Testimony before the Senate Health, Human Services and Aging Committee

Wednesday, Nov. 20, 2002

Senate Bill 309

   

Offered by Michael F. Curtin

Chairman of the Board

Mt. Carmel Hospitals

Columbus, Ohio

   

   

   

    Chairman Wachtmann, members of the Senate Health, Human Services and Aging Committee, thank you for your attention to this most vital issue.

    By your membership on this committee, you are as aware as anyone that few challenges facing our state are as crucial as the question of how we can provide high-quality, affordable health and hospital care to as many of our citizens as possible.

    This question, of course, is not a new one.

    Our predecessors grappled with it, and in times even more challenging than our own.

    In the few minutes I have, I would like to provide some historical context within which this issue must be examined and understood.

    And the point I would ask you to carefully weigh is that the system of full-service, nonprofit, community hospitals that we enjoy today in Ohio did not develop by accident.

    Our system of 170 community hospitals was the result of much hard work, much deliberation, much consensus-building, much philanthropy, voter support and careful public policymaking by your predecessors in the General Assembly.

    And this system — a system that has served our citizens well for so many decades — will be undermined if certain doctors, doctors who have a clear conflict-of-interest, are permitted — either by our actions or inactions — to divert massive resources from our community hospitals to their own profit-making, boutique, specialty hospitals.

    We must clearly understand the stakes involved.

    And we cannot properly understand those stakes without some appreciation of how we've built and nurtured the hospital system that serves us today.

    While historical circumstances will vary from city to city in our state, what happened in central Ohio illustrates the careful state policymaking and careful community stewardship that resulted in our nonprofit, community hospitals.

    In the late 1940s, our hospitals were in very sorry shape. Because of two world wars and the Great Depression, hospital improvements had not been made in decades.

    The hospitals were outdated. And because of our burgeoning population, they were unable to admit patients in a timely manner. Patients often had to wait weeks or months for a bed.

    On Jan. 12, 1945, our community leaders formed the Columbus Hospital Federation to begin examining different models for meeting the challenge of providing quality hospital care to the entire citizenry.

    The federation, made up of Columbus' top community leaders, seriously weighed whether to build a large, municipally-owned and operated hospital, or whether to modernize and expand the area's existing hospitals.

    After much deliberation, it was decided that the second route — a route leading to modern, nonprofit, community hospitals — would be the best way to offer the highest level of care to the most citizens in the most cost-effective manner.

    It was a path that would require state legislation, private philanthropy and voter support. State legislation would allow voter-supported, tax-exempt bond financing for hospitals ``organized for charitable hospital purposes.''

    A strongly Republican General Assembly (House 89R, 47D; Senate 21R, 12D) and a Democratic governor — Governor Frank Lausche — enacted the Hoffman Act, signed by Lausche on Sept. 18, 1955.

    The act allowed counties to create hospital commissions that could issue the bonds to build and equip facilities for existing private, nonprofit community hospitals without removing them from the supervision of their respective boards of trustees.

    Private philanthropy led the way. A fund-raising drive was begun, and by June 1956 the United Hospitals Building Fund had raised about $6 million, a substantial sum at the time.

    Then, Franklin County voters approved bond issues of $15 million each in 1956 and 1964. The proceeds gave us new hospitals at Grant and Riverside (then called White Cross) and additions at Children's, Mt. Carmel, Mercy, Doctors, St. Anthony and St. Ann's.

    This framework for nonprofit, community hospitals — combining state policymaking, private philanthropy and voter support — was achieved through careful consensus-building and much sacrifice. Our predecessors knew what they were doing. Our hospitals have served our communities efficiently and well.

    In every sense of the word, these are community hospitals.

    In Franklin County, this approach has allowed us to provide top-caliber care to all who enter the doors of our hospitals, regardless of ability to pay, without the need for a local tax levy.

    Although other Ohio cities have taken their own paths to providing community nonprofit hospitals, what we have in common is that serving our communities' needs is the highest priority.

    For-profit, limited-service hospitals, to which investor-doctors would be allowed to refer their own patients, would undermine decades of careful community-minded stewardship.

    And it would run directly counter to the spirit of Ohio's conflict-of-interest law prohibiting physician self-referrals to clinical labs, outpatient pharmacies and home health facilities.

    Our nonprofit community hospitals have earned our continued support. I hope you will agree.

    Thank you for your careful and prompt consideration.