Spanish Valley Clinic rendering 2020

Concept drawing for the new Spanish Valley Clinic. [San Juan Health Services District]

Funding for a new medical clinic in Spanish Valley was approved unanimously by a state board last week with no comment, despite weeks of legal challenges and contentious discussions about whether the clinic will meet the needs of residents in the region, straddling the boundary line between Grand and San Juan counties.

The proposed clinic site is located in San Juan County. Just 8 miles away, over the county line, is Moab Regional Hospital, a nonprofit in Grand County. Moab Valley Healthcare, Inc., the medical group that owns and operates Moab Regional Hospital, opposed the clinic proposal throughout the application and review process, asserting that the clinic would not address real needs in the community, is unnecessary, and that, being supported by public funding, it amounts to unfair competition.

Moab Valley Healthcare also contended that no health organizations in the Moab area were consulted in the plan, thus breaching the Utah Permanent Community Impact Fund Board (CIB) application’s requirement that applicants conduct “regional planning.”

The CIB approved funding for the new clinic at their Feb. 6 meeting. Objections raised by Moab Regional Hospital did not deter the board from granting a thirty-year loan of just over $4 million at 1% interest along with a grant of $1,357,228 to the San Juan Health Service District to build a 12,000-square-foot medical facility that will offer radiology, laboratory, and pharmaceutical services.

Jimmy Johnson is the chief operating officer of San Juan Health, which operates two clinics and a hospital in San Juan County. At a meeting of the Southeastern Association of Governments, Johnson explained the impetus behind the plan, saying the Health District is “trying to meet the needs of many of our county residents... to provide healthcare in closer proximity to their healthcare needs.”

Jen Sadoff, CEO of Moab Regional Hospital, doesn’t see it that simply.

“In healthcare, the motto is ‘first do no harm,’” said Sadoff. “In order for them to know whether they would do harm or not, they would need to work with us.”

A contentious discussion

The San Juan Health Service District submitted its plans to the CIB early this fall, after holding a public meeting, as required by the CIB application process, in Monticello.

The application was later discussed at two meetings of the Southeastern Utah Association of Governments, one on Sept. 26 and one on Oct. 24. Sadoff attended those meetings and raised her concerns about the proposal. Sadoff and Doug Fix, a board member of Moab Valley Healthcare, Inc. also appealed to the Grand County Council for support in their request that the CIB deny or at least delay the San Juan Health Service District’s application.

Sadoff explained that the services that would be offered at the new clinic are those with the highest profit margin. Moab Regional Hospital already provides those services, and also provides less lucrative services. A new facility competing with the hospital for only those highest-return services, she said, will harm the hospital and also raise the prices of those services because the same number of staff and machines will be used by a smaller number of patients.

Johnson contested Sadoff’s analysis of what would happen to healthcare prices, pointing to neighboring healthcare facilities in Blanding that he believes are able to coexist. Representatives from San Juan County expressed dismay at the pushback from Moab Valley Healthcare.

“I can’t see why you guys are against this clinic,” said Jerry McNeely at the Sept. 26 AOG meeting. “To me, it's a terrible injustice to even try to stop this. [I’m] just blown away.”

McNeely is the vice-chair of the Grand County Water Conservancy District and was standing in for Commissioner Bruce Adams at the meeting.

Sadoff maintained her stance that more collaboration in planning was needed.

“If they really wanted to look at what this valley needs and what’s good for this valley, this idea of just moving in and creating competition isn’t the way to do that,” said Sadoff. “To really be able to formulate a plan and make sure you’re doing something that’s good, you need to work together with the people that are there.”

Legal challenges to legal challenges

As the San Juan Health Service District gave no indication it was willing to delay its request or conduct the regional studies that Moab Valley Healthcare thought were appropriate, the healthcare organization appealed to the state.

On Jan. 29, attorney Julia Kyte of law firm Durham Jones & Pinegar sent a challenge to the application to the State Attorney General’s office on behalf of Moab Valley Healthcare. The challenge asked that Moab Valley Healthcare be permitted to speak at the CIB funding meeting and outlined several points of contention.

