The chief executives of the bayou region's two largest hospitals were questioned by attorneys Wednesday at a trial that will determine whether one can operate clinics in the other's service area.
Terrebonne General Health System and Thibodaux Regional Health System each provide services within separate hospital districts created by state law. They are governed by their own boards of commissioners, whose members are appointed by their own parish governments.
In 2021 and 2023 Thibodaux Regional opened walk-in clinics in Houma; Terrebonne General said the move is barred by the laws governing hospital districts and should not be allowed. Terrebonne General sued Thibodaux Regional in 2023 to halt what they maintain is an encroachment into their area.
"Terrebonne is afraid of competition," Attorney Jerald Block said. "They want to restrict access to choices in Terrebonne."
The two facilities, urgent care clinic at 1411 St. Charles St. in Houma opened in September 2021, and a clinic at 1238 St. Charles St. in Houma opened in February 2023. Both were closed due to a preliminary injunction ordered by Judge Jason Dagate, but later appeals reopened them.
Twelve attorneys sat in the courtroom. Block was one of the attorneys representing Thibodaux Regional. Also represented were Terrebonne General and Lafourche Hospital Service District 3.
Thibodaux Regional's and Hospital Service District 3's attorneys were arguing that the hospital and the service district had separated in October of 2019. By separating the two entities, Thibodaux Regional's attorneys argued, the hospital was no longer bound by the laws that govern the service districts - meaning Thibodaux Regional could set up clinics wherever it chose, including, in this case, Terrebonne. They also opened a Cardiology Clinic last year in Assumption, 2595 LA 1, Labadieville.
Terrebonne General argued that Thibodaux Regional was trying to skirt the law.
"You can't do indirectly what you can't do directly," Larry Demmons, an attorney for Terrebonne General, said.
Terrebonne General is familiar with the law because St. Anne Hospital in Raceland, which is Lafourche Hospital Service District 2, forced Terrebonne General to shutter its clinic in their area through a lawsuit in 1998 . In that case, the First Circuit Court of Appeal said that allowing a public hospital service district to compete with one in another parish could be damaging to the latter.
Thibodaux Regional's attorneys argued that there was a preexisting clinic before they took over. Fred Fondren, an attorney for Thibodaux Regional, questioned Phyllis Peoples, Terrebonne General president and CEO, about the competition.
She acknowledged that the preexisting clinic duplicated some of the services offered by Terrebonne General, and said that, in her opinion, hospital service districts and the hospitals themselves are one and the same. Asked if Terrebonne General was afraid of competition, Peoples said no.
"As long as everyone is playing by the rules," she said. Asked if the competition within Terrebonne's service district was damaging she said, "Well, it's certainly one less patient we get to see."
Thibodaux Regional's CEO Gregory Stock also answered questions. He openly admitted that a goal of changing the hospital to a nonprofit was to expand beyond Lafourche Service District 3. The transition came with pros and cons, he said. No longer could the hospital impose taxes, for example, but also the hospital was no longer beholden to the service district's board. The hospital currently operates under the rule of a 501(c)3 board and leases its property from the service district's board.
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Stock said the healthcare system has changed since the hospital service district laws were put in place, and they hamper the growth of mid-sized to smaller hospitals these days.
"It's no secret that competition increased in healthcare from everywhere, not just from the hospitals," he said.
Companies like CVS and WalMart, he added, challenge the hospitals because patients/consumers want the fastest option.
"They pick up the phone and find where the five-star urgent care is and go there," he said. "The loyalty has gone way down."
Stock was asked why he didn't ask the Legislature to change the laws surrounding service districts if it hindered growth, and he said he didn't think he could persuade them. Peoples was asked if she thought the laws gave hospitals a monopoly over their area, but the question was objected to and she could not answer it.
"That's one argument for the Legislature," Dagate said.
This article originally appeared on The Courier: Terrebonne General, Thibodaux Regional CEOs questioned in service district lawsuit
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