WALKING WOUNDED.

• Author: Massoglia, Mike

Battling an old rival and new rules, a mountain hospital that a war hero founded is forced into Filing Chapter 11.

On June 6, 1944, Dr. Charles Van Gorder landed in Normandy in a glider to set up a field hospital behind enemy lines. A veteran of the North African campaign, the surgeon stayed with the 101st Airborne Division as it fought its way through Europe. During the Battle of the Bulge, German shrapnel ripped into his knees while he was operating. Captured, he was shipped across Germany and Poland to the Russian border, where he escaped and eventually made his way back to the American lines.

After the war, Van Gorder moved to the North Carolina mountains, where he practiced nearly 38 years, and started a hospital in Andrews, a small logging community that didn't even have a doctor until he arrived. It earned him a chapter in Tom Brokaw's 1998 best seller, The Greatest Generation. "The thing I'm most proud of is that hospital," he told the NBC Nightly News anchorman. "If I had my life to do all over again, I'd do it the same way -- go somewhere small where people have a need, contribute something to people who need it; help people."

On June 6, 2000, his son, Chuck Van Gorder, who himself was wounded serving with the 101st Airborne in Vietnam, faced a D-Day of his own -- and a different kind of chapter. As chairman of the board of District Memorial Hospital of Southwestern North Carolina, the hospital his father founded, he walked into U.S. Bankruptcy Court in Bryson City and signed Chapter 11 documents. His father's legacy was more than $4 million in debt and needed protection from creditors.

District Memorial had begun with such hope and civic pride in 1954. Communities not only in Cherokee County but Clay and Graham pitched in. Mill and timber workers contributed pennies from their paychecks, and Dr. Van Gorder lobbied legislators in Raleigh for money to get it started. Now, it just wants to stay alive. Even more galling to supporters, Murphy Medical Center, which opened in 1979 just 15 miles away, is thriving. It had net revenues of $2.3 million for the fiscal year ended June 30, 2000, compared with losses of $1.2 million at District Memorial, according to reports filed with the U.S. Department of Health and Human Services.

District Memorial's supporters blame bruised egos, hometown leadership and fierce rivalry in a county with only 24,300 people. But most of all, it's due to changing times and the transformation of medicine from what was essentially a mom-and-pop industry of fee-for-service physicians and hospitals into a technology- and information-based, rule-driven health-care system in which reimbursements and referrals have become the coin of the realm. "One of the biggest problems for many rural hospitals is that the world has advanced beyond the capacity of the administration to run a hospital that fits in the same category as a Duke or a UNC or a Johns Hopkins," says Tom Ricketts, director of the Cecil G. Sheps Center for Health Services Research at UNC Chapel Hill.

Observers inside and outside Cherokee County no longer frame the question as whether it can support two hospitals but when, and under what conditions, the two institutions can put aside disagreements and move forward...