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New inpatient unit to reignite competition

DEFIANCE - Competition between northwest Ohio's two largest health systems - something Toledoans are familiar with - is about to heat up in this city of 17,500 about 50 miles southwest of Toledo.

Defiance Clinic, a for-profit physician-owned facility, and Toledo-based Mercy Health Partners intend to build a 17-bed $5.5 million inpatient center. The short-term unit would open in 2004 and be used by patients needing inpatient care for three days or less.

The two-story structure, next to the existing clinic, would compete directly with the city's hospital, Defiance Regional Medical Center. The hospital is owned by Mercy's main rival, ProMedica Health System, of Toledo.

Mercy's hospitals include St. Vincent Mercy Medical Center and St. Anne Mercy Hospital in Toledo and St. Charles Mercy Hospital in Oregon. ProMedica's hospitals include Toledo Hospital, Flower Hospital in Sylvania, and Bay Park Community Hospital in Oregon. The two systems have been criticized in Toledo for causing what some argue is unnecessary duplication of services.

Defiance Clinic and Mercy officials downplay talk of competition with ProMedica.

Steve Mickus, president of Mercy, pointed out that Mercy and the clinic have had a warm relationship for years. He said the clinic even considered affiliating in the mid-1990s before ProMedica bought the city's hospital in 1998. In 2000, Mercy established seven “centers of excellence” at the clinic, in which seven Mercy-affiliated physicians go to the clinic to provide specialty care.

Patients needing complex inpatient care are referred to hospitals, including Defiance Regional Medical Center, although Mr. Mickus acknowledged that Mercy hopes physicians frequently refer patients into St. Vincent Mercy Medical Center.

Chad Peter, chief executive officer of Defiance Clinic, said the clinic already has most of the services offered by a hospital, including diagnostic and surgical equipment. The new facility will just make it easier for patients to receive care in one place.

He said complex surgeries, such as heart bypass or angioplasty, as well as emergency services or delivery of babies, won't be done at the center.

Although Mr. Peter and Mr. Mickus downplay any talk of competition, ProMedica officials say they aren't thrilled with the decision to build an inpatient unit and question its necessity.

“Given the size of our community, we have a lot of questions regarding the scope and intent of the project, such as whether it's for-profit or not-for-profit, full service, or only selective profitable services, and will all patients be taken care of, including those needing charity care,” John Horns, president of Defiance Regional Medical Center, said in a statement.

Mercy and clinic officials say the unit will do charity care.

This isn't the only conflict between ProMedica and the clinic. In 2001, Defiance Clinic and several clinic physicians sued the hospital and ProMedica alleging that the hospital was unfairly excluding some of its physicians. ProMedica then sued the clinic, accusing it of excluding its physicians. Both cases are pending.

Charles Beard, president of Defiance City Council, said he thinks Mercy is joining with the clinic to compete better with ProMedica, but said he welcomes the competition, because the unit will add about 25 jobs to the community.

The city is still trying to work out an agreement with ProMedica over the fate of the old hospital building and grounds. ProMedica closed the old hospital this year and opened a $50 million facility.

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