George Anderson’s Ethics in Government Group alleges that the “acquisition” of Polk Medical Center has created a virtual monopoly in the provision of healthcare that would not pass muster with antitrust authorities.
The complaint claims significant barriers exist, through the Georgia Certificate of Need process, which prevent other hospitals from extending their reach into Polk County to off-set the “great anti-competitive harm” that Anderson claims would be certain to result from the new arrangement be-tween the Floyd Medical Center and Polk County Medical Center.
A memorandum of understanding for the lease of the Polk Hospital by Floyd was signed at the end of August 2011.
Floyd has agreed to lease the existing hospital for five years and pay for the construction of a new hospital.
The new hospital will be owned by the Cedartown-Polk County Hospital Authority and leased to Floyd for an additional 35 years.
Anderson’s complaint centers around a land deal brokered between a then Wells Fargo broker Frank Shelley and Floyd Healthcare Management in early 2009. Floyd Health-care management purchased approximately 8.1 acres along U.S. 278 in Rockmart for $2.435 million.
Less than two months later Shelley was appointed to the Cedartown-Polk County Hospital Authority in August of 2009.
“I believe the fix was in from 2009,” Anderson told the Rome News-Tribune.
Stroudwater Associates, the consulting firm hired by the Cedartown-Polk County Hospital Authority to assist it with a determination of how to move handle the future of the Polk hospital, notified Floyd Medical Center President Kurt Stuenkel that it was soliciting interest from selected parties in acquiring the Polk Medical Center in a letter dated January 14, 2011.
When Floyd made it’s proposal to Stroudwater, it provided a “Comfort Letter” from Wells Fargo detailing Floyd’s ability to fund construction of a new hospital, through debt financing if necessary.
The relationship between Shelley and Wells Fargo along with the bank’s agreement to provide capital for the new hospital, Anderson said, raises serious questions.
Anderson also alleges the deal enhances Floyd’s bargaining position in negotiations with various health care plans to the detriment of bottom-line health care service consumers.
He claims that taking away the competitive nature of the relationship between Floyd and the Hospital Corporation of America, which has leased the Polk Medical Center for the past 15 years will have a negative impact on health care costs.
Click here to read full story.