Universal Health Services last week opened the first in a chain of small hospitals that specialize in women's healthcare.
Universal's strategy is to take obstetric and gynecological services now performed in medical/surgical hospitals and combine the physicians' offices and inpatient services in a single building. Called Renaissance Centers for Women, the first facility opened in Edmond, Okla. The Universal division is planning a second facility to open in Austin, Texas, in early 1997.
"The physician can simply go downstairs when it's time to deliver a baby," said Ed Gray, chief executive officer of Renaissance Women's Center in Edmond.
The $7.2 million, 50,000-square-foot Edmond facility includes 15,000 square feet of office space on the second floor for physicians. The upscale building comprises 10 labor/delivery/recovery/postpartum rooms, four medical/surgical rooms, three operating suites and five neonatal intensive-care units.
Gray said officials are planning for 800 births and 1,100 gynecological procedures in the first year of operation.
Carving out inpatient revenue sources may become a popular tactic for investor-owned chains. For example, MedCath, a Charlotte, N.C.-based firm, is building heart hospitals. The first opened in McAllen, Texas, this year, and another is planned for Little Rock, Ark. In addition, Columbia/HCA Healthcare Corp. last year opened an orthopedics hospital in Houston.
"Hospitals view OB as a loss leader, but the hospitals often only look at the admission," Gray said. "When you look at all of the activity over a nine- or 10-month period in ultrasound and testing, you see that the OB business is profitable."
According to the American Hospital Association, there are 13 freestanding women's hospitals in the United States. Six are not-for-profit, and seven are for-profit facilities. Renaissance was founded in Oklahoma City by Michael Schuster, who opened a women's hospital in Midwest City, Okla., in 1994.
When the company decided to build another facility in Edmond, King of Prussia, Pa.-based Universal helped finance the development costs. Last month, the investor-owned chain of 29 hospitals bought Schuster's company, although the deal doesn't include the Midwest City facility. Terms were not disclosed.
Physicians do not have an ownership interest in the centers, said Jim Patton, M.D., an internist and a Universal assistant vice president who is heading the new division. However, physicians will be attracted by the centers' convenience and quality, and by a single information system, he said.
In Edmond, the hospital will compete with Edmond Regional Medical Center, a Columbia/HCA Healthcare Corp. facility.
However, the facility also will compete with other Oklahoma City-area hospitals, and "the only way to get market share is to take it out of somebody else's pocket," Patton noted.