Hospital's clinic expansion put in limbo by negotiations

Hospital's clinic expansion put in limbo by negotiations

Dec. 7, 2000

By Jim Mimiaga
Journal Staff Writer

Southwest Memorial Hospital’s management is anxiously waiting for more room to expand the same-day surgery clinic at the hospital — urgency underlined by a private outpatient clinic being proposed in Cortez by a local physician.

"We need to get this done this fiscal year or risk losing credibility," warned Southwest administrator Bob Peterson during the November management meeting. "It would be a mistake to wait."

But the hospital’s plan is being held up by longer-than-expected lease negotiations between the hospital district and Continuum, LLC. The Greeley-based management company runs the Vista Grande nursing home adjacent to Southwest Memorial.

The outcome of those talks is a key component of Southwest’s plan to expand and streamline outpatient-care operations and procedures. Under a preferred alternative, Continuum would build a new nursing home on the hospital campus, an option under their lease, thereby leaving the existing Vista Grande facility open for expansion purposes.

The talks have stalled over issues regarding lease length and how much rent Continuum would have to pay the district for building a private business on taxpayer lands, officials say.

Other issues being discussed are checks-and-balances for Continuum performance, and quality-care requirements for the new facility, which Continuum would operate for profit indefinitely. Specifics of the talks and its problems are not known because the meetings are held behind closed doors. A contract-signing deadline is set for March 2001.

Southwest officers plan to relocate non-medical departments such as billing and administration to Vista Grande in order to make more room for expanded outpatient and same-day procedures on the first floor of the hospital.

Outpatient business is fast becoming the most lucrative aspect of the health care industry, a fact not lost on hospital brass.

"It is important to keep physician loyalty with this so that they choose us over a clinic down at the strip mall to do their procedures, because we offer a superior product," Peterson said.

The Southwest Health System board approved the spending of $25,000 for an architect firm to complete initial feasibility plans for the proposed expansion.

Critics of private, so-called surgi-centers argue they unfairly compete with major hospitals because they can perform same-day surgeries with less overhead than hospitals forced to support a multitude of services, equipment and staff.

Last month Montezuma County Commissioner Gene Story pushed for delivering a "strong message against a clinic that would hurt our community hospital. Strong public opinion against this can go a long way towards stopping it."

"A clinic would take the cream right off the top of the hospital business," said Commissioner Kent Lindsay.

But Dr. Bill Rainer, the physician proposing a new clinic with local partners, counters that competition is good for the industry, pointing out that if he does not do it then someone else certainly will. He notes that the efficiently-run clinics are preferred by insurance companies and other payers and says that there has never been a hospital that went out of business because of a competing private clinic.

SHS board member Dr. James Hanosh reported that some hospital staff members have also expressed concerns that a private outpatient clinic will hurt the hospital financially.

The topic was to be discussed at the next medical staff meeting.