Does the Twin Cities need five children’s hospitals?

Expansion of Fairview Children’s comes at a time when health care costs have never been higher.
May 06, 2009

Children’s Hospitals and Clinics, St. Paul . Gillette Children’s Specialty Healthcare . Children’s Hospitals and Clinics, Minneapolis . Shriners Hospitals for Children.
When the University of Minnesota Amplatz Children’s Hospital opens in 2011, a fifth major children’s hospital will be added to that list.
Critics of the multimillion dollar expansion believe the new campus will only contribute to duplication of services and increased costs — at a time when health care spending has never been higher.
Russ Williams, vice president of the University of Minnesota Amplatz Children’s Hospital , said the new facility on the West Bank campus of the University Medical Center, Fairview won’t add capacity in terms of hospital beds.
“We’ve lived as a hospital within a hospital,” he said. “We wanted to create an environment completely dedicated for children.”
But opponents say the Twin Cities doesn’t need a fifth children’s hospital and quite frankly can’t afford one.
During talks with Children’s Hospital in 2006 about possibly combining efforts, the community wasn’t included effectively, according to former Sen. David Durenberger, R-Minn., who is currently the head of the National Institute for Health Policy .
“The presumption that just building a new hospital is a community benefit is a contestable presumption,” he said. “At some point, it adds unnecessary cost to the community.”
But specialty pediatric care is business of heavy returns. In 2007, the “bottom line” revenues in excess of expenses for both Children’s campuses and Gillette combined were nearly $57 million, according to Minnesota Department of Health Care Cost Information System data . Shriners did not report data for 2007 and the University of Minnesota Medical Center, Fairview did not break out information specifically for pediatric care.
In 2006, officials met to discuss the possibility of a joint venture between the University of Minnesota, Fairview and Children’s.
“We just were not able to come up with a financial model that all parties could feel comfortable with,” Williams said. The University and Fairview then moved forward on what is currently the new West Bank facility.
The University and Fairview are still in the “silent” phase of fundraising for the new facility, Williams said, but he noted a $50 million gift from Caroline Amplatz in honor of her father, former University professor and medical device inventor Dr. Kurt Amplatz .
Both Durenberger and representatives from the Citizens League say they are unsure as to whether the community can even afford to house a fifth major center for pediatric care.
A 2006 report by the Citizens League, “Developing Informed Decisions,” concluded a new process “must be established where Minnesota defines ‘need’ for medical care in medical facilities.”
“One of the things that really concerns us is that the research shows that if you have groups of hospitals competing in metropolitan areas that the cost goes up in medical care,” said Bob DeBoer, director of policy development for the Citizens League. “And you don’t necessarily get a correlating increase in quality in anything else.”
There’s no way of knowing in the existing system whether the Twin Cities would benefit from the expanded capacity to perform certain pediatric specialty procedures, he said.
But Williams said each of the five pediatric facilities have different areas of focus: Minneapolis and St. Paul being more community-based hospitals, Shriners focusing on pediatric orthopedic procedures, Gillette emphasizing on specialty procedures, and the University, Fairview on academic and high-end specialty work.
“There are definitely areas where we compete with Children’s,” Williams said. “We also have unique services.”
Whether the Twin Cities needs more children’s hospitals may be indeterminable, but Dr. Sydney Spiesel , a longtime pediatrician in private practice and clinical professor of pediatrics at Yale University School of Medicine, said communities do need them.
“One of the reasons why we have children’s hospitals is that general hospitals do a terrible job with children,” he said. “The values of most hospitals are focused on illness and disease, and they often lost track of the patients.”
Normal development of the patient is part of the big picture in pediatric care, Spiesel said. “Much of the time we don’t see ourselves in a great battle with death.”
Additionally, specialty facilities have become increasingly needed as “medicine has become more complex,” he said. “It’s just too vast for people to know everything.”
But specialty care is more expensive, largely because it is driven by procedures like surgeries and diagnostic imaging.
At Minneapolis and St. Paul Children’s, for example, more than 18,000 MRI and CT scans were performed in 2007, according to the HCCIS data. The two facilities share about 275 beds between them.
Spiesel said another major factor in rising health care costs is the amount of administrative costs that hospitals carry, such as costs to prevent against fraud and costs to meet hospital accreditation regulations.
“I’m often critical about the evidence that the care we give is based on,” he said. “But the evidence that the general system is based on is even weaker.”
Durenberger said overtreatment of patients is just one more concern about the number of pediatric facilities.
“The cost of unnecessary surgery, diagnostics and medical care generally is expressed in hospital admissions, diagnostic procedures, surgery, all that kind of stuff that doesn’t have to take place,” he said, adding that the costs get passed on to the entire community in the form of insurance premiums.
Durenberger said he worries that if the economic conditions don’t improve soon, the cost of the new facility and the equipment to fill it could turn out to be a bad decision.
“That’s the business of the arms race, and it’s all over the country,” he said. “People here at least spent many months trying to negotiate, but in the end they couldn’t reach an agreement and so we’re paying the bill.”
Because specialists in pediatric care could end up at one of five places, DeBoer said there’s possibility for dilution of the quality of care.
“In hospital work you want people who are doing the procedures fairly regularly; that’s a key issue in quality of care,” he said. “If I’m going to go to a surgeon, do I want somebody who does it a handful of times a year or a hundred times a year?”
As health care moves toward a more consumer-driven model with patients being encouraged to make informed decisions, more information needs to be available to consumers, he said.
“We came to this very fundamental conclusion that if we don’t make a serious change in the availability of information at the right level for people to use, that we’re going to keep having these increase cost problems without necessarily getting quality,” DeBoer said.
The problem may be there are just too many areas to try to compete in medicine, said Durenberger. For the University, having a multidisciplinary approach to invention and innovations, on top of entering a competitive environment in clinical enterprise, “there’s some of those things you don’t want to compete at, and you shouldn’t have to compete at.”
Still, “Good old Dr. Amplantz was a great guy,” he said. “But his name ought to be associated with invention and not replication.”

— Emma L. Carew is a senior staff reporter

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