BY ANDY TAYLOR
INDEPENDENCE — Parsons-based Labette Health on Monday officially proposed creation of a medical emergency department in Independence, with the City of Independence using $3 million in bonds to fund the construction or placement of that emergency department in the community.
The formal presentation of Labette Health’s proposal, which was held at a special meeting of the Independence City Commission on Monday, represents another change in the ever-evolving nature of medical coverage in the Independence community since the closure of Mercy Hospital.
No action was taken following a two and a half hour discussion between Labette Health officials and the city commission. However, commissioners said they would discuss the matter in depth at their next regularly scheduled meeting, which will be held at 5:30 p.m., Thursday, Dec. 10 in the Veterans Room at Memorial Hall.
Among the key highlights of Labette Health’s proposal:
• Labette Health would establish a non-profit association to “manage, govern, protect, preserve, establish, own, operate, and maintain its assets to provide emergency and other healthcare services” to the Independence region.
• The association would be governed by a seven-member board. Three of those members would be appointed by the Independence City Commission. Three others would be appointed by the board of Labette Health. The seventh member would be the chief executive officer of Labette Health, who would serve in an ex-officio position.
• The association’s emergency department in Independence would include a minimum of five emergency department treatment rooms, CT and x-ray imaging, laboratory, and any other equipment and resources that are conducive to the operations of an emergency department.
• Labette Health would extend its existing hospital license into the yet-to-be-named association so that proper and legal licensing could be guaranteed in the emergency department.
• The City of Independence would obligate its $3 million in bonds, previously discussed in other medical proposals, solely for the purpose to construct or place an emergency department on behalf of the association. The City of Independence would retain ownership of that facility while the operations would be leased to the association.
• Labette Health would obligate up to $500,000 in excess of the $3 million in city bonds for the project.
• Labette Health would fund all operational losses of the emergency department facility in excess of $500,000. That means the City of Independence, through the proposed non-profit association, would be obligated to guarantee no more than $500,000 per year for 15 years as a stop-gap measure to curtail operational losses. If that $500,000 ceiling limit is hit, then 100 percent of the financial risk shifts to Labette Health.
Brian Williams, Labette Health chief executive officer, emphasized that off-campus emergency departments typically are not “profit centers” for medical providers. In fact, most emergency departments, regardless of their ownership, tend to lose money. Why then would Labette Health propose an emergency department when prevailing business models show it to be a financial risk?
“Because I believe our staff knows we can do it,” said Williams confidently. “This (Independence) is our only market. We have to be successful in what we do because we do not have 130 other markets across the nation to tap into.”
Parsons-based Labette Health, like other medical providers in the region, is looking to tap into the Independence market as a way to boost traffic in its own medical center. However, Williams and other Labette Health officials said the reason they are pursuing an emergency department in Independence also has to do with the increased volume of emergency department traffic at the Parsons hospital ever since the closure of Mercy Hospital in early October.
Additionally, activity in Labette Health’s Independence primary care clinic and urgent care, located in a commercial office building at Sixth and Laurel streets, has increased tremendously — leading Williams to propose construction of a new clinic facility in Independence regardless the outcome of its emergency department proposal.
“My utmost concern is to construct a new clinic for Independence because our existing facility simply can’t hold the demand,” he said. “However, what I need to know from the city commission is if it wants to partner on creating an emergency department. If so, then that will make a difference in whether Labette Health seeks a one-acre tract for a new clinic or whether it needs more land to include a clinic, emergency department . . . and have room for additional growth.”
Commissioners had plenty of questions about the proposal, all of which was discussed openly in public session. Williams was joined by other Labette Health officials at the commission table to discuss the proposal and the City of Independence’s financial obligations.
Commissioner Fred Meier appeared reluctant to dedicate the City’s tax funds and limited debt capacity to a medical project that poses financial risks.
“It’s going to cost us money . . . a lot of money . . . down the road,” said Meier.
Meier also noted that other medical providers, namely St. John Health System, Coffeyville Regional Medical Center, and Mercy Hospital, have said that an off-campus emergency department could not be supported in Independence. He asked why those medical providers believe an emergency department cannot work while Labette Health believes it can.
“Can this proposal be successful?” Williams asked rhetorically. “I can’t give you a guarantee. But, we’re putting the full weight and force of Labette Health behind it.”
Williams said one of the provisions in the proposal allows a departure clause, where, after the third year of the emergency department, Labette Health and the association can chose to sever its relationship and revert the facility solely to a clinic and urgent care. The City of Independence would still own the facility. However, the financial risk would be reduced — if that would be the decision of the governing board.
