The misperception and misapplication of the First Amendment in the American pluralistic system: mergers between Catholic and non-Catholic healthcare systems.

• Author: Kellhofer, Jason M.

1. INTRODUCTION

   In 1999, the Republican presidential forerunner, Governor George W. Bush stated, "[I]n every instance where my administration sees a responsibility to help people we will look first to faith-based organizations, charities and community groups that have shown their ability to save and change lives. (1) As President Bush took office in 2001, this proposal became a "top priority." (2) "On January 29, 2001, President Bush fulfilled his promise to bring compassionate conservatism to Washington by signing an executive order creating a White House office aimed at linking religious organization with federal funding to run social service programs in their communities." (3) Though many have praised such efforts as consistent with the American model of a pluralistic society, others have harshly criticized President Bush for eroding the constitutional firewall between church and state. (4)

   The actions of President Bush have highlighted the tensions present when government attempts to support the actions of faith-based organizations in the realm of societal interests. However, a more immediate and less recognized battle has been waged in the realm of healthcare. Recently, mergers between Catholic and NonCatholic healthcare services (hospitals and Health Maintenance Organizations (HMO's)) have raised concerns, some valid and some not. (5) As part of these merger agreements, Catholic entities most often require that certain services no longer be provided. (6) The services commonly removed are those that conflict with the moral stance of Catholic providers and generally include abortion, vasectomies, tubal ligations, use of the "morning after pill," and overall consultation regarding the use of contraceptives outside the bounds of marriage. (7)

   This Note questions the wisdom of those who contend that Catholic health providers, to constitutionally qualify for government assistance or be permitted to merge with public entities, must be stripped of that which makes them most effective--their religious identity. (8) The threat to sectarian healthcare has steadily been on the rise as can be seen in actions such as the American Public Health Association's recent approval of a policy statement recommending more government oversight to preclude the dropping of reproductive services when Catholic and Non-Catholic hospitals merge. (9) Section II explores why these mergers occur and why certain services are subsequently dropped. Section HI applies a historical analysis to refute the argument that public and private are meant to remain separate. After establishing that pluralism has been and is presently the foundation of the American society and its healthcare, section IV evaluates whether the Establishment Clause or the Free Exercise Clause of the First Amendment is in danger of violation by mergers between Catholic and Non-Catholic hospitals. Finally, section V addresses the argument that Catholic healthcare mergers constructively deny women, most especially indigent women in rural areas, the right to reproductive services, namely abortion.

2. HOSPITAL MERGERS AND THE DIRECTIVES

   In the late 1980s, a boom in hospital mergers began. Over forty percent of hospitals responding to a 1986 survey had merged or were considering a merger. (10) The vast majority of mergers took place between hospitals similar in structure; however, some mergers occurred and still are occurring between Catholic hospitals and Non-Catholic hospitals. (11) Largely, this was due to the changing nature of healthcare as the fee for service structure began to be replaced by a managed care approach. (12) Though there is no standard definition of "managed care," the basic idea is to coordinate all health care services an individual receives in order to maximize benefits and minimize cost. (13) This has, to varying degrees, been accomplished through the use of HMOs. (14)

   The Nixon administration proposed in 1973, and Congress passed, the Health Maintenance Organization Assistance Act which created the term HMO and provided HMO's with federal funds to encourage development during their start up period. (15) "An HMO is a group that contracts with medical facilities, physicians, employers and sometimes individual patients to provide medical care to a group of individuals;" nonetheless, patients generally do not have any significant "out-of-pocket" expenses because this care is usually paid for by an employer at a fixed price per patient. (16) Athough by the end of the 1970's only five percent of Americans enrolled in prepaid arrangements, the pace of enrollment increased rapidly in the 1980's and by 1990, seventy-four percent of employees were enrolled in employer-sponsored HMOs. (17)

