A short jog from the Las Vegas Strip, Roger Collins is cruising side streets in his Lincoln Town Car. He gestures at a dusty tract of 1950s-vintage homes whose time is running short.
"It's all been rezoned. Medical office buildings are going up here soon," Collins, chief executive of Valley Hospital Medical Center, declares in his soft voice.
It's a far cry from Collins' first stint in the city as a hospital executive in the 1980s, when Las Vegas was approximately half the city it is now. "Life has gotten a lot more complicated," he observes.
That's because Sin City isn't just building casinos, hotels and golf courses at a madcap rate. It's also pumping out new healthcare facilities like a loose slot machine spitting out coins.
While hospitals elsewhere in the West are shutting down or merging because of financial constraints, Las Vegas will have opened up two in its booming northwest suburbs in less than two years. Meanwhile, Collins' hospital recently opened a 19-bed neonatal unit. Some $28 million in capital improvements are under way at Columbia/HCA Healthcare Corp.'s Sunrise Hospital and Medical Center to improve its surgical capacity. Another $15 million is earmarked to improve traffic flow into the hospital, where the sprawling parking lot is as teeming with cars as some of the casinos nearby. The University of Nevada's medical school also has begun construction on a $14 million, 80,000-square-foot education and ambulatory-care center.
"It's a busy and exciting time," says Jeanette K. Belz, president of the Nevada Association of Hospitals and Health Systems.
The boom is occurring despite the passage in 1991 of a state law that pegs increases in hospital rate charges to the Consumer Price Index, and a 1987 law that caps their profit margins at 17%.
Columbia opened $66 million, 114-bed Columbia Sunrise MountainView Medical Center in February 1996 in Las Vegas. Universal Health Services, meanwhile, is building Summerlin Medical Center, a $70 million, 149-bed facility with 110,000 square feet of adjoining medical office space that is slated to open this fall in the city. Summerlin is designed to expand to 400 beds, Sunrise MountainView to 300.
Packing 'em in. Sunrise MountainView was already running at 50% of its licensed capacity within two months of its opening, and by June of this year that figure had soared to 91%. One day in the first week of June, the hospital performed a stunning 42 surgeries-so many that some procedures were delayed by several hours and additional staff had to be brought in.
Indeed, the hospital filled so quickly that groundbreaking to expand to its licensed limit of 300 beds is scheduled for June 1998-less than 30 months after it opened.
"I'm probably the only healthcare executive in the country to say this: Las Vegas needs more beds," says Mark J. Howard, Sunrise MountainView's chief executive officer.
Yet despite the boomtown feel surrounding Sunrise MountainView and Summerlin, their design brings Nordstrom to mind. Lobbies are lined with earthy decorator stones, and furniture is upholstered in geometric designs. Sunrise MountainView has an enormous lobby skylight, a cafeteria that's actually inviting, and grounds splashed with colorful cacti and palm trees. At Summerlin, outpatients at its already opened cancer clinic are given soft terrycloth robes to wear during exams. All inpatients will have private rooms. Their visitors can buy cappuccino in the lobby.
"I can't wait for it to open. It's gorgeous," Universal Chairman and CEO Alan Miller says of Summerlin, his gritty Brooklyn accent softened by the tone of a youngster awaiting the start of baseball season.
Indeed, having pneumonia or major surgery could almost seem pleasant in these surroundings. Summerlin and Sunrise MountainView are surrounded by blocks of gleaming offices, shops and golf courses, all so new it appears they would squeak to the touch.
The only gaming tables in this part of town come with nets and paddles.
"There are two cultures in Las Vegas; the Strip culture and the conservative culture. This is the conservative culture," says MountainView's Howard in his relentlessly cheerful tone, as he gazes out his office window toward all the new construction. "This is a wonderful place to raise a family, just like the rest of suburban America. We don't all live in hotels."
Symbiotic relationship. Yet the two cultures, however divergent, are symbiotic. Sunrise MountainView was the city's first new hospital in more than 25 years. It and Summerlin were sorely needed after the casino operators began building massive new resorts a decade ago.
