A new, freestanding children’s hospital in the Richmond area is financially feasible and would be supported by the market, according to a study presented this week to local health care providers.
The report by management consulting firm Kurt Salmon envisions a $500 million, 200-bed hospital. It would be an independent nonprofit governed by a 15-member board of directors.
The report provides backing for a group of pediatricians and other health professionals in the area who have sought community support for a full-service hospital strictly for pediatric care.
“Our next step is to bring this to the community and to those that wish to participate,” said Dr. Ted Abernathy, a local pediatrician and chairman of Pediatricians Associated to Care for Kids, or PACKids, a nonprofit formed to advance the idea.
According to the study, about $150 million in philanthropic support would be needed to develop the hospital; debt would finance the rest.
Operating in a service area encompassing nearly one million children in Virginia, the hospital would generate $370 million in revenue by 2022, according to the study.
The study, which Abernathy said made conservative assumptions, concludes that the hospital would generate net margins of nearly 7 percent even without Medicare Disproportional Share Hospital funding to treat indigent patients. “That is the question that everybody has been asking us,” he said. “We won’t know that until we really determine who is going to participate in this hospital with us, what we need and where we will get those services.”
PACKids has been advocating a pediatric hospital that would be larger and provide more comprehensive care than Children’s Hospital of Richmond at VCU, which provides specialized services and became part of the VCU Health System in July 2010.
Abernathy said the region already has excellent pediatric services. “We just want to bring them together in a place to provide coordinated care, which in itself will improve care for all,” he said.
The report also recommends that the hospital operate as an independent nonprofit and not as a subsidiary of any existing stakeholder.
One local health care provider this week signaled its support by donating $25,000 to PACKids.
Medarva Healthcare, formerly the Richmond Eye and Ear Healthcare Alliance, made the donation, which Abernathy said would be used for further research and marketing efforts.
“We felt that Medarva should help do whatever it could do to get the message out and further the discussion on the need for an independent children’s hospital,” said Bruce Kupper, president and chief executive officer of Medarva, which operates Stony Point Surgery Center.
New children’s hospital is feasible, study says (Richmond Times-Dispatch, May 10, 2012)
