Roper, Trident or both?

Jun 15, 2009 — The Post and Courier

Katy Stech

Jun. 15, 2009 (McClatchy-Tribune Regional News delivered by Newstex) -- Berkeley County is the largest county in South Carolina without a full-service hospital, but that soon could change.

Two major local medical providers, Trident Health System and Roper St. Francis Healthcare, have proposed multimillion dollar hospitals in the fast-growing county during the next few years.

The projects are largely identical -- measured either by square footage, projected costs or hospital bed capacity -- except for location. Trident is proposing to build its three-story project in Moncks Corner, while Roper St. Francis wants to locate in the yet-to-be-built Carnes Crossroads neighborhood, an area where residential growth is expected to explode in the future.

The geographic difference pitted rural mayors against suburban growth-minded Goose Creek officials during what was a feisty hearing last month before the state Department of Health and Environmental Control.

A panel of DHEC workers reviewed both projects and have until June 27 to decide which health care provider, if not both, can proceed with plans.

The Post and Courier sat down with top executives from both health care companies -- Douglas Bowling of Roper St. Francis and Todd Gallati of Trident -- to discuss their rival proposals and other health care issues. Here are the edited excerpts.

Douglas Bowling: Vice president and chief strategy officer, Roper St. Francis Healthcare

Q: We've written about the project as a 50-bed hospital, similar to Trident. Can you tell me in your own words about the project?

A: The project is on 68 acres at Carnes Crossroads, which is at the intersection of Highway 17A and 176 in Goose Creek. ... We'll develop 16.8 acres of those acres for the construction of a new 50-bed hospital. ... And it will be a full-service community hospital with diagnostic imaging, an emergency rooms that's 24/7, operating rooms, intensive care units, all the components of a community hospital.

Q: Independent of the other project being proposed, why should yours be approved by DHEC?

A: We think our project has a lot of merit. It's truly in the epicenter of what Berkeley County is anticipating for both population and business growth. And in every other county in South Carolina and in any good health planning, you want to put a facility closest to the greatest part of the population. And we think we've done it.

Q: If DHEC is going to pick only one project, why should yours be the one?

A: One area where we disagree with Trident is we believe Berkeley County can easily support two hospitals. So I would hate to see DHEC do anything other than approve both. If they chose to only approve one, then I think you have to approve the one that will have the greatest access for the greatest number of people in the county. ... It's where the new Cane Bay High School is, so it's already on an established traffic pattern in the county. ... I mean, we just absolutely disagree with Trident's assertion that the county can only support one 50-bed hospital. ... We did an analysis of each county of similar size in the state and looked at the number of beds that exist in that county. So ... there's a wide range, but there is no county that's even close to Berkeley in population that doesn't have more than 100 beds. Most have more than 200 or 300 beds. One of the arguments that I've heard is that Berkeley County has beds because they reside in Charleston County. But if you go to Georgetown County, which ... with that population (58,970) sitting next to Horry County ... and the other hospitals up there, that county is supporting two hospitals with almost 300 beds. And both of those hospitals are wildly financially successful.

Q: The whole hearing seemed to center around whether you should build in a rural area or in a suburban area where the growth is supposed to happen. You don't feel there's a need for the rural hospital?

A: Oh, we do. I can see a need for

the rural. I think it satisfies a difficult health care issue but for a very small number of people. But when you talk about the folks in St. Stephen having to drive 40 minutes -- first of all, for emergency care, there are already two emergency rooms in Moncks Corner that are fully licensed 24/7 emergency rooms that handle everything. So with St. Stephens, when they talk about driving in an emergency situation, they're not having to drive past Moncks Corner now. But that being said, for the convenience of inpatient care, they feel beds are necessary there.

Q: Is health care recession-proof?

A: Absolutely. I think health care demand is not terribly elastic. That's been proven time and time again. There's a component of elective health care, but it's only elective for a period of time. So if somebody's knee is really bothering them and they put off that knee surgery, it's elective during the time they're putting it off. There's going to be a point where pain and mobility become an issue and it's no longer elective. So I think that's one of the things that makes this a little bit recession-proof. The unfortunate side is when people lose health insurance coverage and they're not seeing a primary care doctor.

Q: Do you see the recession making financing more difficult or even affecting the cost of the project itself?

A: Actually, we think this may make it a more affordable project in reality. The price of certain building materials has stabilized and come down in many cases. The price of labor has actually decreased so it may make the project financially more feasible.

Q: The Obama administration has proposed health care reform without being incredibly specific about their plans. Have you prepared at all for that or looked at how that could affect the project or your company in general?

A: We have looked at that very carefully. We actually have a team of our senior leaders who are very involved in reviewing everything that's coming out. We've two delegations that have visited Washington in the past six weeks and met with our congressional delegation up there to get a better handle on -- I think President Obama has eight points -- and how those will roll out is yet to be seen. I think we are all feeling confident that health care reform will be enacted this year.

Q: Do you have anything solid to grasp on to?

