The sale of the hospitals in Haywood, Jackson and Swain counties to Duke LifePoint has entered the final stages but is still several weeks, and possibly even a few months away.

The clock is ticking for the fundraising foundations of Haywood Regional Medical Center and Harris Regional Hospital to spend earmarked money in their coffers to benefit the hospitals.

Haywood County commissioners are going through the motions of selling Haywood Regional Medical Center to a national hospital chain with little in the way of pomp and circumstance.

The sale of the hospitals in Haywood, Jackson and Swain counties to Duke LifePoint Healthcare next year will bring an unexpected windfall for local coffers come tax time.

A parade of community leaders, doctors, nurses and hospital supporters voiced overwhelming support for the sale of Haywood Regional Medical Center to Duke LifePoint during a public hearing on Nov. 12. 

When a “for sale” sign went up on the hospitals in Haywood, Jackson and Swain counties earlier this year, it was chalked up as inevitable, a sad but unavoidable trajectory faced by small, independent hospitals everywhere.

SEE ALSO: HRMC votes ‘yes’ to Duke LifePoint, outpouring of public support

At best, the safe harbor of a big hospital network would bring practical perks — be it regulatory expertise, doctor recruiting prowess, leverage haggling with insurance companies or buying power for medical supplies. 

The trio of MedWest hospitals in Haywood, Jackson and Swain counties could be sold by next spring to Duke LifePoint Healthcare, joining a network of 60 community hospitals nationwide.

The aggressive timeline is contingent on due diligence by both sides and further negotiations to refine exactly what the sale would look like. Persistent financial struggles prompted the hospitals to put themselves up for sale in the spring. They advertised to prospective buyers and last week announced their top pick was Duke LifePoint. 

The hospitals in Jackson and Swain counties formally declared last week that they want out of the partnership forged nearly three years ago with Haywood’s hospital — however, it’s not at all clear whether the leaders of Haywood Regional Medical Center will agree to let them leave.

By Gwang S. Han • Guest Columnist

Simply put, I question if there is a problem with the current system at Harris Regional Hospital and Haywood Regional Medical Center, supervised by Carolinas HealthCare in Charlotte.  Since retiring in 2007 after 33 years in Sylva specializing in obstetrics and gynecology, I paid little attention to the hospital’s future. Some old patients share their complaints of deteriorating quality care, emergency room problems, or the lack of good doctors; they never complain about the business structure established in merging two hospitals. However, I wonder why and how they arrived at this business model; what triggered it? Did local hospital management, boards of trustees, groups of physicians elect to merge, or did Carolinas HealthCare offer a deal too good to refuse?

The real problem appears loss of revenue for Harris Regional Hospital caused by a continuous drain of patients mostly to Asheville doctors, as stated by Steve Heatherly, Harris Hospital administrator. This has occurred since 2007 and increased almost 25 percent between 2007 and 2010, according to Becky Johnson of The Smoky Mountain News.  Hospitals do not admit patients: doctors do. Patients are not stupid and can judge the quality of care they receive, especially women.

So what happened in those two years? Can identifiable causes explain the decline of the Sylva hospital? Did the “loss of a few doctors” cause the large migration of patients? Or was deteriorating quality of care at Harris Regional Hospital not the main reason for people to flee to Asheville for medical care? Was the hospital so poorly run that it needed outside help, or were the replacement doctors in certain specialties not providing the same quality of care people received from those few doctors who left?

The uproar from complaints by a few Sylva physicians appears confined to the business aspect of medical practice, as if recently implemented organizational system is the reason patients go to Asheville. Hospitals do compete; doctors also compete in providing quality medical care. Doctors are the main workhorses and hospitals play supporting roles for physicians to carry out their jobs. Healthy competition between hospitals and between physicians does not lead to a downhill path and death: to the contrary.

The two hospitals must have reasons to elect the “big daddy” approach instead of allowing two not-necessarily-close siblings to pool their energy and financial resources and use their combined synergy to retain their deserved market share instead of worrying about the eventual demise of one or both medical facilities. Size of business offers some advantage with its flexibility to maneuver, deep pockets, and ability to negotiate with insurance companies for remuneration. However, “big daddy” doesn’t have a reason to feel charitable toward these two ducklings (not necessarily ugly). It calculated its “take” by offering mighty financial power and business acumen, namely a bigger business market and bigger referral base. There is some truth in old saying that the friendship between two competing entities is inversely proportional of square of distance. This might have been the reason the hospitals chose Carolinas HealthCare instead Memorial Mission Hospital.

