110 Million dollar hospital planned for Spring Hill

[smeagolsfree]

The Tennessean is reporting that HCA wants to build a new 110 million dollar hospital for Spring Hill. This is not too surprising since that area is growing by leaps and bounds. I know Williamson county Med. Ctr. just expanded as well. I think we will see hospital expansions in a number of cities in the near future. Murfreesboro is expanding their hospital along with a new hospital that was built just a few years ago in Smyrna. I think there will probably be a new hospital in Cheatham in the next ten years.

Where do you guys see a need for new medical services over the next 5 to 10 years in Middle TN?

http://www.tennessean.com/apps/pbcs.dll/ar...9/1436/BUSINESS

[Hankster]

$112 Million for a 56 bed hospital! That works out to $2,000,000 per bed. No wonder health care costs have gone through the roof. This is another price that we pay for being so spread out. If the city were denser, there would not be a need for so many hospitals. The ones we would have would be larger, and the high cost of modern equipment (MRI machines for example) would be spread over more beds, and would be used a higher percentage of the time, thus having a lowering effect on health care costs.

[Boisefan]

i always wondered about the hospital thing in Spring Hill, i thought about it last summer when I was there, my thoughts were, "I wonder why nobody hasn't built a Hospital here yet...who ever does is bound to make some money..."

[ATLBrain]

$112 Million for a 56 bed hospital! That works out to $2,000,000 per bed. No wonder health care costs have gone through the roof. This is another price that we pay for being so spread out.

Hank,

I think I read that figure includes a Medical Office Building too. Additionally, some new hospitals in high growth areas go ahead and build several additional floors that are shells; and they'll be finished out for rooms as the need warrants. It's not easy to get a CON for an acute care facility, but when you're HCA or CYH or any of the big boys, it's a bit easier. If you already have the capacity, then you can get additional beds easier too. It has a lot to do with the perception that the competitors have if you build a completely new facility or just add onto it (i.e. brand new competition in the market vs. an existing competitor expanding). A phased build out is probably the case there too. So, with all the growth in S.H., it's not surprising to me that one is planned there. Didn't the article mention that S.H. should have 30+K residents in just 4 years?

[Boisefan]

wouldn't suprise me if Spring Hill had that many in 4 years, that place is growing(and spreading) like wildfire

[bnaflyer]

The Tennessean is reporting that HCA wants to build a new 110 million dollar hospital for Spring Hill. This is not too surprising since that area is growing by leaps and bounds. I know Williamson county Med. Ctr. just expanded as well. I think we will see hospital expansions in a number of cities in the near future. Murfreesboro is expanding their hospital along with a new hospital that was built just a few years ago in Smyrna. I think there will probably be a new hospital in Cheatham in the next ten years.

Where do you guys see a need for new medical services over the next 5 to 10 years in Middle TN?

http://www.tennessean.com/apps/pbcs.dll/ar...9/1436/BUSINESS

This project will have to be approved by the State and approval isn't assured. It will be strenously opposed by existing health care providers. This is a lot of money to spend when Spring Hill is located very close to two other hospitals and within a short drive of all of Nashville's (underused) facilities.

[Hankster]

Hank,

I think I read that figure includes a Medical Office Building too. Additionally, some new hospitals in high growth areas go ahead and build several additional floors that are shells; and they'll be finished out for rooms as the need warrants. It's not easy to get a CON for an acute care facility, but when you're HCA or CYH or any of the big boys, it's a bit easier. If you already have the capacity, then you can get additional beds easier too. It has a lot to do with the perception that the competitors have if you build a completely new facility or just add onto it (i.e. brand new competition in the market vs. an existing competitor expanding). A phased build out is probably the case there too. So, with all the growth in S.H., it's not surprising to me that one is planned there. Didn't the article mention that S.H. should have 30+K residents in just 4 years?

Let's say all these things you say are true. That still doesn't change the fact the HCA is spreading a $112 Million pricetag over a measly 56 beds, at least at first. I would hate to see what they decide to charge for room charges there. Everyone, hold on to your wallet!!! All this does in my mind is drive up the cost of everyone's health insurance rates. In my opinion, until Spring Hill gets quite a bit bigger, people in that area should drive about 15 minutes to either Franklin or Columbia for hospital care. It doesn't make any economic sense otherwise in my mind.

[Kheldane]

Let's say all these things you say are true. That still doesn't change the fact the HCA is spreading a $112 Million pricetag over a measly 56 beds, at least at first. I would hate to see what they decide to charge for room charges there. Everyone, hold on to your wallet!!! All this does in my mind is drive up the cost of everyone's health insurance rates. In my opinion, until Spring Hill gets quite a bit bigger, people in that area should drive about 15 minutes to either Franklin or Columbia for hospital care. It doesn't make any economic sense otherwise in my mind.

