Covenant CEO vows to fight Carle's bid to 'control' market

Covenant CEO vows to fight Carle's bid to 'control' market

URBANA — Presence Covenant Medical Center officials say they're objecting to more than just a bigger Carle Foundation Hospital in its 48-bed expansion plan.

They're fighting off an attempt by Carle to put Urbana's smaller hospital out of business.

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A June 24 letter from Carle CEO Dr. James Leonard to Sandra Bruce, the CEO of Covenant parent system Presence Health, included a proposal to convert Covenant into a joint-venture behavioral-health facility with Carle and for Carle to buy Presence United Samaritans Medical Center in Danville, said Dr. Jared Rogers, interim president and CEO of Covenant and United Samaritans.

"Our thinking is they (Carle) really do want to control all the medical services in this area," Rogers told The News-Gazette on Monday.

Presence Covenant transforming into a behavioral-health facility, Rogers also said, "is not in our plans."

Carle's newest proposed expansion — currently stalled before the state's Health Facilities and Services Review Board — would be a $17.7 million conversion of vacant ninth-floor tower space to add more medical-surgical beds.

The project would expand its total medical-surgical beds from 212 to 260 and boost its total licensed-bed capacity to 393.

Covenant Medical Center vigorously fought the proposal at a state board hearing last week, and the board declared an intention to deny permission for the additional beds. However, Carle says it will be returning to the board with more information at a later hearing to try again.

Rogers said Leonard's letter to Bruce, which hasn't been shared publicly, was received by Presence Health too late to be included in documentation that was submitted to the board.

Carle Vice President Mike Billimack said the letter to Presence Health leadership was "entirely separate" from its petition before the state board.

"Carle recently sent Presence leadership a letter inquiring about potential interest in their Danville hospital and/or their interest in developing a joint behavioral-health facility in Champaign," Billimack, Carle's VP for marketing, planning and government relations, said in an email to The News-Gazette. "Carle has made a long-term commitment to providing services in Danville and Vermilion County. Carle is always interested in supporting and growing the level of services available to Vermilion County residents, and we will continue to explore ideas that benefit area residents."

Billimack also said a recent community health-needs assessment Carle did with Covenant and "other local entities" identified, as expected, the issue of behavioral health as a critical need in the community.

"The idea of developing stronger behavioral-health services is one the community would clearly welcome," he said. "As the regional clinical safety-net hospital, we are always interested in exploring potential opportunities that would benefit the communities we serve."

Carle's request for more beds is about ensuring that beds are available for specialty care that isn't currently provided by other regional hospitals, "including the types of specialty care that Presence chooses not to offer," Billimack said.

But if Carle is permitted to add the extra beds, Rogers said, most of the extra patients to fill them would be drawn from Covenant, and the effect would be devastating. The 48 beds Carle wants to add equals Covenant's entire average daily number of medical-surgical patients in the hospital, he said.

The state board said there is already an excess capacity of 158 medical-surgical beds in the area that includes Carle and Covenant.

Dr. Krishnarao Tangella, Covenant's and United Samaritan's regional medical director of laboratory, contends that Carle would be adding even more excess capacity and would be allowed to grow at the expense of other hospitals.

"That's probably not the most efficient way to use $18 million," he said.

And, Rogers added, "it's the consumers who pay the $18 million."

Urbana Mayor Laurel Prussing has been making her objections to Carle's plans known, saying her position is based on "the concern expressed by Presence (Covenant) that this is going to kill them."

Prussing said she believes Carle is trying to drive Presence Covenant out of business, and she contended that any move by the board to help that along will drive down competition and leave the public more vulnerable to "price gouging."

"If the purpose of this board is to not duplicate services and to benefit the public, the public is not going to be benefited by reducing competition in the market," she said. "I think we've been gouged already, and the state should not be making it worse."

Several area hospitals have taken sides on this project, with United Samaritans and Iroquois Memorial (managed by Presence Health) joining Covenant in objecting and Paris Community Hospital, Kirby Medical Center, Richland Memorial Hospital, Decatur Memorial Hospital, Carle Hoopeston Regional Health Center and Crawford Memorial Hospital all supporting Carle.

