According to the AMA, Baptist Health several years ago sought to terminate Cathey's staff membership because "her husband, who was also a physician, owned an interest in (Arkansas Surgical Hospital), a competing facility." Cathey sued the hospital, and ultimately Cathey's husband a neurosurgeon, sold his interest in the surgical hospital, which opened in 2005.
"Although Dr. Janet Cathey could not have referred her patients to (Arkansas Surgical Hospital) because ASH does not provide gynecological services, Baptist Health informed Dr. Cathey that it would revoke her privileges pursuant to the policy on the day ASH opened," according to court papers filed by physicians opposing Baptist. She dropped her lawsuit and Baptist Health agreed not to contest her position.
When the Baptist board passed the restrictive policy in 2003, one of the plaintiffs, Bruce Murphy, MD, had an appointment to the Baptist Health board that was to expire in February 2004, according to the court records. At the time, Murphy, a cardiologist, owned 14.5% interest in Arkansas Heart Hospital as well. The Baptist Health policy prohibited him from the ownership.
If the Arkansas Supreme Court ruled in Baptist Health's favor, Murphy, president of a cardiology clinic, told the Arkansas Democrat-Gazette, "It would have allowed patient care to have suffered because the (policy) potentially gives the hospital the authority to interrupt that care."
A spokesman for Baptist Health also told the newspaper the policy is no different from conflict of interest policies at other companies. In the statement to the newspaper, spokesman Mark Lowman said, "Baptist Health believes that it has an absolute right to a conflict of interest policy that denies privileges to a physician to an ownership interest in a competing hospital." Baptist Health was deciding what the next step would be.