In much of the country, the Rio Grande is a symbol of the national debate on immigration. In Albuquerqueat least in healthcare circlesthe river is about to become a symbol of the competition between the three hospital providers in town.
Last week, one of those providers, the University of New Mexico, announced that it was bringing in reinforcements. The University of New Mexico Medical Group and Legacy Hospital Partners, Plano, Texas, said that they are in exclusive negotiations to form a joint venture to build a hospital west of the Rio Grande in Sandoval County, north of Albuquerque. If possible, the hospital will be built on the west side campus that the university is developing in Rio Rancho, N.M. The hospital would be the first owned by Legacy, which launched in January. The medical group is an independently incorporated not-for-profit organization.
The announcement came just a few weeks after another provider, seven-hospital Presbyterian Healthcare Services, said it plans to build its own hospital in Rio Rancho. Meanwhile, Ardent Health Services has invested $22.2 million in its Lovelace Westside Hospitalwhich is west of the river, but in Albuquerquesince it made two acquisitions and fused them into the local four-hospital Lovelace Health System five years ago. New Mexico does not have a certificate-of-need requirement.
Population growth and its shift to the west are spurring the provider race to cross the Rio Grande. The communitys growth is bounded on three sides and open to the west, so its the major avenue of population expansion for the entire community, said Peter Snow, senior vice president of strategic planning services for Presbyterian. The system already has a free-standing emergency department and surgery services on the west side, and 58 physicians employed by Presbyterian Medical Group practice there.
Weve been developing a health system on the west side for the better part of two decades. The hospital is the next logical step for us. Weve anticipated competition on the west side, Snow said of the UNM-Legacy proposal.
Presbyterian plans to build a 120-bed hospital with five operating suites and an adjacent medical office building at a cost expected to be $200 million or more, according to the system. Presbyterian expects to begin work this summer and open the hospital in fall 2010.
Legacy and the university physician group said they expect to form an 80-20 joint venture to operate the hospital, with governance divided on a 50-50 basis. They are planning on opening a 75-bed hospital that can be expanded to 150 beds, said Paul Roth, chairman, president and chief executive officer of the university physician group and executive vice president for health sciences of the university. The new hospital will be a general acute-care facility that will serve as a referral source for the 300-bed University of New Mexico Hospitals in downtown Albuquerque, Roth said.
The hospital also will serve some teaching and training functions for the universitys Health Sciences Center, which trains physicians, pharmacists, nurses and other allied health professionals, Roth said. Most medical students and residents will remain at the downtown campus, which focuses on tertiary and quaternary services, he added.
Legacy President and CEO Dan Moen said the hospital is expected to cost $130 million, with another $20 million in cost for an adjacent medical office building. Legacy hopes to conclude a definitive agreement within a few months and begin construction before the end of the year, with a planned opening in late 2010, Moen said.
The university physician group is expected to admit only about half of the new hospitals volume, Moen said. The medical staff will be open to independent physicians, who have been clamoring for a hospital in Rio Rancho, he said.
Presbyterians Snow isnt in favor of another for-profit hospital company in Albuquerque. He criticized Ardent for cutting back on less profitable services, such as emergency and mental health services. The new joint venture will bear watching to see how it handles indigent care and access to services, Snow said. For-profit healthcare has been disastrous for Albuquerque, he said. Well see how this works out.
Kevin Gwin, a spokesman for Ardent, disputed Snows criticisms. In an e-mail, Gwin wrote, In five years, we have invested more than $209 million into our Albuquerque facilities, including the aforementioned $22.2 million at Lovelace Westside. Ardent consolidated two hospitals in 2007 just as Presbyterian did so in the early 1990s, Gwin added. Lovelace operates more emergency beds than ever and does so efficiently to keep wait times down, he said.
Roth said Legacys tax status isnt an issue. Personally, I dont necessarily equate for-profit with evil empire, Roth said. Just because a corporation is structured in a certain way, it doesnt mean that they have no principles.
Snow also said there would be conflicts of interest if doctors are allowed to invest in the joint venture. Roth and Moen are open to physician investors if the medical staff has interest, but Moen emphasized that physician investors are not needed for the project to move forward.