The University of Utah will conduct an antitrust audit and compliance program - an audit the attorney representing the U. hopes can be conducted in cooperation with the Utah attorney general's office.
For several months, the attorney general's office has been investigating whether agreements between the U. Medical Center and Intermountain Health Care, Utah's largest health-care conglomerate, may violate antitrust laws.Several hospital officials told the Deseret News that the investigation focuses on the pediatric care units of both hospitals, plus the U.'s department of pediatrics and its newborn intensive care unit.
"We can neither confirm nor deny the existence or absence of any investigation of any specific company," said Arthur M. Strong, chief of the fair-business enforcement unit of the Utah attorney general's office. "However, we have been investigating the health-care industry in Utah for more than a year."
When asked about the attorney general's investigation, Douglas J. Hammer, vice president and general counsel for IHC, said: "We have not been contacted by the attorney general's office. We are in full compliance with federal and state antitrust laws. We have asked the attorney general's office in the past to contact us if any problems arise. We have not heard from them."
But Jonathan A. Dibble, appointed counsel for the U. Hospital and Medical School, said Wednesday that the attorney general's office "is looking at both the hospital and medical school."
"Part of the function of the attorney general's office is not only to investigate, but to monitor antitrust compliance and educate their people about the laws," Dibble said. "The University of Utah is committed to antitrust compliance and wants to continue to provide excellent medical education and health care in an efficient and competitive manner. It hired outside counsel to carry out its policy."
According to Dibble, an antitrust audit is a procedure commonly used by clients to ensure people are complying with antitrust laws. During the audit, attorneys will examine procedures, monitor past recommendations and suggest future guidelines, he said.
"Because of the impact of antitrust laws in the health-care industry, it is anticipated that the audits of the U. Hospital and the Medical School will be carried out on a regular basis in the future," Dibble said.
The current attorney general's investigation apparently stems from a proposed agreement between the University Hospital and Primary Children's Medical Center - an agreement the attorney general's office nixed some five years ago.
The 1985 proposed agreement called for the new Primary Children's Medical Center to open on the U. medical campus with 200 beds - including 32 general pediatric beds transferred from the University Hospital. An additional 30 newborn intensive care beds would be transferred to Primary Children's from the University Hospital at the end of seven years.
But at the request of state Board of Regents the attorney general's office reviewed the proposed agreement and determined that the proposed allocation of services between Primary and the U. was illegal under both Section 1 of the Sherman Act and the Utah Antitrust Act.
The attorney general's office is now considering whether recent actions between the two hospitals violate the spirit of the 1985 attorney general's opinion. The current investigation seems to focus on at least four specific issues.
Transfer of babies
More than a month ago, nurses in the U.'s newborn intensive care unit complained that babies were being transferred out of their unit to Primary Children's newborn intensive care unit.
But when asked about the nurses' protests, some U. physicians called them "over-reactive." One physician, who asked not to be identified, said doctors wanted fewer babies in the U.'s newborn intensive care unit - to ensure those treated received quality care. The ideal number of babies, he said, would be 28.
But since Primary Children's relocated to the U. hospital campus, the census of the U.'s unit has averaged 23 babies. And on Sept. 1, the U. Hospital raised patient rates overall by 5 percent to offset losses from the decreased newborn intensive care unit census.
In an Aug. 30 administrative memo, U. Hospital Administrator George W. Belsey told hospital service directors that since Primary Children's moved to the U. campus this year, substantially fewer babies had been treated in the U.'s newborn intensive care unit.
"It is becoming increasingly obvious that the lower census on that service will continue and does require modification to both revenue and expenditures in order to maintain overall hospital financial viability throughout the year," Belsey said. "Therefore, I feel it is essential that we raise patient rates immediately to a level that will offset the losses incurred resulting from the reduction in the neonatal area."
There has also been a change in the university's medical school residency program.
No longer are residents from the U. medical school allowed to fulfill their residency in the U. Hospital's newborn intensive care unit. Instead they are assigned to Primary Children's newborn intensive care unit by Dr. Michael A. Simmons, director of the U.'s pediatric residency program. This means the U. hospital's unit must be staffed completely by attending physicians, which also increases costs.
Wearing two hats
The two hospitals have signed other agreements.
One such agreement, signed in 1977 when the Primary hospital was still at its old location, established the chairman of the department of pediatrics at the U. as the medical director of Primary Children's Medical Center.
Simmons currently wears both hats.
On the advice of U. lawyers, Simmons - who is taking a year's sabbatical to serve as physician/adviser to the Senate Labor and Human Resources Committee in Washington, D.C. - said he too couldn't comment on the attorney general's investigation, which focuses on several activities he now oversees.
Cooperative clinic in Orem
This year Simmons was also named director of a new pediatric health clinic in Orem.
The clinic, which sits adjacent to IHC's Orem Community Hospital, is a cooperative effort between the U. department of pediatrics and Primary Children's Medical Center. The first of its kind in the state, the clinic offers a variety of specialized care for area patients, plus continuing education for private physicians in the community. U. faculty who practice sub-specialties at Primary Children's staff the clinic.
Patients must be referred by their primary physicians.
"These are what you refer to as the super specialists in pediatric medicine - the ones specializing in cardiology and pediatrics," said Mark J. Howard, chief executive officer of IHC Hospitals of Utah County. "These are specialities and super specialists we don't have in the county."
This cooperative clinic, too, has raised concern among state officials of possible antitrust violations, according to Deseret News sources.