsuit against Haywood Regional Medical Center.

Haywood Emergency Physicians was ousted by the hospital in 2006 and replaced with a corporate physician staffing outfit before the group’s contract had expired. The group sued for breech of contract, unfair and deceptive trade practices and conspiracy in restraint of trade.

The case was heard before a three-member panel of arbitrators in mid-January. Much like a judge’s ruling in court case, the decision was binding, meaning neither side had the option of accepting or rejecting the amount of the award.

At the hearing, the hospital failed to produce any evidence that it had a good reason for ousting the ER doctors. As a result, the hospital owed the ER doctors for 18-months of lost income, the arbitrators ruled. The award will come out of the hospital’s bottom line.

Attorney Bill Cannon, who represented the group of doctors, said they were pleased with the amount. The hospital offered to settle out of court two days before the arbitration hearing, but the physicians rejected the offer as too low.

Mark Jaben, one of the ER doctors with Haywood Emergency Physicians, said the reasons given by the hospital leadership for ousting the emergency doctors at the time were “smokescreens.”

“Why did he want us out? It is a really good question I think a lot of people would say it boiled down to wanting power and control,” Jaben said. “We were in the whistle blower position.”

The lawsuit dates back to 2006 when the hospital was under different leadership. The hospital has undergone a massive transition since then, including a nearly clean sweep of top leaders and the governing hospital board.

The hospital failed federal inspections in 2007, causing it to lose its Medicare and Medicaid status and triggering an exodus of private insurers as well. The hospital essentially shut its doors for five months except for the most basic services.

As a result, the hospital leaders who had ousted the ER doctors the previous year got ousted themselves. It became clear that many of the issues raised by the ousted ER doctors — issues hospital leadership tried to silence — were in fact true.

The ER physicians enjoyed an outpouring of community support as well from those urging hospital administration not to get rid of them. But a few who believed the accusations against the group espoused by Rice apologized after the unraveling of his administration.

“People said ‘You were telling the truth and we are sorry we didn’t listen to you,’” Jaben said.

Jaben said it is a shame the community had to go through such a cataclysmic event to realize there were problems at the top.

“The full cost is enormous, well more than just the amount of the award in this one case. We trust that this final action will free the hospital of any remaining vestiges of the old guard and conclude this sad tale,” Jaben wrote in a group statement from the doctors.

Jaben said the hospital board at the time was led down the wrong path by Rice.

“I think boards have a responsibility to verify their information, to verify that things are happening the way they are being told,” Jaben said. “Clearly did not do that.”

While the medical community overwhelmingly rallied to the ER doctors’ defense, the hospital board and administration summarily dismissed their impassioned pleas. The physician community came to the sinking realization of just how little they were valued by hospital administration, Jaben said.

“The physician community had been systematically cut out of the process over the course of many years,” Jaben said.

Jaben said the new CEO Mike Poore has embraced the medical community.

“If you listen to Mike Poore’s language, he understands quite well that there has to be collaboration and cooperation with the medical staff,” Jaben said.

If Jaben could go back and do anything differently, he would have worked harder to achieve that.

“Your success lies in collaboration. At the time we did as best as we could trying to help that happen, but I think there are yet other ways we could have done a better job,” Jaben said.

Yet the records show that Rice’s administration was trying to get rid of the ER doctors prior to their firing. During the course of the lawsuit, Cannon got copies of emails between the hospital and the corporate physician staffing outfit months before the hospital pulled the trigger on firing Jaben’s group. Other evidence shows Rice had the group in his sights long before that, including a phone call from him to one of the ER doctors pledging to get even after the doctors shared a report outlining areas where the hospital needed improvement.

Rice did not return a message seeking comment prior to press deadline.

Poore said the hospital is glad to have this issue behind them.

“We understand that good relationships with all of our 230 physicians are critical in providing the world-class health care our communities deserve, and we’re happy to close this chapter,” said Poore.

Haywood Regional Medical Center is now part of MedWest, an affiliation with the hospitals in Jackson and Swain counties, and has a partnership with Carolinas Medical System out of Charlotte.

Jaben said the team of 10 ER doctors had loved living and working in Haywood County.

“This has been gut wrenching for many of them,” Jaben said. Only four have remained in Western North Carolina. The rest had to move to find work. Even those who stayed are not on the permanent ER staff of a hospital, but either went into another field of medicine or travel for work.

The engineering, grounds and Behavioral Health Unit at Haywood Regional Medical worked together to brighten the hospital community by planting a rose garden.

Research has shown that hospital patients whose windows looked out at landscape scenery recovered from surgery quicker than those who faced a brick wall.

Marty Murray and the hospital’s engineering team prepared planting beds at the front entrance to the Haywood hospital. With the help and hard work of patients and staff of the Behavioral Health Unit, the team then transformed the space into a rose garden that will bloom throughout most of the year.

Haywood Regional Medical Center was in better financial shape than expected as it embarked on an affiliation with neighboring hospitals under WestCare and entered a management contract with Carolinas Healthcare System this month.

The latest financial report for Haywood Regional Medical Center shows the hospital is exceeding its budgeted targets, despite a tight economy and the continued uphill climb to rebuild its reputation after failing federal inspections in 2008. That year, the hospital lost millions after essentially shutting its doors for five months during a top-to-bottom internal overhaul.

The hospital reported a nearly 2 percent profit margin for October and November of 2009. It marks a four percent turnaround over the same months last year, which showed a nearly 2 percent loss.

