Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SUNDAY, July 16, 1995 TAG: 9507170021
SECTION: CURRENT PAGE: NRV-2 EDITION: NEW RIVER VALLEY
SOURCE: ELIZABETH OBENSHAIN
DATELINE: RADFORD LENGTH: Medium
If we had tabloid press in the New River Valley, we'd have screaming headlines and doctored photographs showing hospital administrators battling it out with bedpans.
Pulaski Community and Montgomery Regional hospitals' bid to edge out Radford Community Hospital to build a new Radford hospital reflects the fierce competition transforming health care nationwide.
From a sedate industry that could count on a steadily increasing stream of patients and dollars each year, health care has turned into a competitive fight for decreasing dollars. Words like "re-engineering" and "downsizing" have become part of the medical vocabulary. Nurses and other professionals recruited with bonuses only a few years ago now face cutbacks and layoffs.
For consumers weary of soaring health costs, however, this new competition also could mean lower medical bills.
This fall, we're going to have a fascinating front-row seat to watch this industry battle fought out locally.
Radford Community Hospital, part of the Carilion Health System that owns Roanoke Memorial and Community hospitals, has been planning its new hospital for years. In a typically gentlemanly fashion last month, it announced plans for a $60 million hospital and health care center just outside Radford at Interstate 81. The new hospital would have 97 beds - 70 for acute care and 27 for long-term care. The hospital now has only about 90 of its 175 beds full on a typical day.
How can it venture such an ambitious project at a time when hospital occupancy rates and revenues are dropping?
Does the New River Valley really need major hospitals within 15 miles of each other at a time when occupancy rates range from 50 percent to 77 percent?
Radford Community executives point out they already have saved $40 million over the past 15 years toward the new hospital's cost. They also say the new hospital would save $1.5 million annually in operating costs. But it is unarguably a tough climate for hospitals - one that a Carilion official admitted gave him "some gray hairs."
Columbia/HCA Healthcare Corp., the largest private hospital corporation in the nation and owner of the Pulaski and Montgomery hospitals, lived up to its reputation for being an aggressive competitor with its announcement July 5. Earlier this year, Pulaski Community Hospital pulled off a come-from-behind win, gaining state approval for a new cancer center that Radford Community Hospital also sought.
The Columbia/HCA hospital would be smaller, with 50 beds and a $26 million price tag and 300 fewer employees than Radford Community's new facility.
Will its smaller size appeal to the state health official who must approve a certificate of need?
Is its application a serious bid to build a new hospital? Or a negotiating strategy to make Radford Community trim back its size - and the threat to the other hospitals' customer bases?
Will the community favor a smaller hospital still in the city limits? Or will expectant mothers object to traveling to a sister hospital down the road to have their babies delivered?
The hospital battle has major economic implications for the valley and local governments as well. The four valley hospitals - Radford, Montgomery, Pulaski and Giles - employ 1,740 people. Montgomery Regional Hospital was Montgomery County's third-largest taxpayer in 1993-94, with a real estate value of $12.52 million.
Radford Community, as a nonprofit, pays no taxes, but points to charity care and to the economic growth its new center will generate as bigger pluses than a tax payment. The Columbia/HCA system touts that its hospital, in the city limits, would pay a hefty city tax bill.
The ultimate issue, though, is who will give the community the best health care at the most reasonable cost?
Radford and Montgomery County officials are watching the battle closely but seem reluctant to take sides (Radford City Council endorsed Radford Community's plans, but that was before its competitors announced their intentions).
The state health commissioner will decide which is a better deal for the New River Valley after a recommendation by a state hearing officer and a review by a citizens panel. The hearing should be held in September.
The decision could affect health care and health costs for the next 50 years in the New River Valley. For the two competing hospital corporations, it's a decision that will mean millions of dollars, so don't be surprised if you see more fireworks, if not flying bedpans, in these newspaper columns in the next few months.
Elizabeth Obenshain is the editor of the New River Current. If you have an opinion or an issue you would like the newspaper to address on the hospital issue, please call her at 381-1645.
by CNB