Kirby Medical Center CEO Steve Tenhouse said Carle has been a good partner for the Monticello hospital.

Plus, he said, "the majority of what we're transferring to Carle is beyond the level of care that we provide here."

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EdRyan wrote on July 22, 2014 at 8:07 am

A planned economy worked so well in the former Soviet Union, it should certainly work as well in the health care industry in Illinois.

BlahBlahBlah2013 wrote on July 22, 2014 at 8:07 am

What I've been saying all along. Carle wants to have a monopoly in medical services in central Illinois. Add to that the fact that they own Health Alliance and you should see how extremely dangerous this is for the consumer of health services.


Carle's $205 double billing, a.k.a. price gouging, is a perfect example of too much power in the market. Just wait until the U of I and Carle start a medical school here in CU. Carle will be able to do as it pleases, as if it doesn't already. The taxpayers already pick up the tab in the form of higher property taxes but if you think that's bad, go ahead and support a stronger, more powerful Carle.


 


 

rsp wrote on July 22, 2014 at 8:07 am

So what, Carle, who has refused to provide care for adult psych patients unless they have the "right" insurance had to do a survey to find out there was a critical need in the community that wasn't being met? Where do they think all those poor people will go if Carle suddenly controls the market? As it is, when a patient comes into their e.r. needing medical care and they display psychological issues, they have them arrested. No treatment in jail. Covenant has always been willing to treat the whole patient.

CU2012 wrote on July 22, 2014 at 9:07 am

Carle needs to be stopped at all costs there a big bully trying to do what it can to be the only player in this town, time to boycott this hospital, its clinic's and even there ambuance service.

sillybickering wrote on July 22, 2014 at 9:07 am

There's a huge problem with Covenant's claim of 158 extra med/surg beds in the area. Covenant is the problem. Covenant is licensed as a 210 bed hospital and has been for many years. In the 1990's and early 2000's Covenant boasted very high inpatient numbers. However, in the last 8 - 10 years they have drastically reduced their actual, physical number of beds and their staff, yet maintained the same 210 bed licensing. The vast majority of their patient rooms are meant for and licensed as double occupancy, But, in a PR ploy and because of their financial struggles, they made them all single occupancy rooms. So, on paper there are excess beds. In reality, Covenant only has the beds and staff for 50 - 75 inpatient's on any given day. This is evident in their letter of opposition stating their ADC of only 44 patients. Meanwhile, Carle is busting at the seams everyday.  Covenant's inabilty to actually provide the beds for 210 patient's isn't Carle's fault, but Carle has to make up for the difference.

BlahBlahBlah2013 wrote on July 22, 2014 at 10:07 am

All of these facts are more or less meaningless. Beds...single....double....whatever. The point remains that Carle has every intention of controlling the market. And if you know anything about economics you should know this isn't good for the consumer. It's also illegal to deliberatley attempt to drive out all competetion and for good reason. Monoplies have unchecked pricing power and in healthcare that is a very serious issue. A good example is charging $205 to simply walk through their prestigious doors. However, a true monopoly would result in much greater price gouging by Carle.


I really want to support Carle but they just make it so hard to do so. Carle is absolutely entitile to try and maximize profits. They are after all a business. But they have to do it in a legal and responsible manner. I love the idea of a CU Medical School but Carle is an example of a bad corporate citizen, in spite of being a large employer, and this will simply make them exempt from any law or oversight. Not sure exactly how you change a culture of greed and arrogance. It usually starts at the top but I'm afraid it's a culture so full of itself that it might be too late.

Deb Pressey wrote on July 22, 2014 at 10:07 am

Thank you for your comment. Following is some information that wasn't included in the story, as it was running fairly long:

Dr. Rogers said in our interview Monday that about 48 is Covenant's average daily census for medical-surgical patients, and a figure in the 40-range referred to in its letter to the state board likely refers to medical-surgical census since medical-surgical beds are at issue.

