Clarksville challenges county hospital moratorium

The stage has been set for what attorneys say could be a federal suit on a two-year hospital construction moratorium recently imposed by the Clark County Commissioners.

The Clarksville Plan Commission on Wednesday approved the development plan for a 42-bed acute care hospital proposed by a group of area physicians, led by cardiologist Dr. Chris Stavens. The doctors propose building the facility on U.S. 31, near the Lewis and Clark Parkway. Though not located directly on Veterans Parkway, the site is within the parkway's zoning corridor and requires special approval before work can proceed.

The group unsuccessfully sought approval for the hospital in neighboring Floyd County, but found Clarksville officials, who question whether the county commissioners' action is legal, more receptive

Douglas Kell, the chief financial officer for the physician's group CHA, and attorney Mike Naville represented the doctor's at Wednesday's plan commission meeting.

Naville said the facility will be located on 23 acres north of Veterans Parkway and fronting U.S. 31. The hospital will include an emergency room and will always be open.

The attorney said the hospital's developers are willing to work with the town in a joint venture to operate an ambulance service, something the Clarksville Town Council has discussed in recent years.

Naville addressed the county commissioners' moratorium and explained additional hurdles must be cleared before the facility can be built.

"The Clark County Commissioners, four to six weeks ago, passed a moratorium to stop development of new hospital facilities in the county," he said. "This is something that is going to have to be addressed, most likely in the federal courts."

Naville said the county commissioners based their moratorium the state's home rule legislation, which allows local governments to enact legislation that is not prohibited by state law. The attorney said the prohibition on hospital construction is an abuse of the home rule law and constitutes the "restraint of fair trade."

Town Attorney Sam Gwin agreed with Naville's assertion that the county's moratorium is an abuse of the home rule clause.

"The State of Indiana has specifically reserved for itself the right to control the operation and licensing of hospitals in the state of Indiana, and that would specifically preclude counties exercising any control over the development of hospitals," Gwin said.

While Gwin agrees with Naville's concerns over the moratorium, he informed the plan commission that it's approval only related to land use and that the facility's construction must be worked out between the doctors building the hospital and the Clark County Commissioners.

Kell said the hospital will cost approximately $14 million to construct and $8 to $10 million for equipment. He said the facility will employ about 90 "full-time equivalent" employees and another 60 part-time workers.

He said the physicians are willing to enter into a pact wherein they would stipulate that the facility would make a payment in lieu of taxes if it ever transitions to a non-profit status.

The hospital, Kell said, will serve a population that predominantly utilizes Louisville hospitals now, based on referrals of the physicians in the medical group that want to build the facility. "Roughly 80 percent of our patients are presently being treated in Louisville hospitals," he said. The facility would also build in a 5 percent budget item for indigent care.

Pat Thompson, a member of the Clark Memorial Hospital's board, asked whether the facility would provide care to the county jail inmates as is required of Clark Memorial and whether the facility would provide services through a free clinics similar to those underwritten by Clark Memorial.

Kell pointed out that Clark Memorial, while it chooses to pay taxes on some of its out-buildings, pays no taxes on the main hospital building, and that the arrangement exists to compensate the hospital for some of the services it provides to the county, such as medical services to jail inmates.

Attorney Sandy Heeke, appearing at the meeting with Clark Memorial interim director Martin Padgett, asked the board to table the docket for the proposed Clarksville hospital for a month to allow for additional discussion.

"We only learned of this application this afternoon," she said.

Heeke said the county commissioners had already preempted the town's right to approve the construction when it passed the moratorium on March 10, in anticipation of a study that will consider the county's medical needs.

Naville called the two-year study a "stalling tactic."

Heeke said construction of a new hospital could have an ,"adverse effect on the county and could throw Clark Memorial Hospital into bankruptcy."

Padgett said, "I believe the moratorium is set out to protect the people of the county." He then cited American Hospital Association studies that state that physician-owned hospitals have damaged hospital service in other areas of the country by "cherry picking" patients who can pay and leaving the indigent to be treated by county hospitals.

Naville said the county commissioners enacted their moratorium after hearing only from Clark Memorial Hospital representatives.

The Plan Commission approved the matter in a 6-1 vote with commissioner Cary Stemle abstaining. He said he wanted additional discussion before voting on the measure.

The approval allows the hospital group to proceed to the design phase, but does not clear the way for construction. Additional hearings are required before that stage can be entered.