It seems like at least once a year a large healthcare system in the Tampa Bay area announces a new building project.
The most recent example is the
Brandon Healthplex, now under construction on Palm River Road, east of Tampa. The 130,000-square-foot, five-story, outpatient medical center is a joint project between Tampa General Hospital and Florida Hospital.
St. Joseph’s Hospital-South opened in Riverview in February 2015, just five years after
St. Joseph’s Hospital-North on Van Dyke Road in Lutz.
The expansions by the bay area’s largest healthcare institutions are driven in part by the region’s growing population. Hillsborough County’s population is projected to grow 7 percent in the next five years, with about a 17 percent increase in adults over age 64 -- the prime users of hospital beds.
But the building spree is also part of hospitals’ continuing efforts to boost revenues while mitigating ever-increasing healthcare costs.
“I think everybody realizes the current system of care and the way we’re funding care is probably unsustainable,” says James Burkhart, CEO of
Tampa General Hospital. “If we don’t grab a hold of the issue of rising costs, we’re going to have huge problems in this country.”
For years, healthcare corporations have been shifting more and more patients out of high-priced hospitals and into less-expensive, outpatient centers. At Tampa General and elsewhere, more surgeries are done on an outpatient than inpatient basis, a complete reversal from previous decades. Tampa General’s average daily census is about 820. Of those, 70 or 80 are observation patients, considered ambulatory and outpatient, Burkhart says.
Not only are satellite ambulatory centers less expensive to run, they can also become new revenue centers serving higher-income patients.
Dr. Edmund Funai, COO at
USF Health, calls it “following the wealth.”
“There is a high degree of private insurance (in the suburbs) as opposed to government players,” Funai says. “The private insurers reimburse the hospitals at a much higher rate than Medicare and Medicaid.”
Portals for patient referrals
Most of the new outpatient centers include emergency rooms. The off-campus ERs can be used to boost revenues by funneling the more seriously ill or severely injured patients to the main hospital. Funai said that’s one reason the number of stand-alone emergency departments or urgent care centers has more than doubled in the United States in the last few years.
“It’s a portal,” Funai says. “You want to provide low-acuity care as close to home as possible, but when someone requires inpatient care you want your emergency department making that first referral into the high-acuity environment.”
BayCare, a regional healthcare system that includes St. Joseph’s Hospitals in Tampa, has opened 14 urgent care centers for illnesses or injuries that are not life-threatening. Not only are urgent care centers less-expensive to run than a hospital emergency room, they keep less-serious injuries out of the ER.
“We’re trying to get the right patients in the right locations because you don’t want to have to go to the emergency room for a sprained ankle,” says Lorraine Lutton, President of St. Joseph’s Hospital, a BayCare facility.
BayCare has also embraced telemedicine, a system where patients with less serious ailments can consult a doctor through a video chat on the computer. It helps patients who can’t get to a doctor right away and keeps them out of the more-expensive emergency room.
Another tactic hospital executives are employing to lower costs is called market consolidation. BayCare, in 1997, is an early example. The system united hospitals in Pinellas County -- Mease, Morton Plant, etc. -- with St. Joseph’s Hospitals in Hillsborough County. BayCare recently added Winter Haven Hospital and Bartow Regional Medical Center for a total of 14 hospitals in the not-for-profit’s system.
“Market consolidation allows systems to provide good services and to share the costs so that it’s a little bit more cost-effective,” says Lutton.
Providers pursue more collaborative efforts
Another example of market consolidation is the recent partnership between Tampa General Hospital and Florida Hospital. Called
West Florida Health, the partnership is collaborating on the Brandon Healthplex, an outpatient treatment center that includes a free-standing emergency room, an ambulatory surgery center, imaging services, physical therapy, primary care and specialty physician offices.
West Florida Health also launched a home care agency providing skilled nursing in Hillsborough, Hernando, Pasco and portions of Sumter counties. The new partnership, however, fell short in its attempt to set up a hospice care network. The state Agency for Health Care Administration granted West Florida Health a certificate of need for hospice care, but for-profit providers objected and won the appeal.
“The strategy behind West Florida Health was an effort to reduce the cost of medical care,” says Mike Schultz, President and CEO of Florida Hospital’s West Florida Region. The region includes nine hospitals in or near the Tampa Bay area.
“We felt that sticking up an urgent care facility on every corner -- us one side of the street and Tampa General across the street -- didn’t make sense,” Schultz says. “We felt we could do something together that’s not so capital intensive and make sure we provided the community with needed services.”
Don’t expect a noticeable slowdown in the healthcare center expansions anytime soon. The state of Florida does not require certificates of need for the ambulatory centers as long as they are tied to a hospital license. That means Florida Hospital or BayCare can build as many as they want. And Florida’s population surge shows no sign of letting up.
“It’s trying to get the patient to a level of care that is responsive to their illness and making sure they are accessible in their neighborhoods where the people are,” Schultz says. “That’s the track we’re in so we can provide a low level of care for less money.”