Despite assurances from its former chief that the "mission and heritage" of Phoenix Memorial Health System would be continued under new ownership, the company that now operates the hospital plans to close its emergency room and convert the facility to a surgical hospital.
Privately held Vanguard Health Systems said it wants to shut the emergency room at 195-bed Phoenix Memorial and make the conversion just a year after buying the facility. Nashville-based Vanguard purchased Phoenix Memorial, which included a 43,500-member Medicaid HMO, out of bankruptcy for $39 million last year (April 23, 2001, p. 22).
Vanguard's purchase of Phoenix Memorial was heralded as a way to keep it open, despite speculation from competitors that the hospital would be closed (April 9, 2001, p. 14). "Every hospital purchase we've made has been with the intention of operating it," Keith Pitts, Vanguard's executive vice president, said at the time.
Last year in a letter to Modern Healthcare, Reginald Ballantyne III, former president of PMH Health Resources, said the transaction would ensure "the continuation of PMH's mission and heritage in serving the south central and west Phoenix communities" and "continue Phoenix Memorial Hospital's 67-year legacy of serving the poor and medically indigent" (April 30, 2001, p. 34). Ballantyne is senior vice president of market strategy and government affairs at Vanguard. At deadline, he was unavailable for comment.
Phoenix Memorial's emergency room would be replaced by an urgent- and primary-care clinic about five miles south of the hospital, closer to the residential neighborhoods that use the current emergency room, Vanguard spokesman Trip Pilgrim said. Pilgrim said the new clinic will be a more effective way to serve the low-income population that has moved to neighborhoods south of the Salt River.
Vanguard also sees the surgical hospital as the best use of the company's resources in Phoenix, Pilgrim said. Vanguard is building its sixth hospital, West Valley Medical Center, in Phoenix's western suburbs.
Pilgrim brushed aside questions about whether a surgical hospital would be more lucrative than a general acute-care hospital, or whether the urgent-care clinic would be cheaper to operate than a full-service emergency department. More than 80% of the emergency-room visits at Phoenix Memorial could be served at an urgent- and primary-care clinic, he said.
Vanguard expects to build on the heart program at Phoenix Memorial and add surgical services in specialties such as orthopedics, urology and gynecology, Pilgrim said. The conversion will not require a major capital outlay, and there is no target date for completion, he added.