The number of patients has increased over last year, although not to the level hospital officials hoped. Nonetheless, the hospital remained profitable by slashing expenses.

“We’re not making as much money, but we’re spending less money, and that’s a very good thing,” said Treasurer Cliff Stovall of HRMC at the hospital’s last meeting as a public entity.

The hospital has made meaningful changes across the board, according to Gene Winters, HRMC’s chief financial officer.

“We’re working a lot smarter and harder,” said Winter, who attributes the success to the hospital’s employees. “We went through a bad patch and wanted to come out and really hit the ground running, and that’s what they’ve done.”

HRMC is leaving certain positions open after people retire or move away and is utilizing in-house nurses, rather than more expensive contract nurses, to fill in when short-staffed.

The hospital is also getting a bigger bang for its buck by focusing capital investments on equipment that generates returns.

For example, the hospital spent roughly $50,000 on emergency department software, which paid for itself within the first 15 days.

HRMC also purchased a digital mammography machine, which fetches more revenue from health insurance companies since it detects breast cancer earlier.

Replacing the hospital’s film mammography machine also meant eliminating the expense of film, chemicals, and labor used to process the images.

Winters said that could mean cost savings of well over $100,000 if HRMC uses the mammography machine as much as it did last year.

Entering into a management contract with the Carolinas Health System, a conglomerate based in Charlotte with a network of 32 hospitals, means the hospital faces the potential of saving money on even basic purchases.

HRMC has already taken advantage of its improved buying power by saving 12 percent on new gastroscopes and 11 percent on orthopedic bone screws.

“That doesn’t sound like a lot, but it’s several hundred thousand dollars over a course of a year,” said Winters. “It’s a very big chunk of change.”

Haywood Regional Medical Center CEO Mike Poore has been named as the new chief executive officer of MedWest Health System following a unanimous vote of the MedWest System Board and the recommendation of Carolinas Heathcare System.

MedWest is the name of the affiliation of Haywood Regional, Harris Regional and Swain County hospitals.

“I’m excited about the challenges of bringing these two organizations together to better serve all of our communities,” Poore said. “With the resources of WestCare, Haywood and Carolinas HealthCare integrated, we’ll be able to enhance further the healthcare of our region,”

As soon as MedWest governing board members were appointed, they faced the tough decision of picking one of two leaders vying for the position of MedWest CEO: Poore, who served as CEO of Haywood Regional Medical Center, and Mark Leonard, CEO of WestCare Health System.

Poore will assume the MedWest CEO position Jan. 1, 2010.

Leonard congratulated Poore on his appointment upon learning the news.

“I would ask the WestCare staff to give Mike the same level of commitment and dedication they have provided me,” said Leonard.

Leonard has chosen to seek other professional opportunities and will be evaluating them in the upcoming weeks and months, according to WestCare spokesman Brian Thomas.

The transitional period will take approximately six months, according to Mark Clasby, chairman of the MedWest board.

“Mike Poore will be very busy over the next few months working with the new organization and with Carolinas HealthCare System as they develop the management action plan to be presented to the MedWest board,” said Clasby.

Before serving as HRMC’s CEO, Poore served as senior vice president and administrator for two hospitals and a nursing facility in Atlanta.

The MedWest Board of Directors is made up of 14 members and has equal representation from both Haywood Regional Hospital and Harris Regional and Swain County Hospitals. Two physicians each from Haywood and WestCare also serve on the board of directors.

Both WestCare and HRMC have experienced financial difficulties over the last two years. HRMC had its Medicaid and Medicare funding yanked after failing inspections. That controversy nearly led to the hospital’s closure and prompted the resignation of former CEO David Rice and the hiring of a new administrative staff. WestCare last year announced a job reduction of up to 90 employees as it struggled to remain financially viable.

The two hospitals announced earlier this year their intention to affiliate under the name MedWest and enter a management contract with Carolinas Healthcare System out of Charlotte. The two hospitals will remain separate and keep their own boards, but Poore will act as CEO of the joint MedWest system.

Despite their requests, Haywood County commissioners will not be guaranteed a spot on the new joint operating board of Haywood Regional Medical Center and WestCare.

Commissioner Mark Swanger initially called for the seat to ensure transparency and accountability to the public, which has a vested stake in the hospital.

Commissioner Bill Upton said as an elected leader, they are the first ones to be blamed “if things go south.”

“I think it would keep us closer to the situation,” Upton said. “It makes a difference. I think it would be positive for all of us.”

When HRMC failed federal inspections two years ago and had to all but shut down for five months, commissioners were criticized for not providing enough oversight of HRMC. Two commissioners up for election that year lost, with backlash over the hospital crisis blamed as one of the reasons for their ousting by voters.

Commissioner Skeeter Curtis said the public still thinks of HRMC as “their” hospital, since county taxpayers backed a loan used for its construction, even though the hospital in fact paid back the loans and the public did not have to pony up any money.

HRMC CEO Mike Poore said he disagreed that a commissioner’s presence would somehow provide more transparency. Poore said the county commissioner serving on the board would not be able to share what was discussed by the joint hospital board outside its private meetings anyway.

“The county commissioner has no more authority to speak outside that meeting than anyone else,” Poore said. “They are not a county commissioner at that meeting. They are a member of the joint operating committee.”

Mark Clasby, chairman of the HRMC board, said giving a county commissioner a permanent seat at the table would have been a deal killer in the joint venture. Clasby added that commissioners can serve, and indeed one is on the inaugural board, but they aren’t guaranteed a spot going forward.