May 14, 2008

At Old North Knoxville’s May 12 meeting, Dr. Jerry W. Askew, Senior Vice President for External Affairs for Mercy Health Partners, spoke to the assembled crowd about the merging of St. Mary's and Baptist health systems. Dr. Askew began by noting the five things that are “unique” about the hospital business: 

• The more competition there is between hospitals, the higher medical costs rise
• Doctors are not actually employed by hospitals
• The “consumer psychology” for medical services differs in that only one out of nine customers are willing to change doctors
• Hospitals cannot set the price for medical services
• Hospital services are provided regardless of the ability of consumers to pay

As of 5-12-08, Mercy was 138 days into the merger, and is losing “3 to 4 million per month” as a result of taking on Baptist, according to Dr. Askew. By August 1, 2008, all inpatient services will be at St. Mary’s Medical Center on Woodland Avenue. For the time being, outpatient services and imaging will continue at Baptist of East Tennessee. Five years from now, not withstanding some unforeseen circumstances, everything will move to the new proposed hospital (“Mercy Medical Center’) that will be built where Baptist is now. Baptist as we know it now will be nearly all demolished over the next few years, leaving just the offices closest to the Gay Street bridge. Dr. Askew said that the buildings slated to be torn down are “not functional.” Baptist MDs are expected to move to Baptist West during this time of transition. After it is built, St. Mary’s Medical Center on Woodland will be shut down.

Dr. Askew said that Mercy realized that they needed a “south” market in Knoxville, because they already have the “north” market covered with the Emory Road facility (St. Mary’s Medical Center North). In Knoxville’s highly competitive market, Baptist was very vulnerable to being “attacked” by a for-profit hospital system (because it was hemorrhaging money – currently $200M in debt) and that is was just a matter of time before St. Mary’s Medical Center on Woodland would be the next “victim” – probably within the next ten years – even though it is showing a profit, now. UT Hospital is not exposed to this same “threat” because it is a Trauma One facility and a teaching hospital, he noted. He pointed out that it was a good thing that Mercy came in instead of a for-profit hospital system, because most likely services would have been eliminated in order to bring Baptist back into the black. Mercy, on the other hand, will attempt to “consolidate services” to avoid unnecessary duplication that takes away from the bottom line.

A Baptist doctor in the audience expressed concern that the patients in this area will not have enough facilities to serve them once St. Mary’s on Woodland is taken off line, such as the dialysis patients. Moreover, she noted that St. Mary’s North and Baptist West are not well supported as compared to the St. Mary’s on Woodland, especially with regard to cardiac surgery. Dr. Askew replied that “only seven or eight minutes” on average would be added to the hospital trip by forcing near-North Knoxville residents to go across the river to the new hospital, and that in general, patients will follow their doctors when they move to St. Mary’s North or the new Mercy Medical Center. Many people in the audience disagreed, however, saying that they would rather change doctors than drive a much greater distance for medical care. The aforementioned MD added that indeed, sick people will have no choice but to follow their doctors (the “eight out of nine” that “don’t change” as indicated by Mercy’s data), but healthy people (mostly everyone sitting in the audience) represent the smaller percentage that will buck this trend. Others remarked, with disappointment, that the location of St. Mary’s on Woodland had influenced their decision to buy a home in Old North, to avoid the “suburban sprawl” model of having to drive great distances from home just to get to work, their doctor, and other services. 

When asked about the current value of the St. Mary’s property, Dr. Askew said that this was being currently assessed, but is “worth a lot less than people think.” There are 18.5 contiguous acres, and two major buildings, the tower that houses the physicians’ offices and another building, are not owned by St. Mary’s. These would need to be bought back from the current owners in order for Mercy to divest of the St. Mary’s property in its entirety. However, Mercy is committed to saving the historic part of St. Mary’s, Dr. Askew said.

Uses for the St. Mary’s facility that have been suggested include a new college, a YWCA, a United Way non-profit community center, a new location for what is now Lakeshore, UT housing, a Shannondale-like facility, a middle school, or a VA hospital. Dr. Askew emphasized that Mercy is looking for a “positive use” that would “not be a detriment to the community.” There is a possibility that urgent care will remain at St. Mary’s on Woodland, or a “free-standing emergency room” attached to a surgery site. He added that Jeff Ashin (CEO of Mercy’s metro division) was misquoted in the March 23rd News-Sentinel story about turning St. Mary’s on Woodland into “low-income housing” that is “compatible with the community.” 

On Monday, May 19, Mercy representatives will meet with the community at Fulton High School starting at 6:00 PM.