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Hospital expansion trend brings challenges, opportunities

From the March ACP Hospitalist, copyright © 2007 by the American College of Physicians.

By Lisa Holton

Sidebar: What's being built?

In a bid to improve profitability and extend their reach into underserved areas, many urban hospitals are looking to grow outside city limits. The trend promises to bring more convenient, sophisticated services to more people, but some question whether these benefits will come at the expense of the poor and uninsured living in cities.

In 2004, the Robert Wood Johnson Foundation reported that through 2014, an estimated $200 billion will be spent on new hospital construction across the U.S. According to data from the U.S. Census Bureau, spending on private health care construction (hospitals, medical building and special care) increased 65% from 2000 to 2006.

The trend is toward smaller facilities that focus on 24/7 emergency care and outpatient services, limiting or eliminating overnight hospital stays that increase risk of infection. An anticipated increase in demand from aging baby boomers is another factor driving the boom.

On the plus side, expansion often means more jobs for physicians in newly built hospitals and more technologically advanced facilities. Potential drawbacks include less general care and more specialty care, higher costs and, in cases where suburban expansion occurs at the expense of urban facilities, reduced urban health care access and fewer employment opportunities for urban-based doctors.

"Many hospital systems are saying, 'We have limited upside growth in inner cities—where the real market is is in the suburbs. And what we want to do is move to where there are insured patients and where there is money,' " said Dennis Andrulis, PhD, MPH, director of the Center for Health Equality and associate dean of research at Drexel University's School of Public Health in Philadelphia.

An article in the May/June 2006 issue of Health Affairs reported the results of Round Five of the Community Tracking Study, which included 1,008 interviews from participants in 60 U.S. health care markets in 2005. In many areas, the authors reported, the hospital construction boom could be seen as a positive response to the needs of the community. However, the authors also warned that the poor may not always benefit. Improved access due to new construction and renovation will not be universal, the study found, and residents of lower-income areas may find themselves making do with existing aging facilities.

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Finding a balance

Still, hospital administrators contend that expansion, and the economic stability it promises, will enable them to continue to provide services to those who generally can't afford to pay for care.

Health care organizations need to work hard "to find a balance" between profitable expansion and serving the poorest in the community, said Deborah Molnar of Jewish Hospital & St. Mary's Healthcare in Louisville, Ky.

In Louisville, Ky., Jewish Hospital & St. Mary's Healthcare (JHSMH) is building satellite facilities that include 24/7 emergency facilities and specialized outpatient practices matched to the needs of the service area. Its newest facility is in Shepherdsville, Ky., a town south of Louisville near Fort Knox.

Health care organizations need to work hard "to find a balance" between profitable expansion and serving the poorest in the community, said Deborah Molnar, senior vice president and interim chief operating officer of JHSMH, a regional network of 70 health care facilities and 1,900 patient beds in Kentucky and southern Indiana.

JHSMH spent in excess of $33 million in 2006 on charity care, said Ms. Molnar, and that number is not likely to decrease despite the company's expansion efforts. But she points out that these more targeted, nimble facilities can find ways to deal with indigent care just as their parent companies find new centers of profitability. As one example, these smaller facilities with full-service emergency departments will serve a cross-section of poorer patients as most emergency facilities do.

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More jobs for hospitalists

For hospitalists, the building boom provides yet another dimension to a growing profession with an already-brisk hiring picture for the future. The Society of Hospital Medicine reports that the number of hospitalists in the U.S. will double to 30,000 between 2005 and 2010.

JHSMH is aggressively employing both hospitalists and specialists, said Ms. Molnar. In 2006 alone, the organization boosted its overall physician hiring by 54 percent. "We've chosen to grow through an employment model," Ms. Molnar said.

The University of California-Irvine Medical Center in Orange, Calif., plans to open a new $371-million main hospital building in 2009. Alpesh Amin, FACP, executive director of UC-Irvine's hospitalist program, sees new facilities as a recruiting advantage among the many needed in a tough job market.

"For a hospitalist program to be successful, it needs to have the right kinds of resources to facilitate success," he said. "Hospitalists tend to be younger and more computer savvy, and for some, a hospital that has more up-to-date technology and facilities has at least one more attraction for candidates."

Lisa Holton is a freelance writer in Evanston, Ill.

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What's being built?

According to a 2005 survey of 12 U.S. sites, there are four main categories of hospital construction:

1. New full-service hospitals or substantial expansion of existing general hospital capacity
2. New facilities or expansion of existing capacity for specific specialty services
3. Total or partial replacement of old facilities
4. Expansion of particular service areas for which patient demand typically exceeds the available supply of services

Source: Bazzoli GJ, Gerland A, May J. Construction Activity in U.S. Hospitals. Health Affairs. 2006;25:783-791.

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ACP Hospitalist provides news and information for internists about the practice of medicine and reports on the policies, products and activities of ACP. All published material, which is covered by copyright, represents the views of the contributor and does not reflect the opinion of the American College of Physicians or any other institution unless clearly stated