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Thursday, March 28, 2013

Banko: It's not just about dollars: UPDATE

Posted By on Thu, Mar 28, 2013 at 3:52 PM

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  • St. Vincent CEO Peter Banko

St. Vincent Health CEO Peter Banko said in an interview today that the decision to affiliate with the University of Arkansas for Medical Sciences will not be made on savings alone — the $38 million to $63 million estimated by a Deloitte Consulting study isn’t so great that it’s a deal-maker — but also on the ability of the third-party affiliated entity to expand.

Banko insisted that he did not know if the affiliation will go forward because he hasn’t seen the term sheet — the first draft of how the affiliation would work — that is being drawn up by UAMS’ independent legal team. He said the term sheet should be ready next week; the St. Vincent board of directors and Banko’s leadership team will review it and both entities will create a business plan for going forward.

But if sources are correct, Banko is sure enough that he has asked orthopedic surgeons who are not affiliated with either institution to come on board. I have left a message with Banko's office for comment on the information. UPDATE: Banko confirms having dinner with orthopedic surgeons a couple of weeks ago, but said they were with Arkansas Specialty Orthopedics, which partners with St. Vincent, and not unaffiliated doctors.

Banko and board member Baker Kurrus expressed frustration with the Arkansas Times today for its coverage of the hospitals’ efforts to combine services, with Banko calling the Times “anti-Catholic” for continuing to raise concerns about the conflict in the Catholic Directives on women’s health care and end of life issues with public hospital policy for both patients and employees. He said the hospitals' agreement to explore an affiliation spelled out that no change to women's health services would be made.

The Times does not believe that raising concerns about the affiliation is anti-Catholic. Until the term sheet spells out exactly how the affiliation is to be governed — will the newly created board be split 50-50, as a memo sent to UAMS employees said or will St. Vincent have the upper hand? — how can the hospitals promise that there will be no reduction in services that the Catholic Directives prohibit? Catholic Church leaders have raised objections to a variety of combinations of institutions in other cities when institutions that joined with Catholic hospitals intended to provide medical services disapproved on religious grounds.

(A side note from Max: As yet, no church official has said how the church might react to a blended Little Rock institution, jointly governed, that included a public affiliate offering services to patients or employees which the church does not approve — birth control pills, abortion, in vitro fertilization, patient directives on end of life decisions, tubal ligations, vasectomies, morning after pill dispensation to rape victims in emergency rooms, abortion training at UAMS and more. I don't think it unfair to raise these questions as long as final answers aren't known. This is particularly true since the deal contemplates state support for a private institution that holds itself exempt from federal law mandating preventive health care coverage, including birth control pills for its employees. Is that good public policy for the state?)

Baker Kurrus said hospitals everywhere must create cooperative ventures to survive cuts in reimbursements from the federal government, and said that, on its face, collaboration between a religious institution and a public one presented no greater constitutional challenge than tax dollars going to faith-based mentoring programs, for example. “There’s no ulterior motive,” he said. "Institutions of this size are going to have to be more efficient," he said, to make sure their "capital is employed properly." It makes no sense for expensive equipment to lie idle at either hospital, for example.

The Federal Trade Commission will have to review the affiliation to make sure its potential market share does not pose an unfair competitive advantage over other hospitals. (Banko said that St. Vincent and UAMS each have about 20 percent market share.) The University of Arkansas Board of Trustees will have to OK any affiliation that UAMS enters into. The bishop of Arkansas will have to approve the Catholic institution’s plans. Banko is not worried about a stay from the church. “We have a good enough relationship,” he said, “that we can each work through anything together.” To not find ways to become more efficient and keep growing would “diminish the Catholic ministry,” he said. Besides, Banko said, “there’s more congruence than meets the eye” between UAMS and St. Vincent, and he noted that Catholic Health Institutes (which owns St. Vincent) partners elsewhere with Lutheran, Jewish and public hospitals.

St. Vincent and UAMS "are neighbors," Banko said, with only a golf course and a stadium separating them, and that a collaboration would "grow education and research," adding that CHI might contribute research dollars to the affiliated entity.

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