Medical imaging decision is near

Jackson County residents will have to wait until sometime Wednesday to learn the fate of the medical imaging venture operated by Medford's two hospitals and the radiologists who interpret those images.

Circuit Court Judge Mark Schiveley said Monday he would issue an opinion within two days about whether to grant an injunction to preserve Oregon Advanced Imaging. If he does not, the enterprise will cease operations when its five-year operating agreement expires over the weekend.

Michael Crew, an attorney for OAI, told the judge that the company is caught in the middle of a "total war between the two hospitals."

Providence Medford Medical Center sued Rogue Valley Medical Center July 12 for breach of contract, contending that RVMC agreed in principle to extend OAI's operating agreement in January 2007, then suddenly announced plans to withdraw on July 3.

RVMC filed a countersuit a week later charging that Providence had violated the spirit of their working agreement by deciding to install MRI equipment at its new medical offices in Central Point.

OAI provides MRI scans in both hospitals as well as MRI and PET CT scans at offices in Navigators Landing near the Medford airport. The images are read by physicians of the Medford Radiological Group, the third partner in the enterprise. RVMC's parent company, Asante Health System, owns 43.5 percent of the business; Providence owns 38.5 percent; and the physicians group owns 18 percent. The partners share expenses and profits in that ratio.

A battery of five attorneys spent most of Monday questioning representatives of each party in the dispute about what transpired between November 2006, when negotiations began about renewing the agreement, until mid-July, when Providence filed suit.

Attorneys for Providence, OAI and the Medford Radiological Group repeatedly noted a series of e-mails about the negotiations written during late January 2007, in which OAI administrator Carol Flinn announced that all the parties had agreed to a five-year extension of the operating contract.

Mark Collins and Marvin Haas of RVMC both said they did not believe their hospital had agreed to continue the arrangement, because their contract specifically states that agreements must be signed by all parties. But both acknowledged that at no time before July 3 did they ever tell either of their partners or anyone at OAI that RVMC had not agreed to continue the joint venture, which has been financially successful for all parties during its five-year history.

Testimony revealed growing discord between administrators of the two hospitals who were involved in supervising OAI. A retreat that was scheduled during May to plan for OAI's future had to be cancelled when the two hospitals' representatives could not agree on how many people from RVMC would be allowed to attend the meeting.

Asante wanted three people, including a retiring member of the board, to provide background for a new member. Providence balked, and RVMC managers said they would cancel the meeting unless they could have three representatives.

Providence's attorney, Arden Olson, asked Mark Collins, Asante's director of finance, to verify the exchange.

"The choice you gave was 'Do it Asante's way or we won't do it at all,' correct?" Olson said.

"Correct," Collins said.

A facilitator who had been hired to conduct the retreat wrote that he observed "a visceral level of distrust" among the hospital representatives and a sense of "overwhelming dysfunctionality" on the board that supervised OAI.

Lewis Dahlin, making Asante's case, repeatedly noted that the OAI working agreement called for any extension of the joint venture to be signed by all three parties, and that never happened.

"OAI's Carol Flinn as well as Providence were aware of that all along," he said.

Reach reporter Bill Kettler at 776-4492 or

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