Hancock Regional Hospital is the first to blink in a high-stakes game of health care chicken on the fast-growing northeast
Aggressive expansion plans by Indianapolis' three biggest hospital systems have pushed Greenfield-based Hancock Regional to change up its plans to build an outpost of physician offices in northwest Hancock County, near the borders of Marion and Hamilton counties.
But Hancock Regional isn't backing down. The county-owned hospital is retooling its project by shifting to a medical mall concept, which could offer a smorgasbord of medical services, ranging from obstetrics and urgent care to cosmetology and animal care.
Whatever Hancock Regional builds, the 10 acres it owns in northwest Hancock County offer a strategic location from which to draw patients from burgeoning Fishers, Fortville and McCordsville, as well as the wealthy neighborhoods around Geist Reservoir.
"It's just a part of the never-ending medical-arms-race chase for insured patients that the Indianapolis hospitals are going after," said Les Zwirn, an independent Indianapolis health care consultant.
But before Hancock Regional has a showdown over patients, it must win over physicians. After hiring a consulting firm to do market research, the hospital's officials decided their chances with doctors weren't as good as before.
That's because Hancock Regional's project site lies just five miles south of medical facilities open or envisioned by Community Health Network, St. Vincent Health and Clarian Health Partners.
Those hospital giants all own large tracts of land near Interstate 69 and Olio Road. St. Vincent and Clarian bought their parcels after Hancock Regional bought its plot near McCordsville in December 2005.
"Our assumption is that medical office space, there's going to be an abundance of it at the location [near I-69 and Olio]," said Rob Matt, vice president of business development and marketing at Hancock Regional. He added, "Physicians typically want to be close to a hospital."
It's only a matter of time before a full-fledged hospital opens at I-69.
Clarian said it would eventually develop a full medical center on the 95 acres it owns along I-69, across a street from St. Vincent's location. Clarian intends to develop the land in phases, starting with a simple fitness center and outpatient services and ramping up to a hospital and more medical offices.
St. Vincent plans to build an emergency room, an outpatient surgery center and medical offices, which could later morph into a full hospital. St. Vincent is scheduled to break ground on its 27-acre plot of land this summer.
Community has plenty of room to expand its large physician office building on Olio Road, where it owns 26 acres, but it has announced no plans for something more. Its largest hospital, Community North, is about nine miles away, at I-69 and 82nd Street.
It's obvious why so many hospitals are targeting the northeast side. Growth in McCordsville and Fortville has been fueling countywide growth of 3 percent each year this decade, according to Census Bureau data. In Fishers, the population has been surging more than 7 percent a year.
Dr. Patrick Rankin, a family physician at Community's medical pavilion on Olio Road, said his practice attracts patients from Hamilton, Hancock and Marion counties. But he said he primarily wanted to serve Fishers, so it made sense to have his office there.
"For us, the ideal location is where we're at. Our idea is to serve that northeast side of Fishers," Rankin said.
Community lured Rankin to Fishers from his previous practice near Lafayette. For the other hospitals to make their projects work, they'll have to do a similar job of wooing physicians, health care consultants said.
They might even need to get physicians to invest in their projects. But that proposition seems increasingly difficult, said Duane Sobecki, a health care consultant and principal of Focused Results.
"Physicians aren't as willing to invest as they used to be," Sobecki said, citing higher interest rates and increasing financial pressures on doctors' businesses. "They're as bad as bankers."
Clarian drew significant attention in 2004 and 2005 when it relied on substantial investments by doctors to open its for-profit hospitals in Avon and Carmel, respectively. Doctors contributed 20 percent of the investment for the hospital in Avon and 36 percent for the one in Carmel.
Hancock Regional decided to scuttle its medical office plan in May, said Matt, the hospital's vice president. Its new plan still would include physician offices, but it wouldn't emphasize them as much as before. Hancock's previous vision called for a 48,000-square-foot building dominated by doctors' offices and complemented with imaging and other ancillary medical services. Matt said Hancock had not finalized a cost for the original project, and doesn't yet have one for the revised version.
The hospital decided to make medical services the main focus after reviewing a market study prepared by Indianapolis-based Somerset CPAs, Matt said. A size for the new building has yet to be determined, he said, but he wants a final decision on the project's direction by Aug. 15.
"Instead of just being physician office space, you focus much more on imaging, rehab services, urgent care," Matt said. "It could be dermatology, space for OB doctors, pediatricians. It could extend to veterinary services, cosmetology, day care."
Whether that concept works on the site Hancock Regional has is another question, Sobecki said. The land is an open field about a mile outside of McCordsville proper.
"Are the services unique enough that it's going to make me want to go there?" Sobecki said. "Or are the doctors well-known enough to drive people there?"
To hold its turf on the northeast side, Hancock Regional needs the answers to be yes.