Saturday, June 05, 2004

From the Atlanta Journal-Constitution (free registration required):

Children's hospital expansion approved

Children's Healthcare of Atlanta won state approval Friday for a $344 million expansion of its Egleston and Scottish Rite campuses. But the groundbreaking still might be a long way off.

The expansion has been opposed by Grady Health System, and if it appeals, the project could be delayed for months or even years.

Grady has argued that the expansion would lead to the demise of its own children's hospital. Grady officials declined to comment Friday on whether they intend to appeal the state's decision.

The Children's Healthcare plan to expand its two hospitals, Egleston and Scottish Rite, would be the most expensive hospital construction project in state history. It would increase the number of beds at both hospitals and expand emergency room capacity and other services, including space for support services for patients' families.

Children's Healthcare says it needs to grow to serve Atlanta's rising population of children and the current heavy load of patients.

In January, when Children's Healthcare filed its applications for expansion, its chief executive officer, James Tally, said the number of children in metro Atlanta is expected to increase by 140,000 by 2007, growing faster than in any other U.S. city.

Grady CEO Andrew Agwunobi, in announcing Grady's challenge to the planned project, said in April that the Children's expansion would force the shutdown of Grady's 82-bed Hughes Spalding Children's Hospital. Some of the financial success of Children's Healthcare has come at the expense of the Grady facility, Agwunobi said.

Hospitals must have a state certificate of need for major construction or expansion projects. The state bases its decision on community health care needs, and the process includes weighing arguments from organizations opposing the project.

Children's Healthcare, through a spokesman, declined to comment on Friday's approval, given by a unit of the state Department of Community Health.

Grady has 30 days to appeal to the state. If it ends up losing that appeal, it then could pursue a lawsuit to overturn the decision in Georgia courts.

Opposition to a state license can postpone the start of a hospital construction project for two years or more. Completion of the Children's Healthcare expansion had been targeted for 2007.

It's unusual for a metro area to have three children's hospitals, said Lew Yeouze, an Atlanta-based consultant for Mercer Human Resource Consulting. "In other metro areas, you have one, maybe two,'' he said.

Grady probably sees the dispute as ''another battle in a bigger war'' to relieve financial pressure and gain access to insured patients, Yeouze added.

Children's Healthcare of Atlanta was created by the 1998 merger of Egleston Children's Health Care System and Scottish Rite Children's Medical Center, which had been longtime rivals. Since the merger, the organization has emerged as a dominant hospital player in metro Atlanta.

Michael Rovinsky, president of Atlanta-based Integrity Consulting Group, a consulting firm, said Children's Healthcare and Grady ''serve two different markets, economically and geographically.''

Children's Healthcare draws more affluent and suburban families, while Hughes Spalding serves a higher percentage of inner-city patients, Rovinsky said. The quality of care at the two organizations is similar, he said.

Rovinsky added that he expects the state's decision to be upheld.

''For the markets that Children's serves, these projects are needed,'' he said

The loss of the children's hospital could hit Grady pretty hard and require it to cut back on more services. I want to bring special attention to the second-to-last paragraph:

Children's Healthcare draws more affluent and suburban families, while Hughes Spalding serves a higher percentage of inner-city patients, Rovinsky said. The quality of care at the two organizations is similar, he said.

One of the ways that Children's Healthcare of Atlanta has managed to accomplish this is by the effective job they have done in marketing themselves as a referral center. Their phone numbers are displayed at many areas of the pediatric floor. When I call the 1-800 number I speak to a physician, not a case manager or a machine, and I get on-the-spot acceptance of the patient. To my knowledge, Grady has no comparable program.
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