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A New Landscape of Health Care; How Will Two Hospitals in Clark County Affect Each Other and the Community?

Posted on: Monday, 1 August 2005, 18:00 CDT

Legacy Salmon Creek Hospital hasn't even opened, but Clark County's health care landscape is already rapidly changing.

While it could be years before the effect becomes totally clear, the $275 million, 220-bed Salmon Creek project paid for by Portland's Legacy Health System is undoubtedly producing winners, and some losers.

Local physicians and their staffs are scrambling to adust to a two-hospital community as they apply to see patients and sign up for training at the new hospital, expected to open Aug. 15.

As a result of Legacy's march into the community, Southwest Washington Medical Center, Clark County's largest employer and until now its only hospital, already has severed its relationship with a group of radiologists who wanted to work for both hospitals, and it has given its 1,000 nurses a new labor contract with an 11 percent pay increase over the next three years.

The medical center now is bracing for what the Legacy bow wave might produce in reduced business for its emergency department and other services.

Health care insurers, health maintenance organizations, and Washington state Medicaid officials are sorting out who will be covered by what programs, and at what hospitals.

For instance, Portland-based Managed Health Care Northwest, which provides health insurance coverage for 150,000 workers throughout the metropolitan area, including thousands of Clark County residents, will now only allow its clients to be hospitalized at Legacy Salmon Creek, not at the medical center.

"We would have preferred to have a contract with Southwest, as well, but they needed to offer us the same prices that we can get from Legacy," said Dolores Russell, CEO of Managed Health Care Northwest. "They said they couldn't do it." The change should not be a surprise, because Managed Health Care is majority-owned by Legacy Health System.

Meanwhile, Legacy Salmon Creek has triggered a medical office building boom in the surrounding area, bringing more traffic to an intersection already at the breaking point.

The community will be the ultimate big winner from the Legacy project, health care professionals say, because consumers will get a choice of hospitals and more services. Health care workers are likely to win better pay as both hospitals compete for employees. Emergency service providers, including local fire departments and American Medical Response ambulance service, will be able to deliver patients more efficiently to two emergency departments.

And health care insurers and HMOs, particularly Kaiser Permanente, who have wanted a second hospital in Clark County for a long time, are likely to negotiate tougher hospital care insurance coverage contracts by playing Southwest against Legacy.

Kaiser, which is building a 65,000-square-foot medical office building in Orchards, is in the midst of talks with Southwest to extend its five-year contract to exclusively hospitalize its patients there. Neither side would comment how how the talks are going.

With the Legacy Salmon Creek Hospital opening just two weeks away, many people are speculating on how big the effect might be:

* Will Legacy, which operates five other hospitals and care facilities in the Portland area, live up to promises made three years ago to bring basic health care services to fast-growing and under-doctored Clark County, and will it take on its share of money- losing charity cases?

Jonathan Avery, Legacy Salmon Creek Hospital administrator, said the hospital's emergency department expects to take "all comers."

"We know that a Clark County Health Department report reveals a continuing shortage of primary care practitioners in Clark County," Avery said. "We want to work with the Health Department and with Southwest Medical Center to achieve countywide solutions."

Carolyn Adams, office chief of the state's Medical Assistance Administration, said her agency is negotiating with Legacy on its reimbursement contract rate to handle nonemergency Medicaid patients paid for by the state. She doesn't expect the rate to be any higher than the one set for Southwest Washington Medical Center.

* How much will Legacy's emergency room lighten the load for the overcrowded emergency department at Southwest Washington Medical Center, where nearly 100,000 people a year walk in the door seeking help?

Avery said Legacy Salmon Creek is planning to handle about 30,000 patients over the next 12 months.

David Pletsch, crew chief and paramedic with AMR, which provides ambulance services to most of Vancouver, said he sees "everyone on the same sheet of music" with regard to how patients will be handled.

"We've got a clear plan on who goes where. ... If a person is conscious, they have a choice on where they want to go," he said. "If they're not conscious, we'll typically go to the closest appropriate emergency room." Once certain heart attack and stroke victims are stabilized, they would be transported to Southwest, the area's Level II trauma center, for further care.

"We still may take certain patients to Portland, if Southwest is on divert and not taking patients," Pletsch said.

* Will Legacy and Southwest build a collaborative relationship, or ---- as one Vancouver doctor put it ---- will a "medical arms race" break out between the two nonprofits? Such bitter competition has occurred in other two- and three-hospital towns, resulting in a divided medical community and diminished profitability for all while driving up costs for patients.

Joe Kortum, CEO of Southwest Washington Medical Center, said he's more concerned by the high percentage of patients from Clark County who are getting their health care in Portland than he is by Legacy Salmon Creek.

"If the county continues to grow as predicted, I'm assuming both hospitals will remain viable and healthy," Kortum said.

Southwest Washington Medical Center continues to position itself as a "sophisticated, full-service hospital offering specialized heart surgery, neurosurgery and cancer treatment," Kortum said. "Our own new nursing tower and 15 new surgery suites will contribute to that."

