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Longview Regional, Diagnostic Clinic formally unite

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Posted: Wednesday, February 1, 2012 4:00 am | Updated: 7:16 am, Tue Mar 6, 2012.

Two long-affiliated members of the Longview medical community announced a formal alliance Tuesday designed to uncork a figurative bottleneck to expanded local services.

“We’re pushing that element of growth, and we’re saying we’ve got to expand,” Longview Regional Medical Center CEO Jim Kendrick said, describing an agreement with Diagnostic Clinic of Longview. “We got to the point where we needed to grow and couldn’t.”

For five years, the Longview hospital at Fourth Street and Hollybrook Drive has been partly owned by physicians, including those at Diagnostic Clinic.

At the same time, the 32-year-old, private hospital has been expanding its medical offerings, such as a multi-million dollar Heart and Vascular Institute that opened in December.

Kendrick said further expansion had become legally unwieldy under federal health care reforms that included provisions forbidding doctor-owned hospitals from expanding. That meant shares of the hospital that were held by doctors, most of whom work out of Diagnostic Clinic, were legally blocking further expansion.

A spokeswoman for the Texas Medical Association confirmed the Patient Protection and Affordable Care Act of 2010 banned any new physician-owned hospitals. It grand-fathered existing situations, spokeswoman Pam Udall said.

“But they cannot grow,” she added. “If they are going to take Medicare, then they cannot grow.”

Diagnostic Clinic CEO Bert Ratay said the hospital is re-purchasing those syndication shares the physicians bought in January 2007.

“The names (of both) are going to be the same,” Ratay said. “The staff are going to be the same.”

It’s the potential for expanding services to Longview and the region that will be different, he and Kendrick said.

“We’re not going to have those handcuffs on, not being able to expand,” Kendrick said.

Terms of the share purchase were not disclosed, and Kendrick declined to specify what expansions are planned.

Previously, Kendrick and Michael Clark, who is Diagnostic Clinic’s director of business development, publicly discussed creation of a specialty hospital focusing on women.

“We plan a significant, larger expansion that is going to be similar” to the heart and vascular expansion, Kendrick said. “The women’s hospital concept is incorporated into all of our expansion plans.”

Ratay and Kendrick, as well as Diagnostic Clinic Board President Dr. Robert Wheeler, said doctors involved in the deal will continue treating patients at both Longview hospitals.

Diagnostic Clinic, which is on the Longview Regional campus, divides its work roughly equally between Longview Regional and Good Shepherd Medical Center, Wheeler said.

“As far as patients are concerned, there’s not going to be any changes that will be caused by us,” said Wheeler, adding he was handling a birth at Good Shepherd Medical Center later Tuesday. “People want to know how this is going to effect them here. They are still going to have the same doctors; they are still going to have the same choices.”

Ed Banos, president and chief executive officer of Good Shepherd Health System, issued a prepared statement Tuesday that said he was skeptical the deal will benefit local patients.

“We are not surprised to hear about the Community Health System’s plans to affiliate with Diagnostic Clinic of Longview,” he wrote, referring to Longview Regional’s parent company. “But we are disappointed for the sake of our community. We believe this deliberate movement toward the practice of out-of-state, for-profit corporate medicine is not in the best interest of Longview-area patients.”

Ratay acknowledged Longview Regional’s corporate ownership, noting Longview anchor businesses such as LeTourneau Technologies and Eastman Chemical Co., Texas Operations also have out-of-town ownership.

“All the governance in what we’re going to be going forward with is local,” Kendrick said. “The doctors all live here, and the patients all live here. We are no different from a LeTourneau or anyone else that has outside ownership.”

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