The Northeast Mississippi Daily Journal
July 6, 2003
Tupelo Medical Center Makes Big Money
The Northeast Mississippi Daily Journal
Grant M. Fox
July 6, 2003
On Sunday, June 8, 2003 the Daily Journal featured a
lengthy article on The Imaging Center, that is, Dr. Mike Currie's
12,000 square foot radiology facility located in Tupelo's Gloster Creek
Village. Despite strong opposition from the North Mississippi
Medical Center and Tupelo's lone group of radiologists (who have an
exclusive contract with the hospital), both the Mississippi State
Department of Health and a Hinds County Chancery Court have sided with
Currie in his battle to obtain a certificate of need for an MRI scanner
for his clinic. The hospital has one last shot in their ongoing
legal battle to squelch competition with an appeal currently pending
before the Mississippi Supreme Court. Under Mississippi law,
Currie can begin operating even while the hospital continues to fight
him before Mississippi's highest court.
When the Daily Journal asked about the hospital's
opposition to Currie, Dr. Jeff Barber, CEO of the North Mississippi
Medical Center, said "We have about 29 cost centers that lose money -
like the helicopter and ambulance service, the emergency
department. We have other lines of service that make money and
subsidize those loss leaders. And our ability to subsidize those
loss leaders directly relates to our ability to have revenue-generating
departments." I read Dr. Barber's comments to mean that the hospital
has a number of areas that are not profitable; therefore, the hospital
should be allowed to monopolize the field of radiology in order to
subsidize losses that the hospital incurs.
As a not-for-profit institution, the North Mississippi Medical
Center is required to file Form 990s with the Internal Revenue
Service. A Form 990 is a nonprofit corporation's tax
return. In order to review copies of these Form 990s, I went to
the internet site guidestar.org where many nonprofits' Form
990s can be reviewed. The site also provides summaries of the
profitability of these nonprofits to educate the public of how these
institutions are being operated.
For the fiscal year ending September 30, 2001, the North Mississippi
Medical Center produced a profit of $47,628,933.00. Sounds pretty
profitable to me. It seems that Dr. Barber is doing an excellent job at
overcoming those "cost centers."
Lest you think the $47 million profit that the hospital made for the
fiscal year ending 2001 is an inflated number, please consider that the
hospital listed a $47 million profit after it wrote off $29
million in bad debts, took a $27 million depreciation deduction, and a
$4.3 million loss on its investment portfolio.
On the 2001 tax return, the hospital listed "savings and cash
investments" at the beginning of the year in excess of $191 million and
ending the year at more than $250 million.
One of the more interesting items on the hospital's Form 990 is a
list of the top independent contractors that the hospital pays each
year to provide services to the Medical Center. On the Form 990
for the year 2000, North Mississippi Medical Center paid Phelps Dunbar
law firm legal fees totaling $1,248,123.00. Phelps Dunbar was not
paid quite as much on the Form 990 for 2001. Their fees went down
to $1,225,587.00. So, over a two year period the hospital paid
its attorneys an average of $103,071.25 per month.
It should be noted that Phelps Dunbar does not represent the
hospital in medical malpractice actions and the fees listed above to
the best of my knowledge are not paid to Phelps Dunbar to defend the
hospital from these types of lawsuits. The Mitchell McNutt law firm
provides medical malpractice defense work to the hospital and the fees
are paid from the hospital's medical malpractice insurance carrier.
The McCarty Company, a design group, was paid $2,219,156.00 for the
fiscal year ending in September of 2000 and fees the next year of
$1,715,291.00.
While trying a lawsuit against the hospital in the fall of 1998, I
heard chief financial officer Gerald Wages, when asked on the witness
stand who owned the hospital, respond that "the members of the
community" own the hospital.
The Medical Center is a not-for-profit institution that pays no
income taxes and no ad valorem property taxes. However, there are
a number of individuals other than physicians who profit off of this
not-for-profit institution, and the Medical Center continues to post
some pretty decent revenues in these trying economic times.
When Dr. Barber levels a charge that the hospital will suffer losses
from Dr. Currie's Imaging Center, which is a for profit institution and
will pay taxes just like you and I do from our businesses, the owners
of the hospital who are the members of the community need to be well
informed about just how profitable this not-for-profit hospital is and
how revenues are spent at the hospital and its subsidiaries. Don't take
Dr. Barber's word for it, check out the facts.
July 6, 2003
Grant Fox, a native of Chickasaw County, lives in Tupelo where he practices law.
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