New PVHS hospital draws criticism

LOVELAND — Poudre Valley Health System’s plan to build a $200 million hospital in Loveland is stirring debates over the need, location, motivation and impact the new facility will have on health care in the region.

Administrators for the Fort Collins-based hospital say the new facility is necessary to accommodate regional needs.

But officials for Phoenix-based Banner Health System — which owns Loveland’s McKee Medical Center and operates Greeley’s North Colorado Medical Center — say it’s a competitive move that will duplicate services and drive up health-care costs across Northern Colorado.

Both groups say the other refuses to discuss collaborative efforts.

“Their move to put a hospital two miles from McKee is just a grab at market share,´ said Charlie Harms, CEO for Loveland’s 100-bed facility. “It’s going to add to the cost of health care, there’s no doubt in my mind,” Harms said.

Preliminary plans for the new 85- to 115-bed facility focus on providing Level II trauma, cardiac-surgery and neuro-surgery services, none of which McKee currently provides. In support of the trauma program, the new hospital will likely offer nursery, pediatrics, obstetrics and gynecology programs, all of which are also offered at the Fort Collins hospital and McKee Medical Center.

Demand increases

“Since 1999, Poudre Valley Hospital has experienced an average 10 percent increase in higher acuity patients,´ said Stephanie Doughty, chief financial officer for PVHS. “Our projections are based on the volume we already have,” she said. “It’s not based at all on getting any additional business from (McKee).”

The hospital recently added 40 beds at the Fort Collins site, but space constraints make further expansion there impractical, officials said.

The new facility is a collaboration between PVH and Regional West Medical Center in Scottsbluff, Neb. Poudre Valley officials hope to establish a premiere facility for open-heart surgery, drawing on patients from western Nebraska, southern Wyoming and Northern Colorado, many of whom now travel to Denver for heart surgery.

Expansion is certainly not isolated to the region. Hospitals across the state are expanding to meet the needs of a growing and aging population.

For example, six hospitals in Northern Colorado and Southern Wyoming plan to add between 460 and 490 new beds over the next three years, totaling more than $630 million spent on hospital improvements.

But many in the health-care industry don’t think the pie is growing fast enough to support two hospitals just a few miles from each other in Loveland.

Population support questioned

“The community is going to have a hard time supporting two hospitals,´ said Dr. Douglas Webster, McKee’s former chief of staff. “I’d be surprised to see both of them survive the long haul. There just isn’t the population to support that.”

Webster said most physicians don’t have a strong allegiance with a particular hospital but choose one based on the patient’s best interests.

“I don’t think it will be detrimental to health care in Northern Colorado in general,” Webster said. “But McKee puts an awful lot of money into the community through free donated services. If costs go up, budget cuts will come in areas that are not necessary for hospitals to continue to function.”

But PVH officials insist that the services at the new hospital will complement and not compete with McKee.

“We are of the opinion that McKee is a very high-quality health-care provider and we don’t want to do anything to impede them in continuing to doing that,´ said Rulon Stacey, CEO for PVHS.

“If my goal were to pull market share from McKee, it would be a 220-bed hospital with 100 general-surgery beds,” Stacey said. “We’re bringing in services that are currently not available at McKee. We’re not duplicating services, we’re meeting unmet needs in a growing community.”

Stacey dismisses the notion that the new hospital will increase health-care costs.

“Our history has shown that at every expansion we’ve been able to decrease costs,” he said. “I guarantee it won’t drive up costs. People who are saying that do so out of a motivation of self-service.”

Where will staff come from?

But with a national shortage of nurses and medical technicians, many wonder where the staff will come from to fill a new hospital. Poudre’s expansion would require anywhere from 200 to 400 new nurses.

“With two hospitals in a town of 50,000, the question of staffing comes to mind,´ said Scott Bosch, Banner’s regional director. Bosch said the increased capacity would instigate a “price war for nurses that will just drive the cost of health care up.” That will lead to a trickle-down effect, he said, increasing hospital charges, which in turn would increase payments made by patients and employers. “It’s duplicative, unnecessary, highly competitive and intended to capture market share for Poudre Valley Health System,” Bosch said.

“I expect to see a lot more scrutiny at the community level and the financing level,” he said.

PVH plans to fund the expansion through a combination of reserves, bonds and possibly an FHA loan. An independent consulting firm is currently conducting a feasibility study as a requirement for the government loan and PVH officials expect a preliminary report in the next several weeks.

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