The Heart of the Matter

Although world-class cardiac care is prolonging and saving lives throughout southeastern Wisconsin, it also is contributing to a "medical arms race" that is driving up the costs of health care in the region.
More than 200,000 heart-related procedures were performed at Milwaukee-area hospitals in 2003.
Heart disease and stroke are the leading causes of death in the state and nation. In 2001, cardiovascular disease caused 38%, or 17,759, of the deaths in Wisconsin, according to the state Department of Health and Family Services.
About a dozen hospitals provide cardiac care in the Milwaukee area – more than double the amount as recently as the mid-1990s.
That proliferation has contributed to the emergence of a variety of cutting-edge options for equipment and surgical procedures in the region (see accompanying stories).
However, the proliferation also is creating a compendium of duplication, as cardiac care facilities are over-saturating the market and further driving up the costs for health care in southeastern Wisconsin.
Cardiac care is one of the biggest sources of revenue for health care providers.
"The cardiac unit provides a significant and important revenue stream to them," said Richard Blomquist, president of Blomquist Benefits LLC, a health benefits consulting firm.
"Cardiac care is a profitable area for us to be in," said David Potts, vice president of St. Luke’s Medical Center, Milwaukee. "I don’t know that I’d say it’s the most profitable."
The profitability of cardiac care is part of the reason so many hospitals in the Milwaukee area offer cardiac care and why two for-profit cardiac care specialty hospitals opened in the last seven months.
In late January, The Wisconsin Heart Hospital opened at 10000 W. Blue Mound Rd., Wauwatosa. Milwaukee-based Covenant Healthcare System and private investors own the 60-bed, $44 million hospital.
The Heart Hospital of Milwaukee opened at last October at 375 W. River Woods Parkway in Glendale. The 32-bed, $35 million hospital is owned by Charlotte, N.C.-based MedCath Corp.
"If you want to know what’s profitable, look at what is opening," said Leo Brideau, president and chief executive officer of Columbia St. Mary’s Hospital in Milwaukee. "It’s the heart hospitals. Nobody opened up for-profit burn hospitals, because there’s not a profit to be made."
The addition of two heart care specialty hospitals created a stir in the Milwaukee health care market. Some critics said the new heart hospitals will primarily serve high-profit cardiac patients and leave other less profitable patients to other hospitals.
Officials from the two specialty heart hospitals have denied that assertion and point out they both have emergency rooms that treat all patients, not just those with heart problems.
"We are seeing patients coming from various areas of the Milwaukee-area market," said Wisconsin Heart Hospital president Norma McCutcheon. "I think it is definitely a hospital that is being supported by the public and physicians."
McCutcheon said the Wisconsin Heart Hospital’s mission is to provide a higher quality of care, getting patients home faster at a lower cost.
The increased number of hospitals providing cardiac care in the Milwaukee area has led to increased quality of care, Blomquist acknowledged. However, he said it has also contributed to the Milwaukee area’s high health care costs.
With more hospitals splitting up the cardiac care pie, hospitals that lose part of that profitable market share raise prices to compensate for it, Blomquist said.
"Traditionally (cardiac care) has been one of the more profitable areas," said Brideau. "It’s becoming less profitable."
Personnel costs for cardiac care physicians and nurses are driven up because several hospitals are competing for a limited supply of qualified personnel, Blomquist said.
Rising labor costs are a bigger factor in the rising costs of health care than new hospital construction, he said.
"The biggest problem in Milwaukee is that there are more heart services than needed for the demand of the city," said Dr. Robert Roth, a cardiologist at Columbia St. Mary’s. "We have twice as much than necessary, and many programs are conducting a low volume of procedures because of it. It is diluting the pool of employable people (for cardiac care), and heart centers need a whole separate pool of skilled tech personnel."
The federal government used to require all hospital building projects to receive a certificate of need to demonstrate that new or expanded hospitals were necessary. In 1984, the federal government made a change to the Medicare reimbursement program and stopped the certificate of need program.
About half the states maintained their own certificate of need program, but Wisconsin did not.
The lack of a certificate of need program has contributed to the increase in the number of hospitals providing heart care in Milwaukee, Blomquist said.
Another factor is that many area businesses, facing a tight labor market in the late 1990s, asked their insurance carriers to provide their employees access to most area health care providers. As a result, many area hospitals, in an intense battle to attract those patients, are now providing numerous forms of health care, including cardiac care, rather than just specializing in a few areas.
The competition for customers has encouraged hospitals to improve their facilities, add more medical services such as cardiac care and hire the best employees
April 30, 2004 Small Business Times, Milwaukee