‘Follow the Dollars’

Last updated on May 13th, 2019 at 02:39 pm

More hospitals are coming to the suburbs at the same time that some are being closed in the city of Milwaukee. The trend reflects the growing population of the suburban areas and the declining population of the city.

However, the biggest reason more hospitals are opening in the suburbs is that health care providers can make a significant profit there because the vast majority of suburban patients have health insurance. In the city, hospitals are struggling because a large percentage of their patients do not have health insurance.

“If you want to understand what’s going on, follow the dollars,” said Richard Blomquist, president of Milwaukee-based Blomquist Benefits LLC and past president of the Independent Business Association of Wisconsin. “It’s that simple. If it’s something (health care providers) feel they can build and make a buck, then that’s what they are doing, without regard to the impact on the community.”

Wheaton Franciscan Healthcare is building a 275,000-square-foot, $80 million hospital on a 55-acre site in Franklin at the northwest corner of South 27th Street and Oakwood Road. The facility is expected to open in late 2007. The hospital will focus on outpatient services, but will also be able to handle patients for overnight stays.

“That area, including Franklin, Oak Creek, and northern Racine County, are really some of the fastest growing communities in the state,” said Wheaton Franciscan spokeswoman Anne Ballentine. “Our research and our focus groups with residents revealed they were looking for convenient access to health care.”

The hospital will be built about 10 miles south of Wheaton’s St. Francis Hospital and Aurora’s St. Luke’s Medical Center.

“There is a need in that area for a facility of that type,” Blomquist said.

While Wheaton is building the new facility in Franklin, it recently closed all of the inpatient and emergency services at its St. Michael Hospital at 2400 W. Villard Ave. in Milwaukee. St. Michael is expected to lose $26.3 million in fiscal year 2006 and has lost about $100 million during the last five years, according to Wheaton Franciscan.

Wheaton is still providing outpatient services at the St. Michael campus, which will be renamed Wheaton Franciscan Healthcare Glendale, but the main building there is mostly vacant. The facility is located right at the Milwaukee-Glendale border. Wheaton hired Wauwatosa-based Irgens Development Partners to help it determine what to do with the main building on the St. Michael campus.

The patients from St. Michael will likely go to Wheaton’s St. Joseph Regional Medical Center at 5000 W. Chambers St., Aurora Health Care’s Aurora Sinai Medical Center at 945 S. 12th St. and Columbia St. Mary’s at 2323 N. Lake Drive. The shift of uninsured patients from St. Michael will put added financial burdens on those other hospitals.

Wheaton is expanding its emergency room and other operations at St. Joseph. Also, Wheaton renovated a floor for a new mental health and addiction care unit at St. Francis hospital to handle those patients who previously went to St. Michael.

As Wheaton builds in Franklin, Aurora is still fighting a long-running battle to build a new hospital in or near Oconomowoc. Aurora wants to build an 88-bed hospital in the Pabst Farms development at Interstate 94 and Highway 67. Last year, a plan to build the hospital southeast of that interchange, in the Town of Summit, was rejected by the Waukesha County Board.

Aurora has re-submitted its plans to build a hospital in Oconomowoc. However, the health care provider would rather build the hospital on the Town of Summit site south of I-94. In addition, Pabst Farms Development wants to use the 43 acres that Aurora controls north of the freeway for a 1-million-square-foot regional shopping center.

City officials and executives from Pabst Farms and Aurora are negotiating a possible settlement that would allow Aurora to build the hospital in the Town of Summit and free up the land north of I-94 for the retail development. Those negotiations could be completed this year and finally end Aurora’s long battle to build a hospital in western Waukesha County.

“We’re hopeful for a quick resolution of this,” said Aurora spokesman Jeff Squire. “It’s been more than five years. We think the time is right to resolve the matter. We hope to settle this whole matter out of court.”

However, for now,  Aurora is moving ahead with its plans to build the hospital in Oconomowoc, which would throw a wrench into Pabst Farms’ plans for its regional shopping center development.

“At this point, the path we are on is in Oconomowoc,” Squire said. “The land is properly zoned. We are moving forward.”

ProHealth Care has been a vocal critic of Aurora’s proposed Oconomowoc hospital, saying it is not necessary in the area and would drive up costs. However, ProHealth Care is now planning a $37 million renovation and expansion project to its Oconomowoc Memorial Hospital that would add up to 11 beds, expanding it from a 79-bed hospital to a 90-bed facility. Aurora officials have criticized those plans, saying ProHealth Care is hypocritical for opposing its project and planning an expansion at the same time.

“We think it only reinforces what we have been saying for more than five years, which is that the regional growth of Oconomowoc and western Waukesha County requires additional health care services,” Squire said.

However, ProHealth Care has said that its smaller expansion is more reasonable for the needs of the area. A ProHealth Care spokesperson could not be reached to comment for this story.

Blomquist has been a critic of Aurora’s plans for the Oconomowoc area.

“Aurora sees what is a market where they can gain additional dollars,” he said.

Another company wants to add a hospital to Waukesha County. Plano, Tex.-based LifeCare Hospitals plans to build a 60-bed hospital for acutely ill or seriously injured patients on 40 acres on Golf Road between the Willow Run Golf Course and the GE Healthcare complex in Waukesha. Construction could begin later this year and be complete next year.

The city of Milwaukee will lose another hospital when Columbia St. Mary’s closes the Columbia Hospital near the University of Wisconsin-Milwaukee in 2010.

Columbia St. Mary’s is consolidating its two east side hospitals with a $417 million project at its St. Mary’s campus on Lake Drive. A groundbreaking ceremony was held recently for the project.

The new 10-story, 835,000-square-foot hospital at the corner of Lake Drive and North Avenue will have 513 private patient rooms, a 32 percent reduction in the number of combined beds at Columbia St. Mary’s two existing hospitals.

Columbia St. Mary’s says the consolidation will save it $19 million in operating costs each year.

The project also includes a 162,000-square-foot medical office building, which will include a 40,000-square-foot cancer center, and a 155,000-square-foot medical office building, which will include the area’s first Whole Foods grocery store. The Whole Foods store will open in September in the Prospect Medical Commons building, under construction at the corner of the North and Prospect avenues.

Columbia St. Mary’s is in negotiations with the University of Wisconsin-Milwaukee to sell the Columbia Hospital property to the university, which is located next to the hospital.

“We believe that’s probably the best use for the campus,” said Columbia St. Mary’s spokeswoman Kathy Schmitz.

Sign up for BizTimes Daily Alerts

Stay up-to-date on the people, companies and issues that impact business in Milwaukee and Southeast Wisconsin

No posts to display