Business

Investing in Better Health

STORY BY Julius Karash

An epidemic of controversy broke out in the Kansas City area in 2002, when it was announced that HCA Inc. planned to acquire the Health Midwest group of hospitals.

HCA (now HCA Holdings Inc.) is a giant for-profit company in Nashville, Tennessee. Health Midwest was a locally controlled nonprofit organization. Many Kansas Citians expressed concerns about the meaning of the transaction for patients and the local health care community.

But Health Midwest, the Kansas City area’s largest health system, struggled financially and could no longer maintain its hospitals. And HCA, the country’s largest for-profit hospital chain, promised it would spend $450 million on improvements during its first five years of ownership, beginning in 2003, on top of the $1.13 billion acquisition price.

“One of the reasons Health Midwest was available for acquisition was that they needed an infusion of cash to reinvest in their facilities,” says Susan Kaufmann, vice president of marketing and public relations for HCA Midwest. “HCA was able to offer the access. They looked at community needs where there was a [Health Midwest] facility to determine how to meet those needs.”

The company also dug into its pockets. During that first five years it invested not $450 million, but $599 million in improvements here. As of March that figure had grown to $720 million.

The money has gone toward building new hospitals as well as expanding and renovating existing hospitals. Research Medical Center, flagship hospital of the old Health Midwest system, was rebuilt from the inside out. New hospitals were built in Independence and Lee’s Summit to replace older facilities, and major upgrades have taken place at hospitals such as Overland Park Regional Medical Center and Menorah Medical Center.

“The commitment and investment has been expanding what we have, modernizing technology and replacing aging facilities,” Kaufmann says. “Sometimes it’s easier to build [a facility] new from scratch than it is to retrofit an old building. You can only retrofit so much.”

RESEARCH MEDICAL CENTER
When HCA acquired Health Midwest, one of the commitments it made was to maintain health care services in the urban core, which has seen many hospitals close or move to the suburbs in recent decades.

The group’s main urban-core hospital also was its biggest—Research Medical Center, located on Meyer Boulevard west of Bruce R. Watkins Drive.

Research Medical Center was struggling at the time of the acquisition. Its technology had fallen behind, staff salaries were below the market rate, and many of the physicians who practiced there were unhappy.

“Certain commitments were made to the urban core by HCA,” says Kevin Hicks,  who is the president and CEO of Research Medical Center. “Since 2003, more than $120 million of capital has been invested in upgrading Research—the facilities and technology.”

Those upgrades include:
• A new cancer center with the addition of outpatient treatment
• A three-fold expansion of the Center’s emergency department
• Increased trauma care capability that has earned the state’s highest designation
• Improved women’s services, including the upgrading of neonatal intensive care
• Privatization of all patient rooms
• Expansion of the Research College of Nursing, a higher-learning institute
• Establishment of Research Urgent Care in downtown Kansas City

Hicks says HCA Midwest has improved patient satisfaction at Research, as well as employee satisfaction, with the annual employee turnover rate dropping from 24 percent to about 10 percent.

Another problem Research faced before the HCA acquisition was loss of physicians. Some retired, some left the community, and others moved to suburban hospitals. HCA Midwest addressed the issue by recruiting physicians who are directly employed by the hospital, Hicks says.

“This employee model was an expensive way to rebuild the medical staff,” Hicks says. But it’s a business model HCA accepted as the only way to maintain Research as a safety-net urban hospital providing highly specialized types of care, he adds.

Hicks notes that Dr. Willie Lawrence, the chief of cardiology at Research, was named national physician of the year last year by the American Heart Association.

The improvements and increased recognition have been accompanied by growing numbers of patients, Hicks says. “We’re a lot busier than we used to be.”

CENTERPOINT MEDICAL CENTER
HCA Midwest opened the Centerpoint Medical Center in Independence in 2007, at a cost of $250 million. The Center replaced two already existing hospitals: Independence Regional Health Center and Medical Center of Independence.

Residents of the area by Independence Regional who opposed the closing of their neighborhood hospital drove to Jefferson City to protest when the HCA Centerpoint proposal came before the Missouri Health Facilities Review Committee.

But at the end of the day, the committee agreed with HCA’s contention that one new hospital would better serve Independence than the two older hospitals.

The new hospital has led to a “significant improvement in our offerings and the quality of care HCA has been able to offer,” says Carolyn Caldwell, Centerpoint’s president and CEO.

Caldwell says HCA Midwest has grown tremendously in its market share since the opening of Centerpoint, which is located on E. 39th Street north of I-70. “We’ve grown in the number of trauma care patients that we’re able to take care of,” she says. “We’ve also seen significant growth in the number of emergency room visits,” which have grown from slightly more than 52,000 in 2008 to 60,600 in 2011.

Centerpoint operates a Level 2 trauma center and a Level 3b neonatal intensive care unit. “We can take care of the sickest babies,” Caldwell says.

The hospital also has had success recruiting physician specialists, Caldwell says.

Centerpoint announced last summer that it was expanding its surgery department, and it added a da Vinci robotic surgical system to its operating room last year.

In addition, Caldwell notes that Centerpoint won the 2012 Corporate Citizen of the Year Award from the Truman Heartland Community Foundation.

“HCA Midwest has definitely proven its commitment to this community,” she says.

OVERLAND PARK REGIONAL MEDICAL CENTER
In February, the Overland Park City Council unanimously approved a special-use permit to allow Overland Park Regional Medical Center to undertake a $120 million expansion.

“We’re very excited to receive this $120 million investment of private capital from our HCA parent company,” says Damond Boatwright, who is president and CEO of Overland Park Regional, located near I-435 and Quivira Road. “We’re going to add about 30 to 40 percent to the existing footprint, as well as do some much-needed renovations in the existing hospital.”

The project will include converting the hospital to all private rooms. Private patient rooms reduce the likelihood of medical errors, as well as better accommodate more modern medical equipment and enhance the patient and family experience, Boatwright says.

The expansion project also will triple the size of Overland Park Regional’s emergency department, Boatwright says, and add two rooms dedicated to trauma care.

In 2003, HCA Midwest brought trauma care back to Overland Park Regional and Johnson County—just 18 months after Health Midwest had shuttered the hospital’s trauma unit.

Last year, Overland Park Regional  Medical Center opened a multi-specialty heart and vascular/neuroscience lab.

“As community members, we want to make our community stronger and healthier,” Boatwright says. “Continual investments in our community will help us accomplish that goal.”

THE DOCTORS ARE IN
The physician group owned by HCA Midwest, known as Midwest Physicians, has doubled in size to about 300 physicians in the past two years, Kaufmann says. “Part of that is a commitment to making sure that we keep specialists in the urban core.”

Along with acquiring physician practices and welcoming them into the fold, HCA Midwest is investing more than $32 million in electronic medical technology for the Midwest Physicians group.

 “The investment has been significant,” says Midwest Physicians President Loren Meyer. “HCA Midwest has taken a very strong position in making sure that we are able to provide care to the communities that surround our hospitals.”

 

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