No, this shouldn't affect insurance premiums one way or the other. If the healthcare market were highly elastic, then you would actually expect health-care costs to go down in the region because of new competition where there was none before. But actually, insurance companies pay hospitals based on agreed-upon contract rates, so HCA will receive the same paymnet from insurance at its spring hill hospital as it would at any of it's other hospitals around nashville.'

This new hospital is part of HCA's "Kudzu" strategy. Basically, since they are for-profit, they can afford to build new hospitals faster than their competitors can because they can sell more stock and get cash anytime they want. This hospital will simultaneously cut into the bottom line of Williamson Co. Medical center and Maury Regional - which is a good thing because those two hospitals have been in the overly comfortable position of being the only healthcare providers for their regions. This new hospital will turn the competition up a few degrees and hopefully result in better healthcare and more options for the people of southern williamson, northern maury, and the counties beyond.

As far as driving for 15 minutes to get to a hospital, Hankster, that can seem like an eternity if you're having a medical emergency. I can hardly see why anyone would oppose a new Accute Care hospital, which takes emergency patients, especially when the project will be privately funded and add to the local tax base.

Certificate of Needs - thanks for mentioning that ATLBrain - are one of the major reasons healthcare is so expensive. All CON does is grant a monopoly to local hospitals and allow them to continue to charge high prices for low quality.

[LA_TN]

^ Yep. Pretty simple stratergy here, HCA wants to expand in that region and this would allow them to root out some of Wil Co Med Cntr's business.

Some sort of plastic-surgery/cancer/??? hospital was proposed for Baker's Bridge Rd over a year ago that was denied. They planned on having an ER as well, but common sense tells this was a bad idea from the start.

I would expect Spring Hill to go through, but the CON vote should be close.

[ATLBrain]

I can't improve upon KHELDANE's explanation on restrained competitive forces and demand elasticity in healthcare. I'll add just one thing to illustrate HCA's move in Spring Hill.

Let's say all these things you say are true. That still doesn't change the fact the HCA is spreading a $112 Million pricetag over a measly 56 beds, at least at first.

OK, it's been 10 years since my MBA classes, but here goes:

The key to your post Hank is the last two words, "at first."

Think of it as the difference between startup costs and costs related to ongoing operations. First of all, much of the former can be capitalized (i.e. mortgaged) over many years b/c its going toward long term assets. In order to get a healthcare business off the ground, you need to have a bricks and mortar presence. This is sometimes referred to as "barriers to entry" referring to potential new competitors. All industries have them ranging from low to high. When the barriers to entry are as high as they are in the hospital business, then HCA (and others) will buy-up as much land and building as makes sense. HCA is in a much better position to do this than, say, Joe's and Mabel's Hospital Company (a new company). No apologist for HCA, I dare say they can do it more cost effectively too.

HCA's move is both a defensive position (as noted above) and a gamble on the future demand for their services. So they buy 60-80 acres in S.H. and bet on future growth with a facility that's larger than they need initially. This will allow them to grow into it over X years without having ongoing construction just to keep up with the demand they'll be seeing soon. In the meantime, they can depreciate their building that they bought with 2006 dollars.

[crabbj]

I'm all for a new hospital. I read that as long as Maury Regional and Williamson Med Ctr don't object, it will become a reality. Both hospitals are more than 15 miles away from Spring Hill, and with the booming population, it surely would be comforting to have an ER in town without having to drive so far. Williamson Med Ctr would still have plenty of business serving north Williamson Cty, and the same for Maury reg. with all the towns south of Spring Hill. You would be amazed at how much this city has changed since 2001. It was almost commercially non-existent on the Williamson county side.

[rocky top buzz]

It seems like it would be more effective to have very few hospitals, but many, many Emergency Rooms. Before StoneCrest was built in Smyrna, there was an ER clinic on Enon Springs Road. While I think the new StoneCrest hospital and Medical complex is nice, If someone is planning a surgery, or is recovering from stroke, heart attack, etc.., then large facilities in Murfreesboro and Nashville would have ben suitable.

Although prior to StoneCrest opening, MTMC in Murfreesboro hadn't officially annouced they would be expanding, so you just had that one tiny hospital serving a population of 200k+. So you could use that to justify StoneCrest beucause a majority of those 200k+ live between Murfreesboro and the Davidson County line.

[satalac]

the company that my dad is a partner of (gresham, smith and partners he's in the healthcare department) has been picked to do this project. so far they are still in talks about if this is going to be built or not because of the hospitals in williamson and maury counties. he was telling me it's funny because hca tried to block williamson medical from doing some stuff using this same ploy. hopefully it won't come back to bite them. on a side note, he also told me that all of the partners knew about nissan coming to nashville 6 months before it was annouced because they are doing the building for nissan. he couldn't tell me though because of a confidentiality clause that they had to sign. sneaky little punks. haha.