To me, the problem seems that the perfect picture doctors and hospitals have drawn is not what they expected to see and is not a perfect one. Is there someone or some organization to blame for the ugly picture or for the unfair deals as claimed by a few Sylva doctors? Let me remind you that these two hospitals have existed in two different business environments in a geopolitical-business sense and have two different doctors’ groups employing different business models. Perhaps Sylva has the advantage of being located in the bottleneck of two major highways and experienced an earlier introduction of medical specialties than in towns west of Sylva. Haywood has the handicap of being close to Asheville, the capital city of WNC.

The population and industry in Jackson County can’t support the hospital and the number of doctors in Sylva unless they are draw patients from surrounding communities. In fact, a lot of patients the Sylva hospital claims to have lost are not from Jackson County, but those from other communities who sought medical care in Sylva because they found better care than from doctors in their local community or it lacked specialists.

As the first board certified obstetrician and gynecologist west of Asheville, I witnessed on the ground level how people sought better care for their needs. Women are smarter, far more discerning, and more selective in choosing their doctors than men, in general, when looking for quality. The majority of medical decisions in the family are made by the woman in the house. They don’t mind of traveling distances seeking “better care.” Sixty five percent of my patients were not from Jackson County, but I doubt I could have attracted so many patients from different areas unless they thought it better. Most patients came by the word-of-mouth from other people, in fact more than 90 percent.

I think the two hospitals should maintain their separate identities and invest strength and financial resources in areas where they provide the best care: internal medicine, pediatrics, obstetrics and gynecology, and the surgical fields. Harris Hospital has taken many missteps wasting its resources with misguided objectives (one example is purchasing spine table so scarcely used). It would benefit from a modern Women’s Center, including a new labor and delivery room with modern, appealing décor instead of using the 1970s ugly, depressing facility. The year I arrived, about 250 deliveries occurred in the Sylva hospital; at its peak, close to 900 deliveries happened in one year (there were many fewer in Waynesville). I believe almost two- thirds of the deliveries were for people outside of Jackson County. Obviously, field of women’s and children’s health care can be a successful enterprise for this hospital.  

In summary I don’t see a problem with the business structure since Harris Hospital has its own boss and administrative system with the help of Carolinas HealthCare. It should work with Haywood County in areas useful for both institutions. The key now is to regain the confidence and trust of people in this area. I kept the following message at the entrance of my office: “Please don’t come to see me unless you have trust in me.” It may take a long time for trust to return, but the two institutions have no other option but to try. Don’t underestimate consumers, clients, or patients and their ability to discern the quality of care or their knowledge of their health issues. Additionally, the residents of Jackson County should be concerned and become more actively involved in this effort. I wish them the very best.

Gwang S. Han, MD, FACOG, is a retired Jackson County physician.

MedWest leaders are struggling to hold a fledgling joint hospital venture together in the wake of recent physician turmoil, but there’s likely no easy fix for the identity crisis faced by Jackson County’s medical community.

Fearing the sanctity of Harris hospital is on the line, a group of Jackson County doctors went public two weeks ago with a litany of concerns. They aren’t alone. Doctors everywhere are desperate for solid ground, but instead have been caught up in the competitive turf wars playing out between hospitals.

Both MedWest-Harris and MedWest-Haywood have seen a troubling loss of patients to Mission Hospital in Asheville in recent years. Harris lost 10 percent of its in-patient business in just five years, most of it to Mission. Haywood lost 6 percent.

Indeed, both hospitals hoped the MedWest joint venture two years ago would shore up that erosion of patients. Both, however, seemed to have different ideas of how that would play out on the ground.

Was there enough business for both to stay the size they were, or would one ultimately evolve into the big kid on the block — and if so, who?

SEE ALSO: Jackson doctors fear underdog status in MedWest venture

“Is there enough to go around for two? I don’t know the answer to that,” said Dr. Waverly Green, a pulmonologist at Harris.

It’s a troubling proposition for doctors who have married their livelihoods to a particular hospital — from building up their practice to raising their families here — to have their careers hinge on forces outside their control.

“It is challenging to know who is going to remain standing,” said Miriam Schwarz, the director of the Western Carolina Medical Society, a trade group for doctors in the region. “I think this jockeying for position is in response to the current climate.”

