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“Cha-Ching” is the sound of children’s hospitals turf wars

by Gary Schwitzer

In the Minneapolis-St. Paul hospital marketplace, there are some interesting expansion efforts underway. It’s not unlike what has been seen with hospital expansion in many other markets, but this story seems to have some peculiar oddities, and, although the latest round of hospital announcements made news in both local metropolitan newspapers this week, the real meat of some of the important issues at play have not drawn a great deal of attention. Issues such as:

1. How many children’s hospitals does one community or one region need?
2. Where is the public policy “voice” in the decision-making to allow competing hospitals to expand?

This week Children’s Hospitals and Clinics of Minnesota announced a $300 million plan to renew and expand its hospitals in Minneapolis and St. Paul. Earlier this year, the University of Minnesota Children’s Hospital announced plans for a new $175 million facility on its Fairview campus. These facilities are only about a long Justin Morneau home run away from each other. The St. Paul Pioneer Press reported :

“The announcement is a bittersweet reminder, though, that the Children’s, Fairview and Allina systems couldn’t consolidate their pediatric care into a single powerhouse hospital.

“Everybody made a good faith effort to try and make that work,” said Alan Goldbloom, Children’s president and chief executive officer. “In the end, the financial complexities just could not be overcome.”

Some health policy officials believe the separate Children’s and Fairview projects will create costly redundancies in care. Leaders of both hospitals repeatedly have indicated they would be better off with combined hospitals, so it will be interesting to learn if the public now embraces separate projects, said David Durenberger of the National Institute of Health Policy at the University of St. Thomas.

“One wonders why the community would invest upwards of $500 million without achieving the ‘national center of excellence’ it may be more eager to support,” he said.

The Minneapolis Star Tribune reported:

“Competition for young patients is growing. In addition to the University’s planned expansion at Fairview Riverside, the Mayo Clinic just opened its $15 million T. Denny Sanford Pediatric Outpatient Center. South Dakotan Sanford also gave $16 million to Sioux Valley Hospitals in Sioux Falls, S.D., for the Sanford Children’s Hospital. …

Peter Gove, co-chair of a Citizen’s League committee that looked at medical facilities’ decision making last year, said the current system for determining where and when hospitals and other medical centers get built is done without input from those who pay for it: Consumers.

“The system remains supplier driven, and the public policy role is limited,” Gove said.

There’s been far more coverage locally of separate stadium plans for the Twins pro baseball team and for the Vikings pro football team and for the University of Minnesota football team. But this is about health care, now representing 16 percent of the gross domestic product. It’s hard to understand why journalists haven’t made this a bigger issue in the Twin Cities. So it’s easy to see why consumers aren’t engaged in the discussion. And it’s easy to see how the spending and the expansion will go on.


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