Health Care and Education & Workforce Development

Hospitals battle for bone biz: St. Vincent's ortho upgrade ups ante in lucrative niche

February 20, 2006

St. Vincent Health is spending $9 million to capture more of the city's lucrative market for orthopedic care, a specialty that could trigger a new arms race among local hospitals.

The Catholic hospital network is reworking existing space at its 86th Street campus to create a 61-bed St. Vincent Orthopedic Center that will open in July. The new center aims to consolidate care in one location and raise the quality bar to new heights.

"We think we're creating something that will be the best in the Midwest for orthopedic care," said Dr. Jeff Pierson, a surgeon who will be the center's medical director.

Some doctors who practice a few traffic lights to the west might disagree.

OrthoIndy, central Indiana's largest orthopedic physician group, opened a standalone hospital last year near the intersection of West 86th Street and Interstate 465. The 37-bed Indiana Orthopaedic Hospital marks its first anniversary next month, but the looming St. Vincent project won't dampen their celebration.

"We think we've done a pretty good job of shoring up our market share," hospital CEO John Martin said.

However, the competition for that market share likely will intensify citywide, resulting in buildup similar to that seen in cardiology services in recent years. Experts see plenty of patients to treat and money to make by mending broken bones and torn knee ligaments.

All the main hospital networks in Indianapolis-a list that includes St. Vincent, Community Health Network, Clarian Health Partners, St. Francis Hospital and Health Centers, and Wishard Health Services-already provide some form of orthopedic care.

"It's highly likely that there'll be responses to this," said Ice Miller health care attorney Gregory Pemberton.

Health care consultants rank orthopedics and cardiology among the most profitable service lines for a hospital. In orthopedics, they see a wide range of patients, good reimbursement and solid growth.

Last year, St. Vincent performed 2,000 hip and knee replacements, the largest total in the state, according to Pierson. By 2020, hospital officials expect to double that total merely by maintaining their market share.

"It's probably the No. 1 service line that hospitals would seek to attract or provide to the marketplace," said Mike McCaslin, a principal in the health care team at the Indianapolis office of Somerset CPAs.

Orthopedic patients can include a high school football player who blows out a knee ligament, a weekend athlete, a 65-year-old hip replacement candidate and several demographic groups in between.

Aging baby boomers have helped drive up patient volume, and payers provide "reasonable reimbursement" for care compared with other specialties, Ice Miller's Pemberton said.

That potential was behind OrthoIndy's opening of the Indiana Orthopaedic Hospital last year. OrthoIndy's 62 doctors do the majority of their surgeries at the new hospital, but they cover emergency rooms and have operating rights at all the major Indianapolis hospitals, spokeswoman Dana Walker said.

That includes 42 OrthoIndy physicians with operating rights at St. Vincent. Those doctors will play a key role in the new St. Vincent center, according to Pierson, who noted that, with the birth of the Indiana Orthopaedic Hospital last year, St. Vincent couldn't afford to sit on its hands.

"We plan on doing something that's better than the competition but not mutually exclusive," he said.

Sharpening the focus

St. Vincent is gutting the old Family Life Center-which moved to the nearby St. Vincent Women's Hospital-to make room for what essentially will be an orthopedics hospital within a hospital.

The two-story center will feature doctors, administrators and nurses devoted solely to orthopedic care. But it also will stay connected to St. Vincent's main hospital and have access to other specialists or emergency care if needed, Pierson said.

In a couple of years, St. Vincent will add a medical office building to house the center's surgeons and some outpatient services.

"We're going to have a one-stop shopping experience for patients there," Pierson said.

The center will tighten its orthopedics focus a few more notches by providing separate spaces for subspecialties. In other words, the hip-and-knee replacement patients will stay in one part of the center. The same goes for those undergoing spine or hand surgery.

The idea is to create medical teams that maximize efficiency and experience by consistently working in the same area. These care givers also will maintain what Pierson calls a "high touch" in carrying out the St. Vincent motto of healing the mind, body and spirit.

Some orthopedic patients must visit several corners of the main hospital to prep for surgery, have the operation, recover and return to their rooms.

The new center will consolidate those trips. A former neonatal intensive care unit has been stripped bare and will be turned into 20 pre- and post-operative bays for orthopedic patients, with family waiting rooms just outside the door.

Orthopedic patients and their families will be able to enter and leave through only one St. Vincent entrance, noted Danny Moore, a manager of facilities and services.

A new look

Wires and construction lights dangle from the center's ceiling, and bits of plaster dot the cement floors as workers perform a face-lift on the 120,000 square feet of space they want to convert.

The purple and sea green color schemes of the Family Life Center walls will be replaced by more of a wood theme, with an emphasis on earth tones. The new look will make the center feel "more like you're at a hotel than a hospital," Pierson said.

He noted that many orthopedic patients seek treatment to improve their quality of life, and St. Vincent wants to improve the center's feeling of wellness as opposed to "the institutionalized feeling of sickness most hospitals have."

The orthopedic center also will provide several patient-friendly features, including an education center, wireless Internet access and all-private rooms.

While the center will add nine orthopedic beds to St. Vincent's current total of 52, hospital leaders consider it an improvement in care, not a bed-count expansion.

"This is not [the recently opened] Clarian North," Pierson said. "They don't have patients for those beds they built up there. They have to build that business.

"We already have the book of business; we're trying to improve the care for that business and grow [it], make no mistake about it."
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