However, if that provision is not enacted after the third year, then the emergency department would be required to remain open through the duration of the 15-year agreement, he said.
Mayor Leonhard Caflisch had concerns and questions about how the $3 million in bonds, which have not been officially issued, could be used for the project . . . and if those bonds would require voter approval before they are issued. He also asked attorney Tim Emert, who was present at Monday’s meeting in absence of city attorney Jeff Chubb, to explore how the bonds that have been discussed in earlier medical proposals, would differ for the Labette Health proposal.
Commissioner Gary Hogsett also had questions about the proposal, noting the costs associated with it. He hinted at appointing a citizen task force to explore the proposal. He also questioned the timeframe for creating an election in which city voters might have a say on how the bonds could be used.
However, Meier indicated a desire to move ahead on the discussion.
“I think we need to make a decision ourselves very soon — good, bad or ugly,” he said.
Commissioners agreed to discuss the matter at Thursday’s commission meeting.
Because discussion during the meeting revealed that the City of Independence would be responsible for erecting an emergency department on behalf of Labette Health and the unnamed association, it rules out consideration for using the now-closed Mercy Hospital as a site for that emergency department. The Independence City Commission two weeks ago voted to continue discussions with Mercy Health System for the donation of the now-closed hospital to the City of Independence. City officials have indicated the newer portions of the hospital could be converted into municipal offices, thereby replacing the nearly 100-year-old City Hall at Sixth and Myrtle streets. Mercy officials have indicated it would provide some funds to asset the City of Independence with that conversion, provided that the offices would not compete with St. John Health System, the Oklahoma-based medical provider that is assuming some of Mercy’s primary clinic and imaging services in Independence effective Jan. 1, 2016.
Other facets of the proposal that were discussed at Monday’s meeting:
• Dr. Melinda Allen, former emergency department director at Mercy Hospital, has been hired by Labette Health to coordinate the emergency department project in Independence.
• Labette Health, through its hospital in Parsons, is allied with Freeman Health System, which is based in Joplin, Mo. Freeman Health System is initiating a physician training program whereby 150 medical students would come to Freeman for further study and practicum not only in Joplin but also allied facilities in Parsons and perhaps Independence.
“This would be a great training ground for the hiring of new physicians,” said Williams.
Caflisch ‘embarrassed’ by legal maneuver pertaining to Labette Health’s proposal
At Tuesday’s meeting, Mayor Leonhard Caflisch exclaimed embarrassment at a legal situation that raised its head in the minutes leading up to the meeting.
It’s still unclear what was at the core of the legal situation. However, Caflisch said city commissioners had received a letter from Topeka attorney Frankie Forbes, who represents the City of Independence in the healthcare discussions, advising the commission as to whether Labette Health’s proposal should be discussed openly or in executive session. While the letter was not disclosed during the meeting, Caflisch said Forbes advised that the proposal should be discussed openly because it does not fit within the privileges for an executive session, which is closed to the press and public. Forbes’ letter was presented to the commission immediately before it gaveled into session.
Previous commission meetings with all other medical providers had been held in executive session in order to protect the negotiations and confidential data of medical providers’ financial condition.
At Monday’s meeting, all details, including aspects of the usually-confidential Letter of Intent, were openly discussed.
“I am embarrassed,” said a red-faced Caflisch upon reading Forbes’ letter.
Attorney Tim Emert, who was filling in for city attorney Jeff Chubb, paused the meeting so he could confer privately with Caflisch and the legal counsel from Labette Health.
Once the commission learned that the negotiations, based upon Forbes’ recommendation, should be discussed openly, commissioners began a discussion but not before city manager Micky Webb placed his cellular telephone at the commission table.
“Is someone on the telephone?” Caflisch asked.
“Yes. Frankie Forbes is on the phone,” said Webb.
“Why is he even a part of this discussion in open session,” responded Caflisch.
“Okay, I’ll turn it off,” Webb said, after which he removed the telephone from the commission table.
Caflisch shook his head and appeared flustered at the situation.
Brian Williams, Labette Health chief executive officer, said it wasn’t customary to have negotiations discussed openly. However, in the spirit of transparency and openness, he was willing to air the negotiations openly.
“I’m not afraid to hang my laundry,” said Williams with a laugh. “I guess I’ll just hang it in the front yard instead of the back yard.”