Denver hospitals are set to spend more than $1 billion carrying out strategies even their executives consider risky.
Their maneuvers have garnered the label "DIA Syndrome" from some market wits, whose diagnosis implies parallels to the long delays and budgetary excesses of Denver International Airport.
There is a valid analogy. The size of the airport, its costly automated baggage system and its distance from downtown will pay off if Denver grows as expected. And if Denver hospitals have read their market correctly, their spending today will bring higher quality and lower prices tomorrow.
If not, in both cases the Mile High City will endure the results of a colossal waste of money.
Consider these ventures:
Columbia/HCA Healthcare Corp. recently agreed to pay between $500 million and $600 million to acquire Rose Medical Center and to retire HealthOne debt under a joint venture.
The two hospital sponsors of Primera Healthcare expect to spend $80 million by the year 2000 building a primary-care network and boosting their new HMO.
Provenant Health Partners has embarked on $70 million in renovations at its two Denver campuses. Its partner, PorterCare Adventist Health System, is loaded with debt from its construction of two new hospitals six years ago.
University Hospital plans to spend $300 million to renovate or build new facilities by the end of the decade.
"We're seeing a lot of money being spent with little positive consequences right now for consumers and employers," said Claire Brockbank, vice president of The Alliance, a Denver-based coalition of 160 employers.
Why buy hospitals, critics ask, when hospital admissions are declining? Buying the practices of physicians, they charge, won't win their cooperation in controlling costs. Building new facilities, they say, is stupid in a market with so many empty hospital buildings.
To some extent, Denver hospital executives agree with their critics. "I see a lot of hospital strategy here but not a lot of integrated network strategy," said Michael Erne, recently recruited from Sharp HealthCare in San Diego to head Provenant St. Anthony Hospitals. "There is not unlimited money, and there are huge debts at most systems."
In defense, executives argue that their