Maryland state health officials are seriously considering paying a group of private investors up to $2 million not to finish building a new hospital in Prince George's County begun with State approval.
The money for this unique plan to reimburse the investors for funds already spent on the Parkway Medical Center project would come from the pockets of patients through higher charges at nine area hospitals.
State health officials, past supporters of the hospital despite strong local opposition, now say the hospital's completion would add to "overbedding" in an area already saturated with hospitals and, therefore, lead to generally higher health costs. The option of simply taking away the hospital's official approval without any compensation to the investors, they say, runs the risk of lengthy and costly litigation.
THe proposal to reimburse the investors in what began as a profit-making venture in 1971 has raised questions among citizens and politicians over how to do it and if, in fact, it is justified at all. Four alternative formulas to apportion costs have drawn especially heavy criticism from officials of Prince George's County, whose residents would be most heavily saddled.
"Private enterprise takes risks. Sometimes they make a bundle and sometimes they lose, said Del. Key Bienan (D-Laurel).
The 250-bed Parkway hospital, if completed, would compete with the new $18 million, 236-bed Greater Laurel-Belts-ville Hospital only five miles away and scheduled to open April 1, 1978. The county-owned hospital received state certification after parkway, at a time when "over-bedding" was not an overriding issue with health planners and politicians.
Lawyers for Parkway liken their situation to that of someone holding a McDonald's franchise - spending money to plan and begin work on it hit unable to obtain financing to complete construction - watching another set of golden arches rising across the street.
"They can justify (being reimbursed) only to the extent that their venture costs were encouraged by the state planning agency," said William Opfer, Jr., chief of the state's hospital certification programs. "If it includes wining and dining of prospective customers at the country club, that's not a legitimate (reimbursement) expense."
That some amount would be paid to the Parkway investors, to prevent both the hospital's completion and lawsuits, was the starting point for a large gathering of hospital, county and state officials, and others recently in Laurel.
"What happens here," noted William Landis, director of the Maryland Comprehensive Health Planning Agency, "might set a very strong precedent for the rest of the state." Turning to the legislature for funds instead of the hospitals and patients, he cautioned, "opens up some very sticky issues . . . if there is a mechanism to reimburse anyone who wants to duck out . . .
The Parkway Medical Center, on a 16-acre site near Route 197 and the Baltimore-Washington Parkway, was first certified in 1971, over county opposition. The chief sponsor was Dr. Arnold Offen, a Prince George's obstetrician and developer of medical office buildings, as well as a contributor to Gov. Marvin Mandel and other politicians.
In 1973, Often changed the venture into a non-profit one and removed himself from the board. His medical partner, Dr. Phillip Rose, was installed as president of the hospital corporation.
Work on the hospital began but stopped when money ran out. Parkway tried to get stat-backed construction bonds but failed.
Last year, in order to obtain private financing, Parkway sought official approval for the rates it planned to charge. The Maryland Health Services Cost Review Commission, declaring the project "not financially feasible or appropriate," said no.
"They keep saying they have warm financing contracts," said Opfer, the state certification official, this week., Opfer said it would be a "risk" to call their bluff rather than reimburse them for expenses.
The cost review commission, at the same time it refursed to help Parkway get financing, said it would consider "as reasonable" higher rates at Prince George's County hospitals to indemnify "appropriate losses" suffered by Parkway backers which were "incurred as a result of previous government approvals and encouragement."
The nine hospitals included in the indemnification proposal are in Prince George's, Montgomery and Howard countries. Another suggestion raised at the meeting was to have third-party payers - Blue Cross, Medicare, Medicaid - instead of the hospitals, cover "indemnification" costs.
Only towards the end of the inconclusive 90-minute session was the idea raised of paying the Parkway people nothing.
"Most of us are fairly conscientious and concerned about what it costs people to come into our hospital," said Ted Hussey, of Howard County General Hospital. "I don't want to be put in a position of having to defend an extra $2 a day."