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CURRENT STORIES


Merger talks dominate UHC hearing

by Nora Edinger

REGIONAL EDITOR

CHARLESTON -- The possibility of a merger between hospitals in Clarksburg and Fairmont loomed large during a Monday hearing in which United Hospital Center pursued a replacement hospital of its own on Interstate 79.

A hearing before the state Health Care Authority -- which can approve or deny UHC's project but cannot force a merger with Fairmont General Hospital -- continues today and Wednesday in Charleston. An authority decision may not come for months.

Talk of a merger first occurred during a two-hour opening presentation by Bruce Carter, UHC president and chief, and UHC attorney Robert O'Neil. It also was a key conversation topic during a lunch break in which UHC project proponents and opponents lingered close at hand because of flash flooding occurring throughout Kanawha County.

"Volume has major impacts on the cost," Carter said of merger talks that broke down earlier in UHC's pursuit of a certificate of need for a replacement hospital. He said a merger would reduce immediate construction costs -- Fairmont General is pursuing a separate replacement facility on I-79 -- and long-term operating expenses because of a consolidation of services and staffs.

"We felt that this was a huge, one-time opportunity. ... We still do," Carter said.

Outside the hearing, Fairmont General's president and chief said officials there also consider a merger a continuing possibility -- under certain conditions. Richard Graham said that hospital particularly would want more input on the site of a merged hospital and would be interested in an auxiliary clinic that would serve the downtown Fairmont area. Without such concessions, Graham said UHC's offer of 50 percent ownership and board control is not a merger but a takeover.

Graham believes the authority will deny both replacement projects, however, and said, "that brings an opportunity to talk."

Although Fairmont General is much smaller than UHC, which is the fifth largest hospital in the state, Graham said its proposed purchase by the for-profit Triad Hospitals of Texas may even lead to it introducing a merger proposal of its own should that happen.

"I don't think that anyone's going to get what they want," Graham said. "I think there's going to have to be some major compromises, some concessions and changes in design, location and size."

The authority's chair, Sonia Chambers, and its attorney, Marianne Kapinos, also raised questions about the merger. Kapinos wanted to know why UHC officials waited to begin talks until a land deal for a hospital site of their own choosing was under way. Carter said UHC did not know of Fairmont General's competing plan until that point.

Attorney Charles Dunn, a consumer advocate from the state Insurance Commission, also asked Carter about the merger concept. During that part of the cross examination, Carter said a merged hospital would allow such expanded services as open-heart surgery and high-risk obstetrics, things not offered anywhere in the North Central region except in Morgantown.

The proposal at hand

In the absence of any formal merger proposal, Carter told the authority if it has to chose between the projects, it should pick UHC's.

He said the hospital is in excellent financial condition and can float a replacement with a rate increase that would still leave it in the bottom half compared to other state hospitals with more than 100 beds. The $265 million UHC proposal, which includes $184 million for construction alone, would be linked to a 7 percent increase spread out over three years.

He and O'Neil presented a long list of reasons a replacement facility is needed. They sometimes painted a grim picture of a land-locked hospital that has sewage backing up into its basement, five-ton concrete blocks falling off its parking garage and outpatients meandering through a "crazy-quilt layout."

Thomas Casto, an attorney for Fairmont General, countered that image during cross examination by asking if UHC is having problems with fire department or civic code violations or its hospital accreditation. Carter said it is not.

But, Carter said, there are numerous code violations that would have to be fixed if an alternative plan -- a $144 million addition and remodeling combo -- is pursued. Part of that cost is an estimated $10 million it would cost to buy out and purchase a replacement facility for the adjacent Star Motors, which owns the only land that Carter said could be used for an addition.

Casto heavily questioned the cost of the addition/remodel option, which, during an earlier part of the planning, was estimated as low as $41 million overall. Carter said the earlier figures were based on amateur, in-house planning and the $144 million figure was from a national hospital contractor.

Under additional cross examination by Casto and Chambers, Carter said UHC officials picked a site at the intersection of I-79 and W.Va. 279 for logistical reasons, not predatory ones.

"You'd have to be out of your mind to build a regional hospital our size ... and put it on a road like Davisson Run. You put it on an interstate," Carter said.

He added UHC does seek to expand its market share, including in Marion County, but said ease of access to transportation and utilities were the deciding factors. UHC looked at 15 other sites, including a preferred one at the Charles Pointe development near the same intersection. That one was ruled out by consultants concerned about noise pollution from the nearby Harrison-Marion Regional Airport, he said.

In an unrelated portion of cross examination, an attorney for the Associated Builders & Contractors quizzed Carter on a labor agreement UHC has already entered into with union tradesmen. The AB&C represents non-union contractors.

Attorney Brian Yost predominantly wanted to know why UHC had struck the agreement and if it would increase project costs because union wages are generally higher than non-union ones.

Carter said the agreement was pursued to avoid work stoppages, the spread of ill will in the community and lack of guaranteed access to workers of sufficient quantity and quality. He said UHC recently did a non-union project, the Maplewood continuous-care retirement community in eastern Harrison County, and had problems with all of those issues.

UHC's presentation continues today with the testimony and cross-examination of the hospital's expert witnesses.

Regional editor Nora Edinger can be reached by phone at 626-1447 or by e-mail at nedinger@exponent-telegram.com.