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From the WSJ: A building boom under way in the
U.S. hospital industry is sparking concern
about economic.and geographic disparities
in health care.
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Much of the construction is occurring
in fast-growing suburbs, as hospitals target
the most affluent, insured patients
who can afford to pay for top care. At the
same time, many urban hospitalswhich
often treat poorer people-are
struggling financially, and scores have
had to shut their doors.
Propelled by low interest rates, the
need to replace outdated facilities and
the promise of future demand from an
aging population, hospitals around the
country have embarked on the biggest
construction spree in half a century. Between
2000 and 2005, the hospital industry
spent $100 billion to build new facilities
and expand existing ones, almost
double the amount spent in the previous
five-year period, according to figures 1 compiled by the U.S. Census Bureau. In
2005 alone, the spending hit $24 billion, a
record. A further $200 billion will be in-
, vested over the next decade, according to
the Robert Wood Johnson Foundation.
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For many patients, the boom will create a better hospital experience. In the
new buildings, they will rarely have to
share rooms with other patients, as they
do today. They’ll also have ready access to
the latest technology, ranging from electronic
patient records to sophisticated
brain scanners.
But a clash over hospital services in
the Chicago area spotlights the growing
concerns that a gap between haves and have-nots is widenina.
Advocate H e a l p , the a est ho -
oitxl operator in L icago, propose + earlier
this vear to close kev departments at its
nonprofit Bethany Hospital, which mainly
serves the urban poor. At the same time, it
was planning a major expansion of a suburban
facility. The shift of services from
the poor city to the mainly wealthy suburbs
angered some Chicago residents. Local
clergy helped organize a grass-roots
campaign to fight Advocate’s plans, holding
rallies, marches and prayer vigils.
The opposition came to a head at a June
public meeting in a local hotel, where
about 60 residents showed up waving signs
to protest Advocate’s proposal to shutter
the obstetrics, gynecology and mentalhealth
units at Bethany. Initially, the Illinois
Health Facilities Planning Board said
it was concerned about whether other area
hospitals could provide the services Bethany
was planning to cut, and voted to deny
Advocate’s proposal. The audience
erupted in cheers; some in the crowd sang
a victory song.
But in September, the board reversed
its decision on appeal and gave Advocate permission to close the birthing and mental-
health units at Bethany.
“It represents a defeat for the needy,”
says Mike Truppa, a spokesman for Clergy
Committed to Save Bethany Hospital, a coalition
of religious leaders and community
organizations that fought the closures.
Private and public hospitals face growing
financial pressures, amid rising nurnbers
of uninsured patients who fill emergency
rooms without paying their bills.
There were 46.6 million uninsured Americans
in 2005, an increase of 1.3 million
from 2004, according to the U.S. Census
Bureau. Health-care experts say the problem
is especially acute in urban areas.
Many hospitals-particularly public urban
hospitals that handle a heavy load of
charity cases-have been forced to truncate
services or close down entirely. A
study published last year in the New England
Journal of Medicine found that 16% of
city-based public hospitals were lost between
1996 and 2002.
Private hospitals, which usually have
no mandate to serve a particular community,
have been able to shift their sights to
the wealthier suburb’s. New medical cen-
New hospitals are being built in a . m t
suburbs, such as the Children’s Hospital
ters are springing up in the outskirts o a (t op)i n Aurora, Colo., outside Den&, even
~ n a t i .n1d lanagolis, ‘ Houston and Minne- assome facilities inpoor urban areasare
-m- olis. Several have been proposed tor rne’ struggling. In Chicago, Bethany Hospital, :ire;~;iroundC hicago. IJ Denvcr,
hospitals are beinrrbuilt in the
;md three existingdo\-
above, recentlyshuttered its birthingand
mental-health facilities.
uprooting stakes and moving there. According
to Denver Health, the city’s only
remaining public hospital, that means
there will be 39% fewer hospital beds in
downtown Denver just five years from
now.
“When we saw that number we had
chest pains,” says Patricia Gabow, chief
executive officer of Denver Health,
which researched the impact the hospital
moves would have on its operations.
If patients can’t travel to a suburban
location for treatment, then Denver
Health will be forced to take them in,
adding to the hospital’s already-heavy
hand she says.
already-heavy
~atientlo ad. she savs.
bas Health Care System and Atlantic
Re’alth-compete tor s%u rb-apn
At the sam’e time, smaller hospitals servingurban
areas of nearby Newark face falling
admissions, a growing burden of charity
care and poorer financial peSformance.
The result: several hospital closures
in recent years, according to a study by
the Center for Studying Health System
Change, a research group funded by the
Robert Wood Johnson Foundation. For the
remaining hospitals that serve Newark’s
poor, “financial constraints limit their ability
to upgrade facilities,” the report says.

its current space and says it’s
cheaper to build an entirely new facility
than upgrade the current one. To make up
for part of the decline in pediatric beds in
the city, it plans to open a downtown inpatient
facility for children, with 17 beds.
“We’re sensitive to the concern” that pediatric
patients in the city will find it harder
to get treatment, says Charles Reyman, a ,
spokesman for Children’s Hospital. “But
we’re not abandoningourresponsibility, because
there is asignificant population of undersemed
patients” in the suburbs as well.
The new hospital, which will cost $570 million
and will be 70% bigger than the old one,
is expected to open next October.
InJIortheI’II New Jersey, two private,
nonprofit hospital groups-Saint Barna-,
where everything fromYhousini to schools
to coffee shops are on the rise. The high
cost of building hospitals is another key
reason they are seeking affluent markets.
Hospitals must meet strict safety and
infection-prevention standards, and are
chock-full of high-priced, sophisticated
equipment. New guidelines, expected to
be followed by dozens of state regulators,
call for single-patient rooms as a minimum
requirement for most new hospital
construction. Hospitals argue that improvements
such as private rooms can
yield savings in the long run by reducing
infections, lowering patient-recovery
times and improving patient safety.
up costs for its 2.6 million members,
though it hasn’t calculated by how much.