A: Not really. I mean, I think there will be some national health insurance plan that attempts to cover the uninsured. And that's probably a positive for us. Right now, that population is covered in the old-fashioned manner of they come in and we treat them and don't get paid for it, and yet those who do pay for it kind of cover it. So it's a redistribution of the resources, and that probably isn't bad.

Todd Gallati: Chief executive officer, Trident Health System

Q: Talk about the project in your own words.

A: What we're intending to do and hopeful that we'll do is, if approved, build a 50-bed hospital in Moncks Corner -- kind of at the center of Moncks Corner. And it's adjacent to where we've had some facilities there for a number of years. ... Really, what Moncks Corner, and upper Berkeley County, has now are primary care physicians. If you have a cold, that's where you go. But what we want to do is bring added specialists to the hospital and to that surrounding area so those patients don't have to travel so far.

Q: By itself, why is your project a good idea?

A: We're putting a hospital where there isn't one, clearly. I think when you look at the state health plan's goal of having a hospital within a 30-minute travel time of all South Carolina residents, that's a pretty lofty goal, but South Carolina's done a great job of that except in Berkeley County. It's been too long without a hospital in the county, and that 30-minute drive time is significant for anybody north of Moncks Corner -- Bonneau, St. Stephen, etc. It's very significant. I think we're talking about a 35,000 population in that region that aren't within that 30-minute radius.

Q: If DHEC picks only one project to move forward, why should it be yours?

A: I think clearly for that reason: There's more population density in the lower parts of Berkeley County and the Goose Creek area, but they have access to health care facilities. If you (take into account the proposed) Moncks Corner hospital and then you have Summerville (Medical Center), Trident and St. Francis, you could almost make the argument that Goose Creek residents already have four hospitals to chose from within 30 minutes.

Q: At the hearing, you said it would be a big mistake for DHEC to approve both hospitals. Do you still believe that?

A: Only one should be approved. I'm concerned when I look at the number of patients that would be seeking inpatient care, it doesn't seem to support two hospitals. There's two elements I look at in making that argument. One is clearly the financial element. Both hospitals by our estimation would lose a combined $58 million within the first three years of operation. That's not good for the economy. That's not good for the future of either of those two hospitals. You have to wonder if that would that cause one of those to close. But the other thing is, if you build two 50-bed hospitals, you're not going to see the expansion of those two hospitals into what I would characterize to be real meaningful hospitals. A 50-bed

hospital can't offer dialysis typically. It won't have a cath lab. It won't have the specialists that are really needed to attract patients. ... So if you can combine those two hospitals into one, maybe you can expand to 100 beds rather quickly. If you have a 150-bed hospital, you can provide cardiac services.

Q: Do you aspire to offer those types of services?

A: This is very much designed for expansion. As the community grows and as demand grows, it could quickly go to 100 beds or 150 beds.

Q: Do you have any time line for that?

A: I don't have a time line. It would have to be with growth.

Q: DHEC has to make sure there's enough people in the area to support a hospital before they approve the construction of a new one. Do you think that a smaller community like Moncks Corner can support a 50-bed hospital?

A: It clearly can. The estimates that we have show us at 40-50-60-percent occupancy in that 50-bed hospital in the first few years. Now can it grow into what we'd like it to be as quickly as we'd like it to be with 100-, 150-bed hospital? It certainly can, but is that going to take four years or is it going to take 10 years? That's the big question right now.

Q: Why are you choosing to move forward with this project during a recession? And were your plans to build another hospital accelerated at all after you found out that Roper bought land at Carnes Crossroads?

A: It's a good question. Although health care is not recession-proof, sometimes it is kind of demand-proof. But you have to wonder who's paying the bill. We'll begin to figure that out when we look at (President Barack Obama's) plan in the next few months. I think whether you're in a recession or not, you still need to look at the health care needs of the community and the timing was right to go out there. We know it's going to be a long process. ... We're talking about three-four years down the line, probably the best case 2012. So you're going to see economic swings even during that time, hopefully on the upswing by then. Not being here at the time that any land was purchased here by HCA (Trident's owner) or Roper, I don't know if it was a reaction to anything. I do know we were the first application for any hospital in the county. And that shows a strong intent by HCA to invest in the community and step out there first.

Q: Are you preparing for whatever changes the Obama administration could put in place by the end of the year?

A: I think what we're preparing for is to enter the debate. I think as I look at the news and some of the policy and some of the rhetoric that's going around just recently from Washington, you have to wonder if it's going to take all of us that have commercial insurance and force us into a government plan where maybe we have less choice and it may not be the plan that we're all used to, and we have concerns about that.

Health checkup

A rundown of the two hospitals being proposed for Berkeley County:

Berkeley Regional Medical Center

Provider: HCA Inc.-owned Trident Health System.

Size: 145,150 square feet.

Cost: $115 million.

Opening date: 2012.

Projected employees: 177.

Roper St. Francis Hospital-Berkeley

Provider: Roper St. Francis Healthcare.

Size: 138,750 square feet.

Cost: $112,978,119.

Opening date: 2013.

Projected employees: 286.

Note: Opening dates are likely to change. Also, the projected number of employees represents full-time equivalents as of 2015.

Newstex ID: 35760872