Working model

Last updated on May 13th, 2019 at 02:33 pm

More than one year after it opened, the Wisconsin Heart Hospital has already outlasted the only other specialty cardiac care hospital in the Milwaukee area and is making progress toward profitability. The Wisconsin Heart Hospital at 1000 W. Bluemound Road, Wauwatosa, opened in January 2004 and is 49 percent owned by Covenant Healthcare, 29 percent owned by cardiac and vascular physicians and 22 percent owned by investors from the general public.
The $44 million facility, which has 60 licensed beds and about 200 employees, is a for-profit operation that is "trending positively," but has not reached profitability, said hospital president Norma McCutcheon.
McCutcheon declined to say when she expects the hospital to become profitable.
"We are sitting at a point where we are stable," she said.
The national trend for cardiac care specialty hospitals is to reach profitability by the third or fifth years, McCutcheon said.
Another national trend for cardiac care specialty hospitals is that many predict robust patient numbers before opening, but then have to adjust their expectations after the hospital opens and patient numbers are short of projections, McCutcheon said.
For many new specialty cardiac care hospitals, including the Wisconsin Heart Hospital, the concept is new to the community, and patient numbers and revenues are difficult to predict before opening, McCutcheon said.
After being open for more than a year, the hospital has a better understanding of what to expect going forward, she said.
"We started with an empty slate," McCutcheon said. "Our current fiscal year, our projections are based on the experience of one year. That is the learning process that all of these specialty hospitals have had. The first year went according to what we thought would happen, based on national trends."
McCutcheon declined to disclose the hospital’s revenues or its patient numbers. The hospital expects to serve about 9 percent of the cardiac care market in the metropolitan Milwaukee area in about three years, she said.
The Heart Hospital of Milwaukee opened in October, 2003 at 375
W. River Woods Parkway, Glendale, and was owned by Charlotte, N.C.-based MedCath Corp. The hospital closed in November 2004, and the building was sold to Columbia St. Mary’s of Milwaukee.
The two heart hospitals had much in common. Like the Wisconsin Heart Hospital, the Heart Hospital of Milwaukee also was a small, cardiac care specialty hospital with an emergency room open 24 hours a day able to handle any patient, not just those with heart problems.
However, the Wisconsin Heart Hospital had two key advantages over
the Heart Hospital of Milwaukee, McCutcheon said.
First, Covenant Healthcare’s connection to the hospital provides a base of support in the local health care industry and a key referral source.
"That is a significant part of our puzzle," McCutcheon said.
The Heart Hospital of Milwaukee, owned by an out-of-state company, lacked that local connection.
"It’s a very competitive environment in Milwaukee," McCutcheon said. "Relationships are critical in Milwaukee. (Covenant is) a big one. It really helps to have those connections."
Secondly, the Wisconsin Heart Hospital was able to negotiate contracts early on with all of the managed care providers in the Milwaukee area. The Heart Hospital of Milwaukee struggled to reach contract agreements with the managed care plans in the metro area.
With the Heart Hospital of Milwaukee out of business, the Wisconsin Heart Hospital lost a competitor and is now the only cardiac care specialty hospital left in the Milwaukee area. For the Wisconsin Heart Hospital, the biggest benefit of the demise of the Heart Hospital of Milwaukee is that people no longer get the two mixed up, McCutcheon said.
"It’s decreased confusion in the market," she said. "That’s helped."
Some of the physicians who practiced at the Heart Hospital of Milwaukee have expressed interest in practicing at the Wisconsin Heart Hospital, McCutcheon said.
Covenant wanted to participate in the Wisconsin Heart Hospital venture to increase its presence in the cardiac care market, McCutcheon said. Covenant facilities are well known as places to receive top-notch prenatal care and cancer treatments, but are not as acclaimed for cardiac care, she said.
"Our business is an influx of business that Covenant hadn’t seen before," McCutcheon said. "They really wanted to take a bold step and re-establish their cardiac presence. That’s the reason behind this bold venture for them."
Another reason many of the investors supported the hospital is a desire to create a unique, patient-friendly environment, McCutcheon said. The Wisconsin Heart Hospital is designed to provide maximum comfort for patients, who are kept in one patient room during their entire stay, instead of being frequently shuffled from one room to the next.
The hospital strives to maintain a calm environment without nurses and physicians scurrying around frantically. The patients see the same nurses and physicians during their entire stay, forming a comfort level with them.
McCutcheon is so diligent about maintaining a serene atmosphere at the hospital that she does not allow any paging of employees near the patients.
"The model of care here is unique," she said. "The patients love it. They talk about sleeping at night. The single most important compliment we get every day is, ‘I can’t believe I stay in one room the entire time.’ People invested in this because they had a passion for patient care. It wasn’t just the money. They wanted to create this."

April 15, 2005, Small Business Times, Milwaukee, WI

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