Some Idahoans are finding out this month that they can no longer see their regular medical practitioners, and it’s an Idaho government entity that’s to blame.

Kootenai Health in Coeur d’Alene is a hospital district, with a publicly-elected governing board. The hospital district hasn’t levied a tax in about 20 years, but it remains a government entity. The district created a new  limited liability corporation, called the Kootenai Care Network, which shares its address with the main hospital campus. (The state constitution gives broad authority to public hospitals to enter into a wide range of corporate structures and partnerships).

And now, Coeur d’Alene-area residents who have Blue Cross insurance are finding out that they’ll only be able to use doctors and other practitioners who are on the Kootenai Care Network provider list. Kootenai Health’s hospital is, of course, on the list. Northwest Specialty Hospital, a highly-respected nearby physician-owned hospital, is not. And if a Blue Cross patient chooses to use an out-of-network hospital, such as Northwest Specialty Hospital, she could be hit with up to $50,000 of out-of-network charges.

Kootenai Health’s Executive Vice President and General Counsel Ron Lahner sounds sincere when he says creating the Kootenai Care Network is merely an attempt to contain costs while providing quality care to residents of the community. He says the Network has a physician-led membership committee that is considering the addition of providers that apply for entry, including Northwest Specialty Hospital.

Lahner acknowledges that Kootenai Health didn’t have to apply for membership into the network it created, but he believes that’s appropriate. For now, Kootenai Health is the only hospital authorized to participate in the Kootenai Care Network.

“Quite simply, there would be no network without Kootenai Health, since it is the only full service hospital in the area with the capacity to meet the needs of a significant KCN enrollee population,” Lahner told me.

Lahner adds that all Kootenai Care Network providers will still have to comply with strict standards intended to improve the quality of care and contain costs, an improvement over other collaborative healthcare arrangements of the past.

“You’re going to have to collect data, you’re going to have to respect the data and you’re going to have to follow evidenced-based medicine rules and protocols in order to stay in the network, and that’s a pretty important feature,” Lahner said. “There are going to be providers who fall out, frankly, because they’re not going to be able to meet the requirements of the network.”

Still, for now, Kootenai Health, which was created by voters and remains publicly-held, has set up a network that benefits itself, arguably to the detriment of competitors like Northwest Specialty Hospital, and arguably to the detriment of patients who might choose out-of-network providers.

Furthermore, Kootenai Health isn’t just another healthcare provider. It has a responsibility to the public, which ought to preclude it from creating and entering exclusive relationships that have the appearance of self-dealing. More importantly, Kootenai Health has a public responsibility that should require it to take a bigger interest as concerns the impact it is having on competing, privately-held medical providers and the patients who depend on them. Kootenai Health’s officials might argue that they are trying to do that, but what they’ve created appears to be self-serving.