First it was the Mirage, then Excalibur, then Luxor, then MGM Grand, then New York, New York-$10 billion in total investment since 1989. Tens of thousands of job hunters have flocked here, and they're still coming. According to the Economist magazine, another $6 billion will be spent on building in the next three years.
The population of Las Vegas and surrounding Clark County has skyrocketed, growing at a clip of nearly 8% per year for the past decade and adding as many as 6,000 people in the city per month. As a result, the city's population has more than doubled since the early 1980s, to 1 million from 430,000. Nevada as a whole is projected to have 2 million people by 2000, double its population in 1987.
"All this growth has created just a tremendous demand for services," says Jerald F. "Mitch" Mitchell, CEO at 688-bed Sunrise, Las Vegas' largest hospital and one of Columbia's most profitable and frenetic. "We had seven hospitals back in 1970, when there were 300,000 people. (When the population grew to 1 million) we still had seven hospitals."
Mitchell should know: His hospital runs at about 85% of capacity these days, up from 80% a year ago. According to Baltimore-based healthcare information company HCIA, occupancy was only 72% in 1995 and 63% in 1993. (Data for 1994 weren't available.)
At Valley, occupancy jumped to 83% in 1995 from 77% in 1993. According to Collins, it's running close to 90% now.
Seasonal strain. That kind of growth can make any hospital executive sleep soundly at night. But it also puts the entire Las Vegas healthcare system under considerable strain. The city is a big draw for retirees of modest means; and in winter, people flee from colder climes. That's when the city's emergency medical system tends to overheat, swamped by patients with the flu and respiratory ills.
Often, local hospitals will go into emergency "divert" mode, meaning all their acute-care beds are filled and incoming patients are sent to other hospitals. According to published reports, every hospital in Las Vegas went into divert mode at least once during the week of Jan. 5. Sunrise MountainView was forced to divert in June, an unheard-of time of year to do that, Howard says.
Mitchell is trying to address the problem at Sunrise by cutting the time patients spend getting emergency care. The average "through-put" time is now three hours; Mitchell wants to reduce it to two.
"We have to put an emphasis on improving the emergency process and create the right environment to follow up so the people don't need to come back through the emergency room," he says.
But Mitchell and his colleagues concede Summerlin's opening will help reduce the stress, even if it is owned by a competitor. "We're going to need them," Howard says.
Unhealthy living. Meanwhile, the region's hospitals see their beds being filled for reasons other than just growth. Las Vegas may be among the country's most challenging populations to keep healthy. While its tourists may seek thrills on roller coasters threaded through hotel lobbies and gamble with computer-generated decks of cards, the health-consciousness of city residents is a relic from the time of the Truman administration.
According to a ranking of states by Minneapolis-based Reliastar Financial Corp., Nevada was the 48th healthiest state last year, tied with Mississippi and ahead of only Louisiana. It was 45th in 1995. Twenty-nine percent of Nevadans smoke, about four percentage points above the national average. In the Las Vegas region, smokers are nearly 31% of the population-about the same percentage of people who are overweight.
"I don't think you're going to find a lot of health clubs popping up," Valley Hospital's Collins says.
Area health plans, such as Las Vegas-based Sierra Health Services, are aggressively pushing smoking cessation and other preventive health programs to pare down their patient bed days. "It keeps us constantly going; we've had to introduce many initiatives," says Erin E. MacDonald, Sierra's president and chief operating officer.
Will the new construction eventually lead to the surplus of beds that plagues neighboring Los Angeles? Given that for-profit operators are spearheading the expansion, few believe it will happen.
Columbia and Universal have discovered that hospitals in Vegas can be as lucrative as gaming. Sunrise posted net income of $16 million in 1995, compared with $12.8 million in 1993, according to HCIA. Valley Hospital netted $33 million in 1995, up from $25 million in 1993. (Data for 1994 were unavailable for both hospitals.) In light of such performances, observers say, it seems unlikely that shrewd operators like Columbia and Universal would gamble it away on overexpansion.
"It's not going to get out of control," says Belz of the state hospital association.