Schwarz said the “tumultuous times” have put everyone on edge.

“In this time of uncertainty, what we are witnessing across the country is heightened worries, anxieties and concerns about how health care will be delivered in the future,” Schwarz said.

Big kid on the block

When the MedWest venture was formed two years ago, Jackson’s medical community had little to fear from its neighbor.

“There has historically been very little market overlap,” said Steve Heatherly, the president of Harris.

Fewer than 5 percent of patients from Jackson migrated to neighboring Haywood or vice-versa.

“We said, ‘We’ve got enough to do, they’ve got enough to do and that’s the way it should be,” said Dr. Earl Haddock, a cardiologist at Harris for 22 years.

The result: two neighboring medical communities, largely happy to serve their own patient base and competing very little amongst each other.

“We’ve always had a collegial relationship. It has never been a competitive thing. They took care of their county and we took care of ours,” said Dr. Randy Savell, a gastroenterologist at Harris.

Haywood clearly had the tougher row to hoe, however. Just 25 minutes from Asheville, it was all-too-easy for patients who subscribed to the “bigger is better” theory to opt for Mission.

“It would be hard to survive in Mission’s shadow like that,” Green admitted.

Harris, however, had been largely spared from the specter of Mission. For decades, Harris acted as a net, capturing patients from the more rural counties to its south and west. It was far enough away that patients would only go to Mission if they really needed to, not just because they could.

And compared to the smaller, more rural counties around it, Jackson had a leg up simply by having a hospital at all.

“A lot of people west of here would stop at Harris because the roads to Asheville were bad, and there was at least a specialist here,” said Dr. Joe Hurt, a retired pathologist who helped build up Jackson’s medical community in the late-1970s and early ‘80s.

As a result, it had grown much bigger — both in the size of the hospital and the breadth of its doctors — than it ever could have been if drawing from just Jackson County’s population.

Patients from Swain, Macon and Graham counties plus the Cherokee Reservation accounted for nearly 50 percent of Harris’ total in-patient business. Only 45 percent of its in-patient volume comes from Jackson itself, according to market share data collected by the state.

Desperate times

It’s quite likely that Jackson’s medical community saw itself as poised to emerge as the epicenter of MedWest.

Not only did Haywood have the geographic conundrum of Mission to grapple with, it was still trying to rebound from a damaged reputation after failing federal inspections in 2008. It was an unfortunate turn of events blamed more on bureaucracy and bad leadership than a reflection of its health care, but a PR crisis nonetheless.

But, there were other forces at play. Chiefly, Harris was no longer immune to the siphoning effect of Mission.

While losing patients to Mission was a long-standing struggle for Haywood, Harris was not used to fighting that battle, and the hospital for the first time found its bottom line in jeopardy.

Harris is now in its third round of layoffs in four years. A wing of the hospital has been closed simply because there aren’t enough patients to fill it. Cash on hand had been dwindling, and finances got so bad the hospital could barely keep up with bills it owed, from medical supplies to the Red Cross blood bank.

Fear that it could now lose patients to Haywood — if suspicions are true that Haywood has been anointed as the flagship of MedWest — proved too much for Jackson doctors to bear. It’s entire model had been thrown into uncertainty, and a sense of panic set it.

“What Carolinas did was put us in competition with Haywood inside MedWest. Harris has to keep every patient it can to survive itself,” said Dr. Bob Adams, a hospitalist at Harris for 36 years who has decided to leave the hospital.

Not everyone shares that view, however.

“I certainly don’t get a sense of significant friction between the two,” said Steve Heatherly, the president of Harris.

For its part, the Haywood medical community doesn’t feel that way either.

“There is no friction, no competition,” said Dr. Marvin Brauer, the chief of staff at Haywood and a hospitalist there.

But, Brauer does think the two neighboring medical communities could do more to bridge the county line between them.

Every hospital has regular monthly meetings of its doctors. Since uniting under the MedWest venture, the doctors in Haywood and Jackson had not taken steps to hold periodic joint meetings of both hospitals, something that may change now.

“I think we should start to try to integrate the medical staffs even more,” Brauer said.

Circling the wagons

MedWest leadership sees one way out: buckle down and reclaim market share it has lost to Mission.

“The whole goal for us to join together was to take back some of the market share in our communities,” Dr. Chris Catterson, an orthopedist at Haywood, said.

