Second of two parts
It’s called “cream-skimming” and it’s alive and well in north county.
The “cream” is the bumper crop of well-off, fully insured retirees who call north county home.
The “skimming” is how the high-end medical practices and hospitals drawn to the area are grabbing their piece of the lucrative pie.
The result is a potential tipping point in medical care, pressuring traditional hospitals to fend off competition for physicians, nurses and, most of all, patients.
The pieces are not in place yet but there’s a scramble for available land, physician groups and care centers that will shape north county’s medical delivery system for decades.
A planned 300-bed Universal Health Services hospital in Alton may be the largest but it is far from the only proposal for more medical beds in north county.
Two major players in the medical-care game, Baptist Health and Acadia Healthcare, have pitched hospitals at a project dubbed Santé Circle northeast of Indiantown Road and Interstate 95 in Jupiter.
Plans for an 80-bed Encompass Health rehab hospital outside of Ballenisles on PGA Boulevard are undergoing city review — and drawing opposition.
And Jupiter Medical Center, which opened a $45 million cancer treatment center in March 2020, continues its growth by rebuilding and nearly doubling its operating theater.
But that’s not all.
Tampa General Hospital has partnered with three physician practices in Palm Beach County and promises to add more, all geared to moving the most difficult to treat — and often most lucrative — patients to Tampa.
Cleveland Clinic offers outpatient clinics in Palm Beach Gardens, West Palm Beach and Wellington. The Hospital for Special Surgery of New York opened a 55,000-square-foot building in partnership with Tenet Healthcare next to Tenet’s Good Samaritan Medical Center in West Palm Beach. NYU Langone Health has locations in West Palm and Delray Beach.
Two University of Miami Health centers are on PGA Boulevard and a third just opened in downtown West Palm Beach.
Legent Health, of Irving, Texas, is building a 24-bed hospital called the South Florida Spine & Orthopedic Institute and a medical office building on 11 acres west of Florida’s Turnpike off on Atlantic Avenue.
Baptist Health, which operates three hospitals with 880 beds in south county, is seeking Jupiter approval to build a 40-bed hospital and 93,000-square-foot medical office building at Island Way and Indiantown Road at a 58-acre development called Santé Circle. (Santé means health in French.)
In the same development, Acadia Healthcare, which operates 230 behavioral healthcare facilities in 40 states, wants to build a 144-bed hospital to treat psychiatric and chemical dependency disorders.
And UHS is trying to win over neighbors in the upscale Alton community for a full-service 300-bed hospital, which would compete with 199-bed Palm Beach Gardens Medical Center and 248-bed Jupiter Medical Center.
Part 1: Tampa General CEO slams Alton hospital proposal
No one will say who’s behind website attacking Alton hospital plan
‘Survival of the fittest’
The growth stems from a vastly changed health-care model and the state’s elimination of a longtime growth control — the requirement that new hospitals prove need.
Taking advantage of demand for specialty surgeries that require little or no inpatient recovery time, smaller specialty hospitals are cropping up nationwide. A 24-bed facility like Legent’s can perform surgeries and keep patients overnight if needed but most will go home the same day.
Outpatient surgery is where the money is.
That puts pressure on full-service hospitals vying for the same doctors and patients but unable to keep beds full to cover operational costs in an era of shorter hospital stays.
But those traditional hospitals no longer can rely on the state to control the marketplace. New hospitals no longer need to go before a state agency and a judge to prove that they wouldn’t unnecessarily duplicate services and cause prices to rise.
The Florida Legislature scrapped its “certificate of need” requirement for hospitals in 2019 under the concept that limiting the market actually resulted in higher prices by creating competition-safe zones monopolized by traditional hospitals.
Lifting the rule aims to inspire higher quality care and lower prices. But with each new facility seeking state-of-the-art equipment to outshine its rivals, pressure rises on full-service hospitals to continue generating enough money to pay their bills.