He also said Covenant is typically staffed for an average daily census of 100 (which would include all areas of the hospital) and calls in part-timers as needed when the census rises.

 

EdRyan wrote on July 22, 2014 at 10:07 am

This hospital cage match has been going on for at least the last 40 years and it used to be about three hospitals.  Carle was a regional care center then and is even more so now.  People don't travel from Paris, IL and Milford, IL to go to Covenant, but they do to Carle.

rsp wrote on July 22, 2014 at 11:07 am

People do come from out of the area to Covenant, you're just not aware of it as much. In fact, I've known of people who were being treated at Carle after a trauma who were then transfered to Covenant for inpatient therapy. Most recently, a family member of mine was transferred from Sarah Bush to Carle. When his doctor felt there was nothing more they could do for him, they moved him farther away from family to die the next day, but at least he didn't die at Carle. It's like musical chairs.

Sid Saltfork wrote on July 22, 2014 at 5:07 pm

More attention should be paid to the mission statements of both hospitals.  I prefer Presence Covenant for that reason.  During my employment prior to retirement; I saw many examples of Carle's "price gouging", and lack of caring.

Gyaku67 wrote on July 26, 2014 at 7:07 pm

Agreed Sid. With Carle, actions speak louder than words. And they certainly say one thing and do quite the other.


 

ilmsff7 wrote on July 22, 2014 at 5:07 pm

Link to Billimack's entire statement: http://www.news-gazette.com/news/local/2014-07-22/carle-issues-statement.html

I find it interesting that Presence accuses Carle of trying to put them out of business, yet in 2013 Presence transferred 1,200 patients to Carle.  That tells me that 1) Presence is bursting at the seems with patient population and needs Carle to take the overflow or 2) Presence doesn't have the ability to treat some of its patients and sends them to Carle. Either way, that shouldn't be a reason for Presence to oppose the Carle expansion plan.

rsp wrote on July 23, 2014 at 12:07 am

That's not from one hospital, that's from all of the area branches of Covenant Hospital. Have you seen stories where someone has been injured in Danville and taken to Presence United Samaritans to be stabilized and then flown by chopper to Carle in Urbana because Carle is the trauma center? If someone is severely burned around here they send them to Springfield. That's where the burn unit is. Carle is doing a PR tour, read closely. They want to open that wing. When they talk ask yourself what they want. And how much it will cost you.

Skepticity wrote on July 23, 2014 at 12:07 pm

Please don't act as though big, bad Carle is picking on little Covenant Hospital.  Covenant is part of a large medical group. 

From a February 2012 press release: 

"Presence Health is a family of Catholic, not-for profit, healthcare services providing advanced medical care and exceptional service with compassion and hope.  With locations in Chicago and its collar counties, as well as in East-Central Illinois, it is the largest Catholic health provider in Illinois, encompassing 12 hospitals, 29 long term care and senior residential facilities, numerous outpatient services, clinics, home health services, hospice, private duty, and comprehensive Behavioral Health services. "


 

I do not have a problem with Covenant filing an objection in this process.  I would expect a competing business to act in the best interest of their business, and Carle is a competitor. 

I do have a problem with the mayor of Urbana meddling in this, adding her rancor over Carle re-establishing their historical tax free status.  The legislature passing the tax exemption bill is unrelated to this issue, and it is inappropriate for the mayor of Urbana to address the issue of additional beds.  I see no city role in the issue of additional beds at Carle, unless they are building in violation of code. 

I also question why some government entity has to approve adding some beds at a licensed hospital.  If the beds are not really needed (and who knows that for sure?) then Carle will have made a poor business decision.  This is not an area in need of government regulation.  Hospital health and safety procedures and practices are an appropriate area to monitor, not hospital size.

enoughalready wrote on July 23, 2014 at 2:07 pm

Good point.  Presence is a huge system.  Presence has a monopoly in Danville...but they seem to be OK with that.   Sounds like they are whining because they have been out-competed in C-U.


If they are so worried about Carle why don't they hire physicians and add services to compete, rather than blaming Carle.  After all, they are bigger than Carle.