   The downside is most HMOs are usually for-profit corporations with responsibilities to stockholders that take precedence over responsibilities to patients, the HMO directly and indirectly controls the amount of health care that the doctor is allowed to provide. (18) Currently, the majority of Americans with health insurance are enrolled in for-profit HMOs which represent seventy-five percent of all HMO plans. (19) A 1999 study published in the Journal of the American Medical Association found that for-profit HMOs provide a lower quality of medical care in comparison to non-profit HMOs. (20) Dr. Sidney Wolfe, Director of Public Citizen's Health Research Group noted that the money in a for-profit HMO goes to bureaucracy and profits and that, generally, "the more profit, the less care." (21)

   The consolidation of the health care industry as a whole has led to an extremely competitive market and Catholic healthcare has been forced to make economic decisions in regard to its hospitals as well as to innovatively seek alternatives to secular HMO's. (22) The vast majority of HMO plans only contract with a limited number of providers, and hospitals are thereby forced to aggressively seek out a managed care contract. (23) Those hospitals with the most services are logically at an advantage.

   Health care restructuring, particularly by hospitals, has been dominated by a few major concerns. These concerns include financial distress characterized by high levels of uninsured, market changes in which neighborhoods deteriorate or grow, competitors that merge or affiliate, managed care that grows stronger and picks its partners, the ever expanding investor-owned companies that become the feared agitators, and infrastructures that age and require capital. (24) The goal of the modern hospital has been to achieve status as a "one-stop-shopping" facility. (25) This in turn attracts the managed care plan seeking to contract with the fewest providers offering the broadest array of services for the lowest cost. (26)

   To remain a competitive force, Catholic hospitals have merged with Non-Catholic hospitals. (27) For-profit and secular facilities are more likely than Catholic hospitals to close for financial reasons. (28) The most common situations that have arisen involve secular hospitals seeking a joint venture to pull their heads above the economic waters in conjunction with Catholic institutions seeking to combine services and improve their prospects of obtaining patients. (29) Hospital trustees and board members have spoken out in efforts to outline problems they continuously face. (30) Sometimes their decisions were influenced strongly by for-profit or nonprofit systems that were simultaneously wooing and threatening to compete with them. (31) The early and mid-1990's was a time of acute hysteria triggered by the enormous expansion of Columbia Health Care of America that, for many hospitals, presented a threat that demanded immediate decision making about their future. (32) Catholic Hospital trustees have noted the swiftness of events as the number of sisters present in hospitals is reduced and for-profit chains approach. (33) Soon thereafter, the hospitals are sold. (34) For these reasons, specifically an intense pressure to cut costs and eliminate duplicative services to remain competitive, "religious hospitals, especially Catholic ones, are increasingly striking deals with non-sectarian hospitals ... and establishing their own health maintenance organizations." (35)

   As early as 1987, analysts of medical healthcare reform were advising with fervor that healthcare services "look around ... [j]oint ventures are the synergistic relationships between companies in which one plus one can and often does equal three." (36) The benefits of a joint venture were touted as: multiple services under one umbrella, diversification of program base and offerings, possibility of new program offerings, formation of HMOs to secure a client base, ability to hire and maintain high-level technical personnel, and elimination of duplicative services. (37) However one hospital board stated it simply: "We woke up and realized the big issue was survival." (38)

   Most indicative of a willingness on the part of Catholic healthcare to merge with secular institutions are the Ethical and Religious Directives for Catholic Health Care Services (Directives), which were revised in 1994 to include Part 6; it addresses "Forming New Partnerships with Health Care Organizations and Providers." (39) Church officials, though willing to join with Non-Catholic hospitals, were apprehensive about losing the distinctive Catholic identity so vital to their mission of healthcare. (40) The trustee of one Catholic hospital wondered whether his hospital system could continue its mission under a for-profit system: "Ours is a 24-hour hospital that is mission driven. Its problems have been maintaining the mission set by our church. When Columbia/HCA arrived, the question arose whether we were a nonprofit or for-profit organization." (41) To assist in such controversies that arise when merging with other entities, Catholic hospitals turn to a set of guiding principles. (42) "Directives" are a guideline to Catholic behavior within the health...