MedCath Corp. announced today it will close one of its 12 majority-owned hospitals, the 32-bed Heart Hospital of Milwaukee, after not quite 13 months in operation, and sell its assets to the four-hospital Columbia St. Mary's group, also in Milwaukee.
"Over the past year, we have focused our efforts on establishing the Heart Hospital of Milwaukee as a leading provider of cardiovascular care in the Milwaukee area," said John Casey, MedCath chairman, president and chief executive officer, in a news release. "At this point, we believe that it is in the best interest for MedCath and the hospital's physician partners for us to divest the facility."
The hospital is located in the Milwaukee suburb of Glendale.
With the sale, MedCath will retain ownership interests in 12 heart hospitals in eight states, including one in which it holds a minority interest, according to the company.
David Hooper, president and CEO of the Milwaukee hospital, which has a minority ownership interest held by 18 physicians, said the agreement calls for it to be shut down by the middle of the month. It would likely be used for a broad range of healthcare services, he said.
The hospital has a medical staff of 120 plus an additional 120 employees, 99 of whom are full-time, spokesman Alan Gaudynski said.
The MedCath Web site said the 60,000-square foot facility has three operating suites, three catheterization labs and a four-bed emergency room. Construction began on the hospital in July 2002, and officials there held an open house Oct. 11, 2003.
On Jan. 26, 2004, another group of physicians in partnership with the Milwaukee area's four-hospital Covenant Healthcare group opened the 126,000-square foot, 60-bed Wisconsin Heart Hospital in the Milwaukee suburb of Wauwatosa.
Leo Brideau, president and CEO of Columbia St. Mary's, said, "There are 13 heart programs in the Milwaukee area with a population of 1.6 million people in this (metropolitan statistical area), so it was inevitable one of them wouldn't succeed."
Bidreau said the hospital spend $42.5 million to purchase the hospital and its contents, well above the $35 million construction costs reported at its opening, a premium Bidreau said was driven by competitive pressure as well as the value of equipment and inventory.