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Missouri lawmakers debate blocking KU Health System deal with Liberty Hospital

 Liberty Hospital in the Northland announced last month it would partner with the University of Kansas Health System to provide services. Critics worry about the precedent it sets for other state entities crossing state lines.
Marissa K Webb Photography
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Liberty Hospital
Liberty Hospital in the Northland announced last month it would partner with the University of Kansas Health System to provide services. Critics worry about the precedent it sets for other state entities crossing state lines.

Liberty Hospital announced it would partner with the University of Kansas Health System to help meet growing demand in the Kansas City suburbs north of the Missouri River. But the idea of a Kansas institution taking over a Missouri hospital sparked opposition from lawmakers in both states.

Liberty Hospital would be at risk of falling into the hands of a for-profit chain and losing important services if Missouri lawmakers block a proposed takeover by the University of Kansas Health System, a board member for the Northland hospital argued last week.

Speaking to a Missouri Senate committee, Liberty Hospital board president Dennis Carter implored lawmakers not to pass legislation meant to kill the proposed deal.

Doing so, he said, could result in the public hospital getting scooped up by a chain that he fears would shutter its labor and delivery center and Level II trauma center.

“If we go for-profit, we’ll be a little bit more than a triage center, but we will not be what Liberty Hospital and the people who voted us into office want us to be,” Carter said.

Liberty’s leadership started looking for another health system in May to forge a partnership to help the hospital meet growing demand in the Kansas City suburbs north of the Missouri River. It announced in October that it had chosen the University of Kansas Health System.

But the idea of the Kansas institution taking over a Missouri hospital sparked opposition from lawmakers in both states. Kansas Sen. J.R. Claeys, a Republican from Salina, introduced legislation requiring KU health system receive legislative approval before investing in a facility outside of the state.

The bill has not yet received a hearing.

And in Missouri, Sen. Greg Razer, a Kansas City Democrat, is sponsoring legislation that would prohibit Missouri hospitals from partnering with an out-of-state health system “operated by an institution of higher education” unless a supermajority of voters approve the deal.

Razer said he receives medical care from KU and has no issue with the quality of care the institution provides. He says heobjects to the idea of a hospital, governed by a board largely appointed by the Kansas governor, running a Missouri institution.

“Borders have a purpose of being there,” Razer said.

Razer also cited Missouri Attorney General Andrew Bailey, who recently argued the proposed arrangement is not legal without legislative approval. While public subdivisions in Missouri — like hospital districts or cities — can enter agreements with subdivisions in other states, Kansas law considers the agreements interstate compacts, which require legislative approval, Bailey argued in a letter to Missouri Senate leadership.

Chuck Hatfield, an attorney representing Liberty, said in an interview that executives had spoken to Bailey and there was a “misconception” that the deal would involve an interstate compact.

Instead, Hatfield said, the Liberty hospital district will still own the buildings and land as a political subdivision. The New Liberty Hospital Corporation, the nonprofit that currently operates the hospital, will add the University of Kansas Health System, also a nonprofit, as a “member, which will operate the hospital.

“I’m very confident after talking with them that we have or will be able to satisfy all of their concerns,” Hatfield said.

Madeleine Sieren, a spokeswoman for Bailey, said the attorney general’s position had not changed.

In testimony on Razer’s bill, Hatfield said KU would invest “hundreds of millions of dollars” at Liberty. In an interview, he said, those investments are still the subject of negotiations.

When Liberty started looking for a partner, Hatfield said, one of the primary issues was the need for capital to upgrade their electronic record and IT systems, invest in new equipment and keep up with building maintenance.

Much like countless rural hospitals, he said, Liberty can’t come up with the funds needed to keep up with upgrades.

Hatfield noted both he and Razer attended the University of Missouri and “were taught to hate KU.”

“I think a little of it is just cross-border xenophobia for want of a better term,” Hatfield said, “and I don’t think that’s an appropriate way to make healthcare decisions.”

This story was originally published by the Missouri Independent.

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Allison Kite