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Hospital feud costs big bucks

Published Oct. 4, 2005

This city's battle over its community hospital hasn't been cheap.

Since February, the city has spent more than $82,000 for almost 500 hours of work from the Tampa law firm it hired to sort through the details of a controversial partnership deal between Helen Ellis Memorial Hospital and Columbia/HCA Healthcare Corp., the nation's largest hospital chain.

About half a dozen lawyers from the firm Honigman, Miller, Schwartz and Cohn charged between $125 and $260 an hour for their work, which included everything from research and telephone calls to writing letters and talking to a newspaper reporter.

The hospital's legal fees in the conflict are even higher, administrator Joseph Kiefer said.

The city's questioning and delays over the deal cost the hospital more than $100,000 in additional legal fees, he said. But he could not say what the hospital's total legal bills would be.

"Obviously, we'd rather be spending it on other things," Kiefer said.

The city also paid almost $6,000 in advertising costs to three local newspapers _ including the St. Petersburg Times _ to publish open letters from City Manager Costa Vatikiotis scrutinizing the deal.

Vatikiotis said the full-page ads were the only way to let residents know what was happening.

"We were the source of information about this proposed affiliation, not the hospital," he said.

The hospital published ads of its own, but fewer than the city did.

Ultimately, for some at the city, the expense was worth it because it meant fending off the corporate giant officials feared would gobble up their local hospital in a questionable deal.

"I would say that $80,000 was some of the best money we spent," Commissioner Dudley Salley said.

Mayor Anita Protos agreed.

"What the city has spent is nothing because when you think what could have happened, we could have really lost," she said.

Commissioners were confronted late last year with a partnership deal the hospital had struck with Columbia without input from the city, which owns the hospital land and buildings.

Helen Ellis officials wanted commissioners to send their deal to the ballot. That was necessary because the change would end the hospital's non-profit status, requiring a change in the hospital's lease with the city.

But commissioners were skeptical of the deal and wanted a closer look at it.

That's why, in February, they hired special attorney Barbara Pankau, instead of relying on City Attorney Herb Elliott.

"The city attorney is not well versed in the healthcare industry," Commissioner Karen Brayboy said.

Work by Pankau and her firm helped city officials unearth, and question, fine points of the deal.

"I think had we not spent the money, there were a lot of things we may have not been aware of," Brayboy said.

Vatikiotis said the city had to turn to expert help because the hospital wanted quick action on its deal.

The commission ultimately harpooned the hospital's deal in April when it refused to set a referendum.

Commissioner Cindy Domino said commissioners should have set the referendum and saved the legal fees.

"It would have ended," she said. "We wouldn't have had to go through the rest of this nonsense."

The $82,000 the city has so far spent on Pankau's firm almost rivals the $104,626 the city paid in total legal bills during fiscal year 1994, according to finance records.

Vatikiotis said he had estimated from the start that legal bills would range between $50,000 and $100,000.

The city, which has saved money on salaries and has some reserve funds, can afford to pay the bills, he said.

Since the dispute over the deal began about six months ago, the feud between city and hospital leaders has expanded to include what role the city should play in hospital governance.

Domino has been critical that that, too, has cost the city money in legal fees.

"This is something that could have been solved from Day One without all this nonsense by just being more open-minded and not letting attitudes and egos get in the way," she said.

Vatikiotis said Pankau's involvement with the city is winding down, but she will likely be consulted in the future.

"I'm sure she'll be there as long as we need her," he said.