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Bayfront, BayCare part ways

After turning a $4.9-million profit in 2000, the hospital's financial future looks brighter.

All references to the Catholic church have been banished, and abortions may resume. The signs and logos sporting the Franciscan cross are gone. And despite earlier claims that its bottom line would suffer, the newly independent Bayfront Medical Center says its financial prospects, for the time being, look good.

Today, Bayfront officially severs its ties with the BayCare Health System, ending a 3{-year experiment that may have saved the hospital millions of dollars but also got it tangled in a draining church-state conflict it couldn't win.

The "disassociation," as the lawyers call it, kills virtually all of the myriad agreements, shared services and contracts that once bound Bayfront to the five other non-profit hospitals in BayCare, including St. Anthony's in St. Petersburg.

But Bayfront executives' once-dour predictions about what would happen if the hospital left BayCare have yielded to a rosy glow about the past business year, in which Bayfront has earned a profit of $4.9-million, as of Nov. 30.

That's a huge change from 1998, when the hospital lost $6.6-million, and significant improvement from last year, when it made $600,000.

Bayfront also expects to collect $5-million to $6-million from BayCare when their books are settled. Hospital officials are projecting another healthy year in 2001, with an anticipated profit of $4.2-million.

"We've got a real spirit in this organization of doing what it takes to get the job done, and I think folks are real optimistic and have a real kind of can-do attitude and are looking forward, not looking back," said Bayfront-St. Anthony's CEO and president Sue G. Brody, who will remain chief of Bayfront.

Bayfront, St. Anthony's, Morton Plant Hospital in Clearwater, St. Joseph's Hospital in Tampa, South Florida Baptist in Plant City and North Bay Hospital in New Port Richey formed BayCare in July 1997 to consolidate services and save money in hopes of competing against for-profit hospital chains that were moving into the area.

Bayfront says the arrangement saved it about $10-million. But last year, the city of St. Petersburg, which owns the hospital's land, learned Bayfront had ended abortions and made other concessions to the Catholic church to satisfy St. Anthony's and St. Joseph's, the two Catholic members of BayCare.

Doctors' decisions also were subject to review by an ethics committee headed by a nun.

The hospital contended it never performed many abortions, but the elimination of the procedure became a rallying point for those who complained the church was exerting undue influence on South Pinellas County's only secular, non-profit hospital.

The city eventually filed a federal lawsuit on grounds the Catholic connections violated Bayfront's lease, which forbids the hospital from discriminating on the basis of religion. A coalition of women's and civil rights groups, including the ACLU and National Organization for Women, also sued Bayfront, BayCare and the city, alleging a breach of the constitutional separation of church and state.

Bayfront tried to solve the problem by offering to buy its land from the city for $47-million over 47 years, but the City Council rejected the proposal in October. It became clear the hospital either must leave BayCare or go to court, and the other members of BayCare voted Bayfront out.

In documents filed with the city and U.S. District Court in Tampa, which are overseeing the breakup, Bayfront has certified that it has removed all references to the Catholic Ethical and Religious Directives from its practices and written materials, and that it will be independent of all religious or BayCare influence.

The Bayfront board of directors also passed a resolution abolishing its abortion policy, which means any decision regarding abortion again will be up to the patient and her doctor, court records show.

"We are back to where we were when we came in," said Bayfront board chairman Larry Davis. "The physician can do whatever he thinks is necessary for the patient."

The public should see few substantive changes because of the breakup, and the hospital has no plans to cut any of its services, Davis and Brody said. Over the past two months, Bayfront and St. Anthony's have been untangling the personnel, services and other back-office functions they had come to share.

Ford Kyes, former chief nurse executive at St. Anthony's and the vice president of materials management for BayCare, was named the new chief operating officer at St. Anthony's.

Although BayCare and Bayfront had hoped to continue to work together in some capacities, the two will share fewer services than had been expected: BayCare will provide liability and malpractice insurance for Bayfront, and Bayfront will still incinerate St. Anthony's biomedical waste. That's it.

But both sides say they do not expect much head-to-head competition, either. During the seven decades they've been in town, separated only by a mile and a half, each has developed its own niche. Only Bayfront offers trauma care, for example, while only St. Anthony's offers in-patient psychiatric care. St. Anthony's dropped its obstetrics program when it joined BayCare, and it will not restore it. St. Anthony's also has more programs catering to senior citizens than Bayfront, Kyes said.

"We never really viewed Bayfront as our big competitor," Kyes said. "That doesn't mean that both of us won't be trying to respond to different needs that we see in the community, and that we won't be competitive in certain areas."

During the legal battle with the city, which cost Bayfront $1-million, Bayfront leaders had warned that leaving BayCare would threaten the hospital's financial viability. Now, however, they are optimistic, and the hospital's 2001 budget calls for a hefty $4.2-million profit.

Davis and Brody credited the turnaround to more tightly controlled costs, largely thanks to BayCare, and better political and economic conditions.

"We had BayCare and we had the savings when we desperately needed it," Davis said. "Now times have changed . . . I think we're cycling back. If we can control our costs and keep our volumes (of patients) up, we're going to do fine."

Congress appears ready to increase reimbursement rates for Medicare patients. Bayfront has solid contracts with HMOs, and most are expected to remain in effect after Bayfront leaves BayCare, Brody said. The Suncoast Medical Clinic, an adjacent physician's group that had lost much of its staff, has added doctors.

"That puts a big group of doctors on our campus that will refer almost exclusively to Bayfront, and that will help," said Davis, a pathologist who heads Bayfront's laboratory.

Bayfront now wants the city and the civil rights coalition to drop their lawsuits, but both groups want proof that the hospital is truly free of BayCare. A hearing is scheduled in federal court in mid January.

"We simply want to be assured that religion is completely removed from Bayfront. They seem to be moving in that direction," said Marcia Cohen, a St. Petersburg attorney for Planned Parenthood, the American Civil Liberties Union, Americans United for Separation of Church and State and the other groups that sued the hospital.

Even if the judge in the case agrees to dismiss the lawsuits, Bayfront's separation from BayCare may not mark the end of controversy: Although the City Council had flatly rejected Bayfront's offer to buy the land, the council recently appeared to alter course, and voted to hold a public hearing on the issue. It's scheduled for 6 p.m. Thursday.

It's unclear what the City Council plans to do next, but council chairman Larry Williams, who is running for mayor, has advocated a referendum to let the public decide whether to sell the city property to Bayfront.

Although Bayfront officials say they would welcome the chance to buy their freedom, they also say now may not be the right time. Davis, the board chairman, said the debate would be fractious and lengthy, and Bayfront needs some peace after the tussle over BayCare.

"I don't know why we really need to have a bitter fight over this right now," Davis said last week. "A month ago, when we were trying to stay in BayCare, . . . it was critical to get the land sale, but nobody was interested in even having a public hearing.

"Now we're up for a potential referendum. It just seems out of synch. It doesn't make any sense."