[Rural King]

A basically irrelevant discussion between a few forumers got this thread WAY off track, so I took it out to get this topic back on track. This is not an economic theory board, if you want to argue economic issues make sure they relate to the issues at hand to some degree (ie arguing the economics of a stadium, state/local tax structures, etc are okay), this pure theory debate stuff has no place here and I'm not going to let it occur anymore.

Thanks.

[Lukin]

^^^ Thanks RK! It was beginning to feel like a high school debate class in here

[Kheldane]

^An interesting development! I'll try to keep my comments a little more accessible to the skyscraper-fan audience in the future , Rural King.

Is there a discussion board on UP where forumers are allowed to "follow the conversation where it leads them", so to speak? Are broad-ranging conversations allowed in the "Coffee House" for example?

Thanks!

[Nashvillain]

It's good to know that discussing economics of sports stadia is more relevant than the economics of health care and hospital construction. Thanks for clearing that up.

[satalac]

oh come on guys, give rk a break. it was getting a little off-topic. if you really want to talk about what ya'll were talking about, just make a new thread. that's what the forum is for. no need to get bent out of shape. the job of a moderator is to moderate.

[Rural King]

^An interesting development! I'll try to keep my comments a little more accessible to the skyscraper-fan audience in the future , Rural King.

Is there a discussion board on UP where forumers are allowed to "follow the conversation where it leads them", so to speak? Are broad-ranging conversations allowed in the "Coffee House" for example?

Thanks!

The best place would the the UP Coffee House, where the most open-ended and off topic threads can be started and discussed. This is where topics about economic theory, philosophical, and other general non-Tennessee specific discussions and threads need to go.

The Tennessee Coffee House is for off-topic discussion of topics/issues relating to Tennessee but not urban specific.

It's good to know that discussing economics of sports stadia is more relevant than the economics of health care and hospital construction. Thanks for clearing that up.

The discussion had strayed far away from health care or construction related issues for the proposed facility, and veered strongly into the area of a running ideological/philosophical/general debate on the economics of health care. Had the discussion been relevant to the threads topic to any degree I would not have moderated the thread or made the statement about restricting purely ideological arguments on the boards.

Again, its not taboo to discuss political, economic, social, etc related issues in regards to topics, BUT the discussion has to be kept in relation to the topic, it can't go off and turn into some running general ideological/philosophical debate.

[nomargin.nomission]

The hospital proposed for Spring Hill is a big problem. HCA's hospital will skim off the well-insured, good paying patients (who live in Spring Hill) and leave the two public hospitals in Franklin and Columbia to shoulder the burden of caring for the people who can't pay for their healthcare care. It's a classic carve-out strategy -- get the reward and avoid the risk of actually caring for needy people. It's a reason why our healthcare system is so broken.

[Kheldane]

The hospital proposed for Spring Hill is a big problem. HCA's hospital will skim off the well-insured, good paying patients (who live in Spring Hill) and leave the two public hospitals in Franklin and Columbia to shoulder the burden of caring for the people who can't pay for their healthcare care. It's a classic carve-out strategy -- get the reward and avoid the risk of actually caring for needy people. It's a reason why our healthcare system is so broken.

Hi Nomargin - welcome to the board! You are actually the second person to sign up just to post in this thread, which is very interesting to me. I think we've stumbled onto a very contentious issue here guys.

Unfortunately, you are not allowed to post on this aspect of the proposed hospital in this thread. I'm going to start a new thread in the Coffee House in a day or so (unless someone has already done it) to allow us to discuss the moral implications of the hospital, but for now, it is my understanding that this type of post (above) is not allowed in the urban topics forum.

So please check back into the Tennessee coffee house and see if I or someone else has started a topic about this.

Thanks!

[Rural King]

What nomargin posted was acceptable, as it was in reference to how he/she viewed the hospital in question would operate and effect its neighboring hospitals. The issue with the posts I deleted the other day was that they were not referencing issues relating the hospital in question in the discussion and it had turned into a generalized ideological/philosophical debate on the economics and practices of hospitals.

I hope folks who sign up to post don't do so just for one thread, it is welcomed, but I would love to see more participation from folks on other issues, esp. ones related to urban issues.

@ Kheldane - The general UP Coffee House is the place for a future thread on the general issue you wish to discuss, unless you are going to make it Tennessee specific.

Here is the link to the UP Coffee House:

http://www.urbanplanet.org/forums/index.php?showforum=4

Thanks!