State OKs new hospital for Lee County

In the biggest state health care licensing decision in years, Georgia regulators have approved Lee County’s bid to build a 60-bed, $123 million hospital.

The certificate-of-need (CON) decision, announced Wednesday by the Department of Community Health, is being celebrated as a triumph for the southwest Georgia county and a significant setback to Phoebe Putney Health System, based in nearby Albany.

“We’ve been working on this for six years,’’ said Winston Oxford, director of the Lee County Development Authority. “This will create much-needed competition in our local market.”

Oxford told GHN that the hospital project would create 350 jobs and have a $38 million annual economic impact.

“As far as improving quality of life and economic development, this is probably the largest single event to happen in southwest Georgia in the last decade or two.”

There is an appeals period that lasts 30 days, but officials still plan to move forward with infrastructure plans, the Albany Herald reported. Lee County Commissioner Rick Muggridge said a special called meeting is likely in the next 24 hours to get that process started.

“We are just delighted,” Muggridge said, according to the Herald. “This is a long time coming.”

CON is the state regulatory apparatus governing health care construction and services in Georgia, as well as in some other states. Groups within Georgia’s health care industry, as well as municipalities within the state, often are at odds over such issues. Lobbying of the General Assembly by various factions leads to legislative fights over CON virtually every year.

Certificate-of-need decisions often spark appeals from opponents of specific projects, and the Lee County approval may draw a legal challenge.

Lee County

Opposing the Lee County hospital bid were the Dougherty County Commission, Crisp (County) Regional Hospital in Cordele, and the nonprofit Georgia Alliance of Community Hospitals.

Monty Veazey, president of the Alliance, said in a statement Wednesday to GHN that his group “is on the record opposing the Certificate of Need granted today by the Department of Community Health and we disagree that the application meets the established requirements under Georgia law.

“We remain concerned that this decision will have a detrimental impact on hospitals and patients throughout southwest Georgia,’’ Veazey said. “In a time where federal inaction on health care finance threatens the stability of all of our state’s safety net hospitals, it could undermine the financial stability of existing facilities, all of which are doing their best to keep their doors open. Georgia has lost six rural hospitals since 2013, and we cannot afford to make decisions that threaten access to our network of care.”

The Dougherty County Commission opposed the project because of the adverse effect the board said it would have on Phoebe Putney Memorial Hospital in Albany, the Herald reported.

“Well, that’s that. The county has no legal standing. The one who does is Crisp Regional. Other than that I have nothing say.” Spencer Lee, Dougherty County’s attorney, said after the decision.

Phoebe Putney itself had been prevented from opposing the project due to a settlement it reached with the Federal Trade Commission in 2015 over antitrust issues. The FTC contended that Phoebe’s 2011 acquisition of Palmyra Medical Center, an Albany competitor hospital, violated antitrust laws, reducing competition and potentially raising prices for consumers in southwest Georgia.

As a condition of the settlement, Phoebe Putney agreed that it and the local hospital authority could not oppose a CON application for a general acute-care hospital in the Albany area for up to five years.

The FTC, in fact, urged the state to approve Lee County’s CON bid.

For years, health care prices in southwest Georgia have been notoriously high compared with other areas of the state, a problem that experts have partly attributed to Phoebe Putney’s control over hospital care in the region.

Dougherty County is a low-income area, while Lee County has a much higher average income.

Phoebe Putney found itself indirectly in the national news during the first year of the health insurance exchanges.

Phoebe Putney

The Washington Post reported that southwest Georgia, where Albany is the major city, had the second-highest prices nationally in the insurance marketplace created by the Affordable Care Act, trailing only ski resort areas in Colorado.

A Phoebe Putney spokesman, Ben Roberts, said in an email to GHN that the decision by Community Health “is an important step in the Certificate of Need process, however, it is likely not the final step. The CON opposition has the right to appeal the decision.”

Roberts said Phoebe Putney is not involved in the dispute. “Throughout this process, Phoebe has abided by our voluntary consent agreement with the Federal Trade Commission, and we will continue to do so. We will not comment on the merits of the application or be involved in any way in a potential appeal,” he said.