Tom Van Sweringen, executive director of The Vancouver Clinic, expects most insurance carriers to contract with both hospitals.

"We will be watching the evolution of how care is delivered in the community," Van Sweringen said. "Our strategy is to respond to the growth."

Dr. Phil Anderson, president of the Clark County Medical Society, said that what might be painful competition for the hospitals is good for the community and health care consumers.

"The winner is the community," he said.

Dr. Susan Hughes, a family practice physician, said she welcomes Legacy Salmon Creek even though two hospitals will make it harder on doctors.

"Southwest's ER does an admirable job, but the (patient) volumes are huge," she said.

Hughes' only lament is that Legacy is not designating any beds for psychiatric patients.

"Maybe the state should have mandated that, early on," she said.

* Will Legacy send patients needing certain special procedures to Southwest doctors or will it siphon off patients from Salmon Creek to established Legacy care programs across the river?

Dr. John Greves, a Vancouver Clinic cardiologist, said Clark County is lucky to have Legacy Salmon Creek come into the community.

"It's well-designed, well-thought-out," he said. "At the same time, we have a wonderful hospital in Southwest Medical Center. Legacy Salmon Creek won't do open heart surgery; we've been doing it here since 1993. It's very important that we continue to build superb (health care) systems in this community."

For Legacy's part, Avery said his hospital staff will "listen to patient preferences, do what's best for patients."

"There is the possibility that Southwest would be on divert and we would send some patients to Good Samaritan, as now happens," he said.

Legacy is touting its Level III neonatal intensive care unit and other family-related services. Southwest operates a Level IIB neonatal unit, which can take almost all the same cases. It will soon go to the state for Level III certification, Kortum said.

For Avery, a bigger issue is access to health care by lower- income Southwest Washington residents.

"We want to work with the Health Department and the Medical Center to get financial mechanisms in place to allow general practitioners to take low-income patients," he said. " With 400,000 residents, Clark County has a huge need for better access."

Brian Lindsay, executive director of Vancouver Radiologists, which ended its business relationship with Southwest Washington Medical Center earlier this year and will now work for Legacy Salmon Creek, is philosophical about the possible competition between the two hospitals.

"Going forward, everyone would do well to take a breath, not overreact or speculate too much," said Lindsay, who recently moved here from New York. "When the dust settles, the community will be a lot better off with a greater diversity and sophistication of services on this side of the river. The worst thing that could happen is if the competition is so fierce that those in the medical community have to align themselves with one or the other.

"It's not so simple as being a partner or a competitor."

LEGACY SALMON CREEK HOSPITAL

WHAT: Nonprofit primary care hospital owned by Portland-based Legacy Health System, which operates five other hospitals and care facilities in the Portland market, including Legacy Emanuel Hospital and Health Center, the Oregon Burn Center and Legacy Good Samaritan Hospital & Medical Center.

EMPLOYEES: 700 full-time, part-time and on-call workers.

PHYSICIANS: 334 with full privileges; another 200 in the queue.

SIZE: 460,000-square-foot hospital, 180,000 square feet of medical office space and separate parking structure.

LICENSED BEDS: 220.

ACTIVE BEDS: 80 to start, with ramp-up to 151 beds.

ANNUAL PAYROLL: $34 million, $9 million in benefits, when fully staffed.

OPERATING BUDGET: $70 million, through March 31, 2006.

PARKING: Six-story, 1,500-space garage.

SPECIAL SERVICES: High-risk obstetrical care unit and a 15-bed, Level III neonatal intensive care unit for at-risk newborns; children's emergency department; and an electronic medical records system.

OPENING: Aug. 15.

SOUTHWEST WASHINGTON MEDICAL CENTER

WHAT: Community-owned, nonprofit medical institution operating a primary care hospital at its main campus at 400 Mother Joseph Way, and urgent care and inpatient psychiatric services at the Memorial Campus at 3400 Main St. The medical center also operates Healthy Steps Women's & Children's Center, a program for low-income pregnant mothers and children. The medical center has begun a $146 million expansion that will create 154 private hospital rooms and add parking.

EMPLOYEES: 3,280 full-time and part-time.

PHYSICIANS: 545.

SIZE: Main campus, 568,000 square feet; Memorial, 147,722 square feet.

LICENSED BEDS: 442.

ACTIVE BEDS: About 275 for medical-surgical and psychiatric in- patients; another 45 designated for obstetrics.

ANNUAL PAYROLL: $147.4 million, and $44.6 million in benefits.

OPERATING BUDGET: $738.3 million gross revenue (net revenue, $345.6 million). Net income, $19.3 million, to be reinvested.

MAIN CAMPUS PARKING: 1,847 spaces, to increase to 2,136 this fall.

SPECIAL SERVICES: Southwest is a Level II trauma center accredited to handle emergency heart attack and stroke cases and most other trauma. The hospital has accredited centers for special care for cancer, heart and orthopedic patients, and a Level IIB neonatal intensive care unit.

EXPANSION PROJECT: New parking structure opens in the fall, with the new hospital space completed in December 2006.

Source: Columbian

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