That alone could solve everything.

“If we were each getting a reasonable market share, about 70 percent, there would be no problems,” Brauer said. That would mark about a 10 percent gain over the market share they have now.

Dr. Richard Lauve, a national health care industry consultant and analyst, questioned whether the strategy jives with the unstoppable reality that health care is consolidating.

“You can’t win back market share in a consolidating marketplace. A growth strategy is not one that wins,” said Lauve, with L&A Consulting based in Louisiana.

Granted, community hospitals have arguable advantages that resonate with patients, even when going head-to-head against the big guy next door.

“These are neighbors taking care of neighbors. The services are closer. You don’t have the cattle call mentality you get at the bigger facilities. Those are all advantages you can work to improve your position,” Lauve said. “But, they don’t move 10 percentage points of market share.”

That said, from a purely objective view, something has to give, Lauve said. Lauve was recently a guest speaker at a roundtable hosted by the Western Carolina Medical Society, attended by doctors and hospital CEOs from a dozen or so counties in the region.

Lauve’s answer was short and sweet when asked whether both Haywood and Harris could keep up their historical model: “No.”

Two mirror-image hospitals of that size simply can’t exist in neighboring rural communities 20 miles apart.

“You can’t repeat services that close together and make them both work,” Lauve said. “One of them will either fail completely and the other survive — or they need to sit down and make decisions about what makes sense for each community to have.”

In Lauve’s view, it’s time for those tough choices. And that might mean each hospital won’t have everything it had before.

“It is a political process — the interaction of human beings trying to figure out how to divide a pie,” Lauve said.

Fold or draw?

That’s one reason some Jackson doctors believe the right thing for their community is to get out and get out now. If one of the two hospitals is destined to get smaller, why keep heading down a path that is setting up their hospital to shrink?

Adams fears that die has already been cast.

“Harris devolves, and Haywood grows. It is not that they have anything against Harris. (Carolinas HealthCare) has an interested in right-sizing their components,” said Adams.

But, Jackson doctors say any strategy to make Haywood the new net to capture health care business from the rural western counties is flawed, because of the same long-standing geographic conundrum Haywood has always struggled under.

“You aren’t going to get most of the people in Western North Carolina to stop 25 miles short of Asheville to go to Haywood,” Hurt said. Once in the car and on the road, they’ll go the extra miles, he said.

Adams said it would take years to change the historical  patterns of patients. If their own community hospital can’t do it, they will just go to Mission rather than the community hospital in another county, which patients would see as merely a lateral move.

“It is not a suburb of Atlanta or Charleston or Charlotte where a whole bunch of people who are moving in from somewhere else without a history or tradition can be influenced by marketing where to go,” Adams said.

In recent months, Adams and a group of Jackson doctors have advocated walking away from MedWest and instead partnering with Mission.

A mercenary stance perhaps, but they hope Harris would be built up by Mission as a go-to hospital for the western counties, a catch-all for health care from the rural west.

Adams said he understands why Haywood’s medical community would see Mission as simply too close for comfort.

“I think the medical community in Haywood County would be very concerned about Mission because I think they would feel more threatened,” Adams said. “Clearly, because of the proximity, it is a bigger concern for the Haywood community than for Harris.”

But, Jackson should look out for Jackson first, he said.

“For each hospital and each community who is the best partner for that individual community? I think that the communities may have different perspectives about that,” Adams said.

Not all Jackson County doctors are sold on Adams’ line of thinking, however. Several voiced their trepidation toward Mission at a hospital-wide meeting of Harris doctors in January. Adams’ camp had called on their fellow doctors at the meeting to send a message up the chain to Harris’ board of directors: they were unsatisfied with MedWest and wanted to vet Mission as a prospective new partner.

A few doctors were not swayed, however.

“The people who voted against it were concerned about their perception of Mission’s behaviors over the past 20 years where they had been aggressive and wanted everything to come to Asheville,” Adams said. But,“We felt that Mission’s attitude had changed significantly.”

The game-changer, in Adams view, is the new CEO who took over at Mission two years ago, Ron Paulus.

The former CEO, Joe Demore, was seen as an empire builder, one who was interested in grabbing up smaller hospitals in Mission’s net to promote an Asheville-centric model. Demore was ultimately forced out after a vote of no confidence by doctors practicing at Mission.

When Paulus came on board, he immediately began touting a collaborative regional view of health care, with small community hospitals across Western North Carolina working together under one system.

