It's back to the planning stage for supporters of a plan to build a 10-bed hospital in southern Columbia.
The Missouri Health Facilities Committee Monday afternoon rejected the certificate of need application for the small hospital on a 5-2 vote, after a nearly 80-minute hearing at the Capitol.
"We're obviously disappointed, but we'll persevere and we'll find a way," Mike Powell, who's been Fulton Medical Center's CEO for the last six months, told the News Tribune after the vote. "I think we're just going to have to buckle down and find new and innovative ways to be creative to ensure there's an effective business model.
"Now, we're just going to focus on Fulton and focus on the work that's being done there now," he said.
Fulton Medical Center - the former Callaway Community Hospital and, before that, a county-owned facility - had proposed building a $36,157,928 small hospital at the south end of Columbia, on Lenoir Drive - south of the Route AC exit and just east of U.S. 63 - on land now occupied by two mobile home parks.
Fulton Medical Center is owned by a partnership between Nuterra, based in Leawood, Kan., and University of Missouri Health Care.
Powell told the committee the new owners already have spent money to improve the Fulton facility "for the first time in years" in the operating theaters, medical equipment and on deferred maintenance.
But, he said, "It's simply not enough - we must have additional revenues from this expansion."
He told the News Tribune the Columbia facility would have "generated an overall revenue of $9 million the first year, $11.7 million the second year and $13.5 million the third," producing "about $800,000 the second year and about $2 million the third year" in net revenues, after a first-year net "loss of about $700,000."
Powell told the committee he came to Fulton with a 19-year background with MU Health Care, at the Mount Vernon Rehabilitation Center.
"I was hired (in Fulton) to restore quality and financial viability, as I have a rural health care background," he reported. "After extensive review of the Fulton history and the last five years of financials, there are two things that are abundantly clear - without the infusion of the money from the purchase by MU and Nuterra back in December, the closing of that facility was imminent.
"I can also say with certainty that, as we move forward without a new business model that includes additional revenue from an expanded clinical footprint, the only hospital in Callaway County will cease to exist."
And, he argued, "Fulton Medical Center patients already come to Columbia for specialists and to see our surgeons. In fact, 40 percent of Callaway County residents who are hospitalized go to the University Hospital in Columbia."
Mitch Wasden, MU Health Care's CEO, told the committee construction of the 10-bed facility would help MU's struggles "with capacity issues based on our growth which has, basically, been unprecedented in the last four years."
The partnership with Nuterra also helps with MU's training about 40 family practice doctors "in the Callaway County area, supported by this hospital."
A half-dozen people testified in support of the application, including state Sen. Jeanie Riddle, R-Mokane; state Rep. Travis Fitzwater, R-Holts Summit; Fulton Mayor LeRoy Benton and Administrator Bill Johnson, who was a board member for the former Callaway Community Hospital.
After looking at that facility's financial records, he said, "I was amazed that the doors stayed open. I kept asking, "How much can they bleed?'
"I was pretty much thrilled when we heard the (MU/Nuterra) partnership was taking over."
But nine people urged the Health Facilities Review Committee to reject the certificate of need application.
Former Committee Chairman Jim Tellatin told the panel: "This strikes me as an odd application - it's geographically misplaced."
If Fulton Medical Center needs more beds, he said, it should expand at its current site.
Former state Rep. Judy Baker, D-Columbia - who was the federal Health and Human Services department's regional administrator from 2009-12 - said the proposed hospital likely would "have a significant negative effect" on the current, already operating hospitals, including University Hospital and the county-owned Boone Hospital Center.
Former state Rep. Rebecca McClanahan, D-Kirksville, now heads the Missouri Nurses Association, and read parts of a letter written by a former Callaway County advanced practices registered nurse who now works at Boone Hospital Center.
It said: "I think this hospital proposal is ridiculous and does nothing to meet the needs of the under-served Callaway County."
Jim Sinek, Boone Hospital's president, reported that Fulton Medical Center generally runs at only a 30 percent occupancy, while the Columbia hospitals combined now only "run about the national average of 60-65 percent occupancy."
And John Dalton, a St. Louis lawyer, told the committee they should reject the proposal because it failed "to satisfy the committee's criteria and standards for new hospitals," and because the application wasn't "transparent (enough) to define a service area."