High-Stakes Battle Over Health Care Hospital, Clinic Compete For Silver Valley Patients

Shoshone Medical Center, on the verge of closing five years ago, offers more services than ever. It gets high accreditation scores, employs five doctors and even has made money the past few months.

Yet, the rural hospital still could be capsized by an iceberg-sized controversy.

The most visible part of that controversy is the decision by the West Shoshone Hospital District board to replace administrator Bob Morasko.

Barely below the surface is friction between the publicly owned hospital and a private clinic, Mountain Health Care.

At stake is the availability of high-level hospital care for Silver Valley residents that doesn’t involve traveling over the mountain pass to Coeur d’Alene.

Mountain Health’s doctor-owners are customers of SMC, admitting some of their patients to the hospital. They also are competitors, offering services such as minor surgery and a variety of outpatient therapies.

Mountain Health’s founding doctors, Jim Joy and Fred Haller, frequently are quoted as saying that Kellogg doesn’t even need a hospital. Yet they insist the real question is what kind of hospital the community can support.

Some SMC staffers remain suspicious of the Mountain Health doctors’ motives.

“The issue here is money and who wants it - us or them,” said George Gronholz, director of SMC’s addiction recovery center.

Gronholz spoke during a heated hospital board meeting last week at which 200 people showed up, many of whom objected to Morasko’s ouster. The influence of Mountain Health was mentioned frequently as a reason behind the board’s decision not to renew Morasko’s contract.

Joy and Haller did not attend the meeting. But they made it clear during an interview that they want Morasko out of there. They think he’s taking SMC in the wrong direction, bleeding itself dry by duplicating services already available in the Silver Valley.

They contend that SMC should not be trying to offer major surgery, which is best provided “over the hill” in Coeur d’Alene and Spokane’s larger hospitals.

Haller has practiced medicine in the Silver Valley for 21 years, Joy for 11. They said they not only aren’t out to get SMC, but wanted a partnership with the hospital.

“For years, we discussed the idea of building a new clinic together,” said Haller.

Talk of putting a clinic on the hospital grounds never got beyond the talk stage. Around 1990, the doctors even offered to buy the hospital.

Then the doctors decided to build on their own land, on McKinley Street, beneath the Silver Mountain Resort ski gondola.

The clinic now has three doctors, a physician’s assistant and a nurse practitioner; it brings in a variety of specialists and therapists, from urologists to psychologists.

Such “mega clinics” are increasingly familiar in cities but unusual in rural communities such as Kellogg, said Steve Millard, president of the Idaho Hospital Association.

“Physicians are forming groups and trying to get some of the revenue stream that hospitals did,” he said. “It’s direct competition.”

If SMC closed, Haller said, Mountain Health could meet 80 percent of the community’s medical needs with the addition of a birthing center, a three-day-stay unit and urgent care. But he reiterated that he isn’t out to close the hospital.

Board member Michael Peacock disagrees with the Mountain Health doctors that SMC could keep its emergency room open without offering major surgery, home-health care and other profitable services.

“The whole hospital supports the emergency room. It’s a money loser,” the trustee said.

One source of friction between Mountain Health and SMC involves allegations of conflict of interest.

Peacock, an attorney, insists that Joy’s wife, Katherine Joy, should not be serving on the SMC board because she benefits from the competing clinic. Katherine Joy distributed a letter last week in which she accused Peacock of saying he was out to “bury Mountain Health.”

Peacock denied it.

“I don’t want their demise,” he said. “I want their business.”

Another board member, Terry Spohr, also has been accused of having a conflict of interest because he is a physician’s assistant at Mountain Health.

“I’m tired of getting slammed,” Spohr said at last week’s board meeting. “I’ve lost patients because I joined this board.”

Dr. Tom Heston, who has worked at Mountain Care since last summer, also decried the accusations of the clinic’s undue influence on the hospital board.

“I don’t like being bullied into saying that, because I’m part of Mountain Health care, I have no voice in running this hospital,” he said.

SMC’s chief of staff, Dr. Mary-Alice Janzen, is among those who believes it’s a conflict of interest for Mountain Health Care to be directly represented on the hospital board.

She said Heston does have a voice in running the hospital as its assistant chief of staff.

Janzen quarrels strongly with the decision to oust Morasko. She is spearheading an effort to recall the board members who voted against renewing the contract with his company, Med Management Inc.

The targeted trustees are Katherine Joy, Spohr, Marie Stevenson and Robert Launhardt.

The other leader in the recall effort is Theresa Seeley, wife of Dr. Alan Seeley.

Janzen and Alan Seeley are among the five doctors SMC hired to work at its Shoshone Primary Care clinic. As such, they compete with Mountain Care for patients.

“Dysfunctional” is a word frequently used to describe Kellogg’s medical community.

Despite the conflict, there have been repeated calls for cooperation.

“We have to work together,” board vice chairman Launhardt said after defending his vote against Morasko. “We’re not going to make it unless we put our backbiting and bickering behind us.”

, DataTimes ILLUSTRATION: Color Photo