In response, the San Juan Health Service District filed their own politically charged legal rebuttal, calling the challenge “merely an effort to maintain Moab Valley's monopolistic position with respect to the provision of health care.” The San Juan Health Service District is represented by Greggory Savage of Ray Quinney & Nebeker.

Moab Valley Healthcare’s letter asserts that the San Juan Health Service District misrepresented the distance Spanish Valley residents must travel for health care in its CIB application. San Juan’s application says that residents must travel 50 miles to receive care in San Juan County, while it fails to mention that Moab Regional Hospital, in Grand County, is just a few miles away and there is no penalty for crossing a county border to receive care. San Juan responded that its application only made reference to accessing health care within San Juan County.

Moab Valley Healthcare also asserted that the San Juan Health Service District did not provide the CIB Board with a regional needs study and that the effort to gather public input on the plan was weak. Both public engagement and regional planning are requirements for a CIB application.

There was a public hearing about the proposed clinic on Sept. 9, 2019, which was noticed in the San Juan Record, published in Monticello. Moab Valley Healthcare’s challenge asserted that that was inadequate.

“By publishing only in the Monticello newspaper, it was a virtual certainty that no one from Spanish Valley would even know about it,” the legal challenge read. “The mandate of the CIB to have ‘robust public participation’ was not met in any good-faith manner.”

As for needs and feasibility studies, the San Juan Health Service District claimed it had conducted a detailed study using internal data, that it had all the information it needed and was not required to provide any documentation to the CIB.

“There is a reason that unlike the federal government, the [Community Impact] Board is not burdened with innumerable regulations,” the statement from San Juan reads, “It is intended that the Board get things done.”

The letter continues on to say that a study of the kind required in federal grant applications would “waste the money of San Juan County taxpayers.”

Moab Valley Healthcare’s appeal to the Attorney General’s office was rejected, with officials citing CIB Board rules which do not allow for testimony from third parties and do not have a way for groups to appeal or challenge applications.

Clinic approved by the board

Ultimately, none of these arguments were aired at the CIB funding meeting, which is a final approval stage for applications that have already been reviewed and approved a preliminary basis by the board.

When the Spanish Valley clinic came up on the agenda, Naghi Zeenati, who represents the State Transportation Commission on the board, promptly made a motion to approve the funding package. He was closely followed with a second from Beaver County Commissioner Mike Dalton, who represents the Five County Association of Governments. The motion passed quickly and unanimously, as did all of the other 10 projects listed on the meeting’s agenda, including a $1,787,000 grant and loan package for capital projects in Castle Valley.

Members of the CIB Board received copies of Moab Valley Healthcare’s challenge before their Feb. 6 funding meeting.

While none of the members mentioned the letter at the meeting, San Juan County Commissioner Bruce Adams, who represents the Southeastern Association of Governments on the CIB Board, said the board members took the challenge into consideration.

“They looked into great detail, they looked at the application that the [San Juan] Health District had presented, all parts of the application, including minutes from their public hearing and all the documents that were sent in,” said Adams. “I think they looked at them very closely, to make sure that the [San Juan Health Service District] had met the burden that they had in making the application for the clinic.”

Construction of the new Spanish Valley clinic is scheduled to begin in the spring of 2021 and take 12 to 14 months to complete.

Moab Regional Hospital, meanwhile, has planned a $22 million expansion of its facilities. Sadoff said the hospital will be brainstorming ways to protect its financial stability without raising healthcare costs for patients.

“We felt like bringing our concerns to the CIB was what we needed to do because we felt like, as guardians of public money, they should have all the information,” she said. “But at this point in time, we’re not in the business of politics, we’re in the business of taking care of people. And that is what brings me joy. If I wanted to be a politician I’d run for office.”

“There’s so many cool and exciting things happening in health care now around keeping people healthier and trying to do it for less money,” she added. “That’s where I want to put my attention.”