PORT ANGELES — Cancer specialist Dr. Robert Witham has filed a federal lawsuit against Olympic Medical Center, resurrecting accusations of unfair competition that he first made in 2004.

Now he has put those issues center stage in U.S. District Court in Tacoma, calling the hospital a “monopoly,” claiming it violates the federal Sherman Antitrust Act and challenging the growing trend statewide of hospitals employing doctors.

In response, an OMC spokesman said Witham’s suit is “without merit” and that OMC’s “business practices have been legal and ethical.”

The Port Angeles medical oncologist alleged in his suit, filed July 8, that the medical center and its public hospital taxing district is illegally driving him out of business and violating the law by directly employing doctors to unfairly compete with private physicians such as him.

The hospital’s intention to hire a second medical oncologist will virtually put him out of business, according to the lawsuit, which says OMC is trying to “systematically destroy” his practice.

“OMC has now obtained monopoly power over the delivery of most professional medical services in Clallam County,” the lawsuit says.

Witham is seeking unspecified damages and “an amount equal to three times the actual damages” he says were inflicted by OMC, along with his attorneys’ fees and costs, according to the suit.

The hospital’s actions, which he claims include disparaging his reputaton “by using words to the effect that Dr. Witham ‘is not a good oncologist,'” have cost him “hundreds of thousands of dollars in losses,” the suit says.

He also claims he has experienced a “precipitous decline” in new cancer-patient referrals because of the hospital’s aggressive hiring of doctors and specialists and the hospital intentionally diverting referrals away from him to generate profit.

Witham also takes aim at OMC for its practices toward the general public.

He claims the hospital charges patients “two to three times as much for chemotherapy drugs than the same patients are charged when they are furnished by an independent physician in private practice, thereby generating $10,000 profit per patient encounter.”

In addition, he said OMC hospitalists — dedicated in-patient physicians who work exclusively in OMC — are steering patients away from their regular specialists, putting those patients’ health in danger.

The suit also names Olympic Hospitalist Physicians as a defendant in the suit.

Contacted by the Peninsula Daily News, Witham said he had no further comment beyond what is contained in the lawsuit.

The hospital was served with the suit last Thursday and has until July 29 to officially respond, according to OMC attorney Craig Miller of Port Angeles.

‘Without merit’

Marketing manager Jeff Anderson issued an e-mailed statement responding to the lawsuit.

“Olympic Medical Center believes that all allegations set forth in Dr. Robert Witham’s complaint are without merit,” the statement said.

“We are confident that our business practices have been legal and ethical.

“Olympic Medical Center will vigorously defend against Dr. Witham’s allegations and is certain that all claims will be addressed favorably in the public’s interest.”

Jim Cammack, former owner of Jim’s Pharmacy in Port Angeles and a member of OMC’s seven-member board of commissioners, said he was aware of the lawsuit.

“I really don’t have any comment at this time because it is a litigation matter that is being handled by the hospital’s attorneys,” he said.

Witham’s wife, Cindy, had been a member of the OMC board of commissioners but quit last March.

Mrs. Witham said her resignation had to do with “outstanding irreconcilable differences involving the board and various policies.” She would not elaborate.

2004 battle

Witham’s allegations harken to a well-publicized campaign he waged in 2004 against Olympic Medical Center.

He bought an advertisement in the Peninsula Daily News that accused OMC officials of trying to monopolize cancer treatment in Clallam County and keep him from being part of the new Olympic Medical Cancer Center.

He also said hospital officials were spreading fictions about him and his qualifications.

It prompted an outpouring of support from his patients, who criticized hospital commissioners at public meetings and in numerous letters to the editor.

The hospital responded that it was providing sorely needed medical services to the community at a time that private-practice doctors were shuttering offices due to low Medicare reimbursements and other financial hardships.

Witham and the hospital reached an agreement that included Witham getting access to practice in the cancer center in Sequim.

“There were some compromises reached,” Miller said.

“I don’t know whether they resolved all the issues, and apparently they didn’t.”

In 2005, Mrs. Witham defeated incumbent hospital commissioner Dr. Jorgen Quistgaard for a seat on the OMC board.

“Cindy was a hard-working, fiscally conservative board member,” said Eric Lewis, CEO of OMC, in a statement after her March resignation.

“She had many accomplishments while on the board, including making the VA Clinic a reality.”

Her term would have expired in 2011. The board named John B. Nutter, a Port Angeles police officer and former OMC finance director, to replace her. He is up for election this fall for the final two years of Mrs. Witham’s term.

To OMC’s insurer

Witham is represented by the Seattle law firm of K & L Gates LLP and Langley lawyer Robert N. Meals.

Miller said the lawsuit will be referred to the district’s insurance carriers and will not likely be discussed by the OMC commissioners when they hold their regular meeting in the hospital’s Linkletter Hall, 939 Caroline St. in Port Angeles, at 6 p.m. tonight.

Miller said the suit had to be filed in federal court, which decides on challenges based the federal Sherman Antitrust Act, which Witham is citing in alleging the hospital is acting like a monopoly.

“It’s in federal court, which means this could be a lengthy process,” Miller said.

State law governing hospital districts “does not authorize a public hospital district to employ physicians to compete with independent physicians who practice within the hospital district,” according to Witham’s suit.

“This case involves a hospital’s use of illegally obtained monopoly power to systematically destroy the medical practice of an experienced physician with whom it has been competing for business in Clallam County, Washington, since 2004,” the suit says.

“OMC has now obtained monopoly power over the delivery of most professional medical services in Clallam County.”

The hospital also “threatens the public health and safety” by forcing some patients to wait for weeks before seeing OMC’s oncologist and “has abused its tax-exempt status and taxing powers” to “stockpile cash,” Witham claims.

Witham provides oncology services from his office one block from the hospital. He also has physician privileges at OMC.

He had been a doctor in Clallam County for 30 years and was treating more than 100 cancer care patients a month as of four years ago.

He now also practices in Olympia and sees cancer patients elsewhere in the Puget Sound area.

He is an independent investigator with the National Cancer Institute and a member of the boards of the Washington State Medical Oncology Society and Washingston State Cancer Control Parnership.

Olympic Medical Center dominates medical services in Clallam County, owning and operating seven clinics and the cancer care center in Sequim.

Its market share of medical oncology services has grown from nothing in 2000 to 25 percent in 2005 to “approximately 95 percent” today, the suit says.

“OMC’s market share will soon increase even further now that OMC is recruiting a second medical oncologist employee.

“By doubling its capacity to treat cancer patients in needs of medical oncology services, OMC will wipe out any vestiges of competition from independent oncologists, such as Dr. Witham.”

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Staff writer Paul Gottlieb can be reached at 360-417-3536 or at paul.gottlieb@peninsuladailynews.com.