Becker's Hospital Review

Sign up for the COMPLIMENTARY Becker's Hospital Review CEO Report & CFO Report E-Weeklies at www.BeckersHospitalReview.com or call (800) 417-2035 Christus Santa Rosa CEO Patrick Carrier says the former downtown facility was overbedded, and the two-year, $135 million renovation was the more attractive option than the estimated $450 million the hospital would have spent to build a new hospital. Portions of the hospital closed and some services were relocated to Christus' three other adult facilities in San Antonio last July while some floors were renovated, although the facility has remained open throughout the updates. Currently, half of the hospital is delivering children's services while the other half is renovated. When the project is complete late next year, Children's Hospital of San Antonio will host 215 inpatient beds dedicated to pediatrics.  Mr. Carrier says pediatric care quality at its adult downtown hospital was already strong, but market research showed San Antonio providers were losing many pediatric patients to outside the area, many to the highly specialized care offered at the prestigious Texas Children's Hospital in Houston, ranked fourth nationally in pediatrics by U.S. News & World Report this past year. "We didn't have the subspecialists to support it," Mr. Carrier says. "Good was getting in the way of great. We were offering good children's services. We had to take that next step." Drawing in those subspecialists was one major reason Christus opted for a freestanding children's hospital over one on its adult campus. "You've got to have the talent, you've got to have the facility that attracts and supports the talent, and this is a goal in process in the sense that it takes years to develop to the point of, for example, Texas Children's. It's a journey," Mr. Carrier says. That process has already made strides, as Christus has partnered with Texas Children's for clinical expertise and Baylor College of Medicine, which has a pediatrics department rated third in the nation by the National Institutes of Health, to provide physician staffing and training. In with the new After University Health called off the potential partnership with Christus, the Children's Hospital of Philadelphia approached the Health Science Center's leaders to share its plans to expand in partnership with Nashville, Tenn.-based for-profit chain Vanguard Health Systems to capitalize on the area's population boom, says the Health Science Center's Dr. González, who used to work for the University of Pennsylvania School of Medicine, which is affiliated with CHOP. The South Texas Medical Center, where the UT Health Science Center has its campus, has spare land where Health Science Center officials had hoped a children's hospital would be built where they could send medical students, Dr. González says. "Children's hospitals are special places, and [CHOP] has enormous expertise in building a network," Dr. González says. "The way we look at this [partnership] is not just having a hospital and medical center. The number of children who need to be taken care of as outpatients is much greater, and we want to be with a partner that can do this all over South Texas." Vanguard, which is backed by private equity firm Blackstone Group, fits the bill. The three-way agreement involves CHOP, the pediatric powerhouse; Vanguard, which has the deep pockets to build the anticipated $350 million standalone children's hospital; and the Health Science Center, which would be the clinical affiliate and can help to broker a lease of the foundation-owned land near its campus where the new hospital would be built, Dr. González says. Construction on the hospital is slated to begin early next year and could be completed in 2016. 13 Grow from within Methodist has had longstanding plans to expand and invest a "significant amount of money" in its children's hospital to create private beds and add capacity in specialty areas, says Gay Nord, CEO of the Medical Center Campus for Methodist Hospital and Methodist Children's Hospital. Methodist, like other local hospitals, had shown interest in a potential partnership with the Health Science Center and suspended its internal expansion plans while that option was being explored for more than a year, said JoAnn King, Methodist's director of public relations. So when the Health Science Center announced in September it had partnered with CHOP and Vanguard instead, Methodist resumed its internal expansion plans. Still, Methodist is skeptical that patient volumes will grow as much as its competitors claim, Ms. Nord says. Citing some market share growth with Methodist Children's with a slight decline in the competing system, "our data does not indicate the demand to substantially increase inpatient beds," she says. As a result, rather than build a new facility like its competitors, Methodist is opting to upgrade its children's hospital and continue to benefit from the clinical depth and breadth Methodist pediatric physicians feel is an important benefit to patients. Today the attached Methodist Children's Hospital hosts 120 inpatient beds and 32 pediatric treatment rooms in its children's emergency department, along with 78 NICU beds. Advancing pediatrics One common motivator behind Christus, the UT Health Science Center and Methodist's children's hospital strategies is the desire to attract more subspecialists to the region. Standalone children's facilities are central to Christus and the Health

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