Hospitals – Is Milwaukee over-bedded?

Last updated on May 13th, 2019 at 02:23 pm

Hospital rates rose faster in Milwaukee than the rest of the state last year. A comparison of similarly-sized Midwestern cities in comparable metropolitan areas shows that Milwaukee has significantly more hospital beds per capita than other cities its size.

SBT compared the number of hospital beds per thousand to Columbus, Cleveland, Minneapolis-St. Paul, and Oklahoma City.
And hospital chains are in the process of building even more capacity in Milwaukee and elsewhere in southeastern Wisconsin.
It is noteworthy that the next-highest beds-per-thousand ratio is in Minneapolis-St. Paul, which is part of a 2.7-million-person metro area – versus the Milwaukee-Racine metro area, which encompasses a population of only 1.6 million.
Statistics can
be confusing, experts say
Beds-per-thousand numbers are not easy to interpret, however, according to a Waukesha-based health-care expert.
"The number of beds in any market can be attributed to many factors surrounding the provision of health care," says Sara Stanton, vice president of Seroka Healthcare Marketing. "Such considerations as specialty care, advanced technology including cardiac care, rehabilitation, the types of patients, including the elderly, newborns, and the evidence of a prominent diagnosis in the marketplace can certainly affect the number of beds created to meet the specific demand."
Stanton’s background encompasses executive, administrative and management positions with hospitals in Wisconsin and Arizona.
Wisconsin Health and Hospital Association Metro Milwaukee Vice President Bill Bazan agrees with Stanton that many factors can influence
beds-per-thousand statistics.
"In the metro Milwaukee area, we have 13 acute-care hospitals," Bazan said. "They are staffed based on usage. We do not overstaff and keep beds available that are not needed."
Some hospitals move staff back and forth between facilities, Bazan said. The resulting fluid nature of the number of staffed beds – along with spikes in demand – can inordinately influence staffed bed figures, according to Bazan.
"Over the past year, we have had an acute demand for general medical surgical hospital beds," Bazan said. "The flu epidemic of 1999 that hit around the time of Christmas vacation had us bulging at the seams. We had to postpone some elective surgeries, and were discharging people earlier in the day to make rooms available for new admissions."
Over bedding a
factor in consolidations, partnerships?
Over bedding may be behind a trend toward consolidations and partnerships between hospital entities in southeastern Wisconsin – including the recently-announced plans of Columbia-St. Mary’s to combine into a single hospital on Milwaukee’s East Side, for a net reduction in beds – from 688 to 340.
Elsewhere in southeastern Wisconsin, Kenosha Hospital and Medical Center and St. Catherine’s Hospital have moved under the same ownership – Wheaton Franciscan Services – to help them compete against Aurora, which opened a hospital in Kenosha in early 1999.
Froedtert in Milwaukee and Community Memorial Hospital, Menomonee Falls, have also formed an informal partnership. Both hospitals are part of the Horizon Healthcare organization. Froedtert is also affiliated with the Medical College of Wisconsin and, according to Peter Pursing, senior vice president for external affairs, the association with Community Memorial is one way to deliver the advanced resources of the medical college to the community.
"We do this for all of the above reasons – and for competitive reasons as well," Pursing said. "Both of our organizations contribute to the same bottom line, but we still need to earn their trust and build interest in working with us as a tertiary provider of high-level services. One of the ways to earn that trust is to partner with community-based providers and work with them in a cooperative manner."
Pursing said this is a more effective way to compete than building hospitals and clinics to act as a distribution system for health care.
"We are not a big fan of centrally-controlled systems or spending lots of money to acquire somebody else’s assets in a community," Pursing said. "In our case, as an academic institution and partner of the Medical College of Wisconsin, we should be helping strengthen community providers to meet the community’s needs."
That approach is in contrast with some other institutions, according to Pursing.
"Building is capital-intensive," Pursing said. "It costs a lot of money to build things. There is a frenzy
of that kind of activity happening here already. It doesn’t necessarily contribute to quality, and may add cost rather than reduce cost. We think partnership is a better way to do things."
Cleveland wrecks
the curve
Not included in SBT’s comparative analysis of Midwestern cities is Cleveland, Ohio (population 478,403), which is part of the 2.9-million-population Cleveland-Akron Metropolitan Statistical Area (MSA). Cleveland and Akron each have much higher beds-per-thousand ratios due to the fact that 10 million people live within a 150-mile radius, and that Cleveland is home to several large research hospitals.
However, the Milwaukee-Racine MSA still has more hospital beds per thousand than the Cleveland-Akron MSA. According to data kept by Managed Care On-Line (MCOL), which provides market research data to managed-care companies, even given the difference in overall MSA population, the Milwaukee/Racine MSA has more beds per thousand than Cleveland – 4.39 beds per thousand versus the Cleveland/Akron MSA’s 3.53 beds per thousand.
In addition to the size of the metropolitan area, Cleveland attracts a significant number of hospital patients from outside of the area – including more international patients.
Hospitals in the market declined to comment on the size of their international market, but data from secondary sources indicates it is significant and growing, according to Doctors’ Marketing Services (DMS) of Lake Forest, Calif. The single largest hospital entity in Cleveland – the 920-bed Cleveland Clinic Foundation – in 1994 brought in $70 million in revenue through international patients from 80 countries. In 1997, Cleveland Clinics attracted 5,000 foreign patients, compared with 3,000 five years earlier.
Apart from sheer revenue volume, international patients are attractive because they pay 100% of charges before leaving the hospital, whereas domestic private payer patients typically pay only a portion of charges under agreements negotiated by their health plans or insurance carriers.
In 2000, Cleveland Clinics ranked third in the nation for number of surgeries performed, delivering a 78% occupancy rate according to data released in October by SMG Marketing Group. That occupancy figure was only approached in the Milwaukee market by Children’s Hospital, according to BHI data.

January 18, 2002 Small Business Times, Milwaukee

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