Columbia/HCA Healthcare Corp. executives said they will go ahead with building a new $83 million children's hospital in Houston, despite pleas from rival providers.
The statement could indicate that Columbia's new leadership will continue the building plans of the chain's old rulers, although the company is abandoning other strategies that antagonized competitors.
The children's hospital is set to open in 1999; construction will begin in December.
"Houston is the largest city in the country that doesn't have two freestanding children's (hospitals)," said Linda Russell, chief executive officer of Columbia Woman's Hospital of Texas in Houston. Russell also is CEO of the new children's hospital, Columbia Children's Hospital of Houston.
Although Columbia initially promised to trim excess capacity in healthcare, particularly by closing empty hospital beds, former Chairman and CEO Richard Scott began pushing an aggressive building policy to expand.
According to past reports, Columbia has plans to build at least a dozen hospitals in markets where it hasn't been able to acquire sufficient acute-care facilities. Its executives say they are trying to finish their networks to compete. But critics charge Columbia is adding beds in already overbedded areas (April 14, p. 50).
Columbia's new Houston children's hospital will be located in the former 211-bed Medical Center Hospital, closed by Columbia two years ago. The company plans to gut and renovate the facility, which is on the campus of the women's hospital. "It will be virtually the same as building a new facility," said Sarah Peterson, a spokeswoman for Columbia's Greater Houston division.
Columbia decided to build the children's hospital after it failed to develop partnerships with any of the not-for-profit hospitals in the Texas Medical Center (July 14, p. 20).
Executives at existing Houston children's hospitals contend a new facility isn't necessary because their hospitals have plenty of empty beds.
Texas Medical Center CEO Richard Wainerdi and executives of at least four other Houston not-for-profits last week sent separate letters to Columbia's new head, Thomas F. Frist Jr., M.D., urging him to reconsider.
Hermann Hospital President and CEO David Page wrote: "It simply doesn't make sense to weaken this already highly competitive but well-served market. Further confusing to us is why Columbia/HCA, with all of its current problems-which have certainly not gone unnoticed in Houston-would undertake such a risky financial endeavor at this time. This letter is being written because of your recent statement . . . indicating you are not going to allow your company to go into communities where you are neither wanted nor needed."
The 655-bed Hermann and 41 other not-for-profit medical institutions are located in the Texas Medical Center, a 675-acre complex south of downtown Houston. Its tenants include 370-bed Texas Children's Hospital and a 150-bed children's hospital operated by Hermann.
The Columbia facility will be about two blocks away.
Columbia's Russell argued that smaller cities, such as St. Louis, have two children's hospitals. And, she said, the Greater Houston area would have sufficient demand for such services with 700,000 children age 14 or younger within its boundaries.