“The underlying concept is survival of the fittest,” said Dr. Steven Ullmann, director of the Center for Health Management and Policy at the University of Miami. “So there’s an incentive to provide high quality care if you’re going to compete with other hospital systems.”
The downside, however, is duplication of services. And more competition for doctors and nurses.
Medical-industry insiders have a nickname for the surgical centers surge: “cream skimming,” Ullman said.
While traditional hospitals cover the massive expenses of providing a broad range of care to meet any challenge, the newcomers specialize, eliminating the need to have something for everyone.
“It’s perceived as unfair,” Ullmann said.
Legent’s entry into south county threatens to strip out spine and orthopedic surgeons from nearby full-service hospitals, while drawing patients who can fully pay — leaving the hospitals with those less likely to pay.
Likewise, building a 40-bed hospital in Jupiter puts Baptist Health in the center of a desirable market but with little of the operational costs of a full-service hospital.
They can go after surgeons and make a dent in the outpatient surgery market owned now by Jupiter and Palm Beach Gardens medical centers but without the trappings of a 200-bed facility.
Baptist Health South Florida, which took over Boynton Beach-based Bethesda Health in 2017, owns 11 South Florida hospitals, including three in Palm Beach County — Bethesda Hospital East and West and Boca Raton Regional Hospital.
The move to Jupiter would be their first north of the Boynton Beach area.
Alton hospital’s gamble on growth
Tampa General, Cleveland Clinic and NYU Langone can establish a beachhead in South Florida and refer high-risk patients back to the home facility for elite care.
UHS’s Alton plan for 300 beds is a bigger gamble on growth in north county to support a full-fledged hospital. The company, which operates about 400 acute care hospitals, behavioral health facilities and outpatient facilities in the United States and United Kingdom, put up $32 million for land and can expect to pay more than $200 million to build and outfit a scaled-back, 150-bed hospital and more than $300 million for full-buildout to 300 beds.
While UHS doesn’t face state review, it must find three votes for its plans on a five-member Palm Beach Gardens City Council that is hearing from neighbors and other residents about overcompetition and fears that a hospital with its 24-hour operations, helipad and ambulances doesn’t fit the polished image of Alton’s 2,700-home community.
Spurred by a website attacking the UHS proposal, about two dozen residents wrote to Palm Beach Gardens City Council members in late January urging opposition to the hospital, public records reveal.
“This area of Palm Beach Gardens is something that we (me, my wife and friends) often refer to as The Diamond,” wrote Chris Zabaleta, a Gardens resident who lives about two miles from Alton. “It’s not plagued with traffic and congestion like other areas of Palm Beach County. Building this hospital will absolutely change that.”
“If someone wants to build an unnecessary Mega Medical Hospital and complex, they should do it where it does not affect the local residents who have lived and paid taxes in this city for many many years,” wrote Melissa Holmes, who works in the medical field and noted that the two existing north county hospitals typically have plenty of available beds.
Here is a brief look at the emerging proposals in north county:
Aside from 11 hospitals, Baptist Health has more than 100 physician practices and outpatient facilities from Palm Beach to Monroe counties.
Its proposal calling for a three-story, 40-bed hospital and medical office building along Indiantown Road employing 100 staff doctors would be built over several years in three phases, its zoning application says.
The first phase would be limited to 10 hospital beds, two operating rooms and 20 emergency rooms. Phase two, the medical office building, would come four years later and the remaining 30 hospital beds would be on hold until phase three.
Jupiter Medical Center
While Baptist is undergoing town review, Jupiter Medical Center, the county’s lone independent hospital, already has begun construction on its latest overhaul, adding eight new operating rooms and renovating all but one of the existing 10. It’s also expanding its emergency room by 2,500 square feet, providing eight new treatment areas to bring the total to 37.
The behavioral health giant has six Florida facilities, including one in Boca Raton. It would build a two-story hospital on 8.3 acres in Santé Circle, with 120 beds in phase one and 24 opening later.