Paulus maintains Mission doesn’t want to compete with the smaller hospitals but genuinely wants to let them keep their own patients except when Mission’s services are truly needed.

The claim has been taken with a grain of salt, however, particularly in Haywood where there’s evidence of Mission planting its own doctors in Haywood’s backyard to steal patients. Mission has also made offers to buy out existing doctors’ practices in Haywood.

Adams said MedWest is so obsessed with competing against Mission — even paranoid — that patients’ interests aren’t being put first.

“At some point the region has to decide whether they want a competitive or collaborative health care system,” Adams said.

What might look like collaboration to Mission might look like undermining local health care to others, however.

Ultimately, the board of directors for both Harris and the MedWest system have thrown their support behind the current model.

“The boards have essentially said the organization of MedWest is the structure they are committed to at this time,” Heatherly said.

Haywood doctors agree it is the best route forward.

“We think the best thing for our communties is to be under one umbrella serving our communities of Haywood, Jackson and Swain,” said Dr. Chris Catterson, a Haywood orthopedist.

What now?

While the call by Jackson doctors to withdraw from MedWest seems like a shot across the bow to their neighbors in Haywood, Jackson doctors said they didn’t intend it that way. They aren’t questioning the quality or caliber of health care at Haywood’s hospital or by Haywood doctors.

Simply, they don’t think Carolinas HealthCare — the major hospital network managing MedWest — truly has their best interest at heart. Carolinas, as the new variable in the equation, has born much of the criticism from the group of Jackson doctors.

Carolinas has 34 hospitals in its network. Some it owns outright. Others, as with MedWest, pay Carolinas an annual fee for its management services and the benefit of being part of a larger system.

Carolinas’ interest in MedWest goes beyond that annual fee, however.

The more patients it represents, the more leverage it has when bargaining for better reimbursement rates from insurance companies and the federal Medicare and Medicaid programs. Those reimbursements have been dwindling, and what insurance and Medicare are willing to pay often no longer cover the actual cost of providing the health care. Ultimately, that’s the driver in the consolidation of healthcare and jockeying for market share.

“They are playing the corporate practice of medicine,” Adams said. “I don’t want to be a pawn in somebody else’s power struggle and be used as a widget in a big business’ plan for their benefit.”

But that’s the reality, said Lauve, the health care industry analyst. Things won’t go back to the way they were.

“Be a part of the change instead of resisting or ignoring it,” Lauve said, encouraging physicians to engage in the process.

“If you believe the fundamental driving forces are not going to go away, the peaceful coexistence of yesteryear is not an option. You are ignoring the elephant in the room. You are saying ‘I just want to get in another five years until I retire,’” Lauve said.

There’s two strategies left: compete head-to-head or collaborate.

“If you compete, one loses and one wins, but even the winner is worse off five years later than all the systems you compare it to that chose to collaborate,” Lauve said, citing a case study by the Voluntary Hospital Association.

Or, “You can figure out a way to collaborate and be part of the system that rationalizes how care is delivered,” Lauve said.

Miriam Schwarz with the Western Carolina Medical Society said physicians would much rather be taking care of patients but have found themselves trapped in a microcosm of a much larger national debate.

“I think the fact that physicians are so isolated and don’t have the opportunity to communicate across county lines, that has exacerbated the polarization that has been created by the institutions,” Schwarz said. “All they know is what their institutions are telling them but haven’t talked to their counterparts to get the whole story.”

Schwarz said physicians across the region need to come together — rise above it all so to speak — and work collaboratively, something the Western Carolina Medical Society hopes to serve as the mechanism for.

Previously, the organization was known as the Buncombe County Medical Society, but a year ago, it changed its name to reflect its regional mission. It has 900 members, with 125 now from outside Buncombe County.

“One of the goals we have as a regional medical society is to cultivate physician-to-physician dialogue in a safe setting,” Schwarz said. “Hopefully, physicians can put aside the politics and institutional affiliations and the pressures that are put upon them by those institutions and really focus on excellent patient care.”

Two months ago, doctors from more than a dozen hospitals in the region came together for an all-day summit at a country club in Haywood County in hopes of bridging the divide. Schwarz said it gave her hope.

“When they are sitting across the table from each other, the posturing that happens when people are really afraid or concerns about how to practice medicine in this chaotic world melt away,” Schwarz said.