Hospital Competition Heats Up in Southwest Washington

Portland-area hospitals eye an opportunity as the rush begins to further expand
By: 
Diane Lund-Muzikant
The Lund Report
January 21, 2010 -- Southwest Washington could become the next hotbed of competition among healthcare providers vying to gain a stronghold.    
 
Providence Health and Services, Kaiser Foundation Health Plan and Southwest Washington Medical Center all have expansion plans under way. That could spell trouble for health insurers such as Regence BlueCross BlueShield, HealthNet, LifeWise and ODS Health Plans. Since none of them own hospitals, those health plans could face trouble negotiating contracts, which could ultimately drive up healthcare costs.
 
 “The only conclusion I can reach is that Southwest Washington is under assault from diverse players,” according to a high-ranking insurance executive.
 
In 2006, Legacy Health System expanded into the area with Legacy Salmon Creek Hospital in Vancouver. For the first two years, the hospital lost money, but turned a profit for the first time in 2008, according to the Portland Business Journal. That same year, Legacy expanded the hospital to meet stronger-than-expected patient demand, the paper reported.
 
An investigation by The Lund Report revealed the following facts about the latest round of hospital expansions:
 
Providence Medical Group opened a family medicine clinic in Mill Plain last April, employing two physicians, and intends to hire two more doctors this year.  That site is owned by St. Joseph Health Services.  By the end of 2010, Providence plans to open another clinic in Camas.
 
Next on Providence’s radar is the Battle Ground area where the health system owns 9.59 acres of undeveloped land, which may eventually be turned into a hospital. That land parcel is located 2 ½ miles east of the city, according to Jan Bazala, a planner with Clark County.
 
Building a new hospital is at least 3-5 years away, according to Janis Sigman, program manager of the Washington Health Care Authority who oversees the certificate of need process. The first step is submitting a letter of intent, and, thus far, her office has not received any documentation from Providence. “It’s a fairly lengthy process,” Sigman said.
 
There are no pending requests from either Providence or Kaiser to build a new hospital, Sigman added.
 
Providence Child Center Foundation purchased the Battle Ground site in May 2006, and also owns 1.4 acres of undeveloped land in east Vancouver, according to the Clark County Assessment and Geographic Information System. 
 
In 2007 and 2008, Battle Ground was the fastest growing city in Clark County, outpacing Ridgefield, according to Bonnie Gilberti, public information officer for the city. Battle Ground was also the 7th or 8th fastest growing city in Washington during those same years. In 2009, its population stood at 17,150.
 
Not to be outdone, Kaiser Permanente has vacant land at its Cascade Park facility in Vancouver that could be developed into a hospital. Currently there’s a dental and medical clinic and birthing and midwifery center on that 14.78 acre site.  
 
Meanwhile, the longest standing hospital, Southwest Washington Medical Center, is awaiting state approval to add 82 acute care beds at a cost of $16.6 million. The original estimate was $13.3 million, however construction and equipment costs increased after the medical center changed the location of those beds. After gaining state approval, Southwest Washington will house 442 beds.  

 

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