Two rival health systems are raising concerns about an expansion plan by Regions Hospital in St. Paul that would add 100 beds over the next 30 years.
In a letter this month to state regulators, Minneapolis-based Fairview Health Services said the expansion could jeopardize the financial viability of other hospitals in the east metro including St. Joseph’s Hospital, which Fairview operates roughly 1 mile away from Regions.
Minneapolis-based Allina Health, which operates nearby United Hospital, questioned whether the long-term nature of Regions’ request makes sense considering the rapid pace of change in health care.
But Megan Remark, president and CEO at Regions, defended her hospital’s proposal, saying in an interview that Regions is simply seeking the flexibility that St. Joseph’s and United already have to expand services as the population gets older.
“The feedback from a few of our competing health systems doesn’t change our interest in continuing to pursue the 100 beds,” Remark said. “The feedback that we’re receiving overall is very positive.”
The comments from Fairview and Allina were submitted in writing this month to the Minnesota Department of Health, which is conducting a review of the Regions proposal to determine whether it’s in the public interest. Minnesota has a moratorium on the construction of new beds unless an exception is granted by the Legislature.
Bills that would allow the Regions expansion have been approved by health care committees in both the House and Senate and are awaiting votes by the full chambers.
While the vast majority of public comments filed thus far have been supportive of the proposal, the first outright opposition came last month from sisters with the religious order that created St. Joseph’s Hospital. Neither Fairview nor Allina signaled outright opposition in their letters, but they described concerns with the proposal from Regions, which is part of the Bloomington-based HealthPartners system of health insurance, hospitals and clinics.
The Regions proposal would increase by more than 20 percent the current bed and employee counts at the hospital. Regions is unique among hospitals in the east metro in utilizing the vast majority of its licensed beds, officials said, while other hospitals have a large number of “banked beds” that they can put into service if needed.
In an April 2 letter to the Health Department, Laura Reed, chief nurse executive and president of hospitals for Fairview, said St. Joseph’s and other east metro hospitals could be hurt if the expansion lets HealthPartners steer more patients to Regions.
United Hospital President Tom O’Connor wrote in an April 2 letter that Allina’s projections show that an increased need for inpatient beds in the east metro will be offset by other expected changes in technology and care models.
Remark said the expansion is not designed to let HealthPartners steer patients to Regions, because most of the insurer’s products give patients a choice of hospitals. Currently, only about 13 percent of all patients treated at Regions have commercial coverage via HealthPartners, she said.
As for technology and care model changes that let patients stay out of hospitals, Remark said she agrees and believes Regions has been at the forefront of such changes.
Even so, she said: “Technology works both ways in terms of allowing us to help patients with more serious illnesses. And as we are all living longer, there are more issues that can be addressed … in an inpatient setting.”
Health Department officials plan to provide a preliminary report by the end of April.