The proposal would take advantage of a dearth of mental-health treatment facilities in north county, particularly since the closure of the Jerome Golden Center for Behavioral Health on 45th Street, a nonprofit treatment center of last resort. Sunview Medical of New Jersey bought the property with plans to open a for-profit treatment center.
Traditional hospitals providing mental health treatment in north county include HCA Florida JFK North Hospital and St. Mary’s Medical Center, both on 45th Street.
The specialty hospital has emerged as a major player in South Florida over the past 10 years, with locations in Broward, Palm Beach and Indian River counties. In Palm Beach, patients can see Cleveland Clinic doctors at outpatient clinics on Donald Ross Road in Palm Beach Gardens, downtown West Palm Beach and Wellington. The clinic also paid $4.6 million in January 2019 for about 32 acres at Lake Worth and Lyons roads. After the purchase, a proposal to build a 350,000-square-foot medical office complex there was abandoned and the land remains vacant.
University of Miami Health System
Perhaps the out-of-town specialist with the deepest ties to Palm Beach Gardens, UM’s Bascom Palmer Eye Institute began treating patients off PGA Boulevard in 1996 and opened a 7-acre campus in 2006, now encompassing three buildings. The university’s Health System also runs multispeciality clinics on PGA Boulevard and in downtown West Palm Beach and Boca Raton and offers a concierge service in Palm Beach.
Tampa General Hospital
Under the leadership of former Jupiter Medical Center CEO John Couris, the 1,200-bed Tampa General has been marketing its services in Palm Beach County, running billboards on Interstate 95 and even manning a booth at February’s Artigras.
Tampa General has partnered with three physician practices, Gastro Group of the Palm Beaches, with offices in West Palm and Palm Beach Gardens; the Cancer Center of South Florida, with offices in Palm Beach Gardens and Palm Springs; and, most recently, formed the General Surgeons of the Palm Beaches group in West Palm Beach.
The investments position Tampa General to treat “the rare and complex cases” traditional hospitals can’t. But it has no interest in building a north county hospital, Couris said. They don’t need to.
“We are the state of Florida’s hospital,” Couris said in a marketing magazine put out by Tampa General. “We want to complement whatever exists in the community. … We don’t want to compete with them — we want the rare and complex cases sent to TGH, so people don’t have to leave the state.”
Already, the hospital transfers 15 to 20 patients a month from Palm Beach and Martin counties to Tampa, Couris said.
“If you need heart surgery, you want to go to a place that does a lot of it, not a handful a year,” he said. “You want a surgeon who practices and does this every day. That’s how they become world class.”
The Birmingham, Alabama-based company with $4.7 billion in annual revenue, has inpatient rehabilitation hospitals, home health agencies and hospice agencies in 42 states. Its website says it treats about one in three U.S. patients receiving inpatient rehabilitative care.
It proposes an 80-bed rehab hospital, with 50 beds in phase one, on 7.3 acres on the western side of the PGA Boulevard entrance to Ballenisles to treat patients recovering from strokes, hip fractures and other conditions.
The location, and a second site on the east side of the entry road, has drawn powerful opposition over the past 15 years from Ballenisles residents worried about traffic on their entry road, leaving the properties vacant despite repeated efforts to develop it.
While city planners review the proposal, council members already are hearing from residents opposed to Encompass’ plans.
The proposals all point to north county as the next big expansion area for South Florida health care. With its relentless growth in well-heeled, retirement-age residents, health-care providers are compelled to cash in.
“The old question is, ‘Why did Dillinger rob banks?’ Ullmann said. “Well, that’s where the money is.”
© 2022 Joel Engelhardt. All rights reserved.
Part 1: UHS shrinks its proposed Alton hospital to 300 beds but Tampa General CEO says full-service hospital is not needed.
2 thoughts on “Pivot point: Vast change in store for north county medical care”