In its second joint venture with a not-for-profit hospital, MedCath announced an agreement to build its eighth heart hospital late last month.
The 55-bed Heart Hospital of New Mexico, located in Albuquerque, will be a three-way venture among MedCath, two large cardiology groups and Albuquerque-based St. Joseph Healthcare System, which has agreed to close its heart program.
The heart hospital is slated to open by October at a cost of up to $45 million for construction and equipment. It will be adjacent to St. Joseph Medical Center, which will provide various services. MedCath will manage day-to-day operations.
Charlotte, N.C.-based MedCath previously announced a three-way agreement with Franciscan Health System of the Ohio Valley and physicians in Dayton, Ohio (Jan. 26, p. 16).
As in Dayton, the Albuquerque project has drawn criticism from competing heart programs, which say a new facility isn't needed.
Under threat is Albuquerque-based Presbyterian Healthcare Services, which claims the busiest heart program in the state. It will cease contracting June 30 between its health plan and about 40 physician investors who practice at Southwest Cardiology Associates and the New Mexico Heart Institute.
The physicians currently admit patients at Presbyterian and St. Joseph. To support its cardiac program once the heart hospital opens, Presbyterian has hired 10 physicians from the groups.
"These are physicians from both groups who have deep misgivings about the path their respective groups were on," said Peter Snow, senior vice president of Presbyterian's managed-care division.
Presbyterian was invited to invest in the for-profit facility, but it declined. Snow said the hospital would skim the most profitable patients by excluding transplant and pediatric cases and would provide an added financial incentive to turn away the uninsured.
Albuquerque physicians will own 41% of the joint venture, compared with 35% for the Dayton doctors. St. Joseph will own 35%, compared with 30% for Franciscan.
"This is a market where the physicians were organized to do a heart hospital before MedCath got there," explained Richard Post, MedCath's chief financial officer.