CHRISTUS Santa Rosa Health System and San Antonio's public hospital have formed a partnership to build a new children's hospital and regional network of pediatric services, in part to attract a wider range of medical specialists.
The new hospital would be free-standing and replace the 51-year-old CHRISTUS Santa Rosa Children's Hospital, in downtown San Antonio adjoining one of CHRISTUS Santa Rosa's four other area hospitals. The partner is University Health System, the public hospital system for Bexar County, which operates a pediatric burn unit in its 498-bed medical center six miles from CHRISTUS Santa Rosa Children's.
CHRISTUS Santa Rosa and University Health will jointly own and operate the new hospital, estimated to cost $400 million to $450 million to build. The intent is to begin construction next year and open in 2015.
Shared investment
Patrick B. Carrier, president and chief executive of CHRISTUS Santa Rosa, said the partnership is necessary to finance the project. More importantly, he said, it will provide a greater and more efficient range of care for children in San Antonio, a fast-growing community in south Texas and the nation's seventh-largest city.
"Frankly, we don't have the money to do this ourselves," Carrier said. "We want to create a network of children's services throughout San Antonio, anchored by a free-standing academic hospital that will be a magnet to draw subspecialties that we don't presently have. It will be a children's network of truly comprehensive, complete care."
Christann Vasquez, chief operating officer of University Health, said the goal is "collaboration that can raise our fragmented system to a higher level, in the interest of pediatric patients." Vasquez said the county health system couldn't afford to build a new hospital by itself, either.
The plan is for a hospital of about 230 beds. Carrier said CHRISTUS Santa Rosa Children's is licensed for 220, but has an average census of 140 patients. Carrier and Vasquez said the joint agreement also would create a network of clinics and outpatient services, probably using some of the multiple locations that both systems now operate in San Antonio.
Recruiting magnet
CHRISTUS Santa Rosa Children's offers advanced care, including cardiac and transplant services. But patients needing certain specialties, such as some forms of neural or cardiac care, have to go to hospitals in Houston and Austin.
Carrier said a new hospital could attract specialists for those services with an improved layout that a 1959-vintage building simply can't offer. He said it would have a larger emergency department and more, up-to-date space for oncology, cardiology and research.
The new hospital would affiliate with the University of Texas at San Antonio medical school, continuing relationships that both partner systems already have with the school. Carrier said the medical school now performs 85 percent of its pediatric training at CHRISTUS Santa Rosa Children's.
Multiple owners, one mission
CHRISTUS Santa Rosa and University Health executives signed the letter of intent in late December during a ceremony at the Bexar County Courthouse in downtown San Antonio.
Shares of ownership are to be determined by the total investments of each partner, including cash and the value of hospital assets and services contributed. Carrier said the new nonprofit entity probably would be close to a 50-50 arrangement, but the deal allows for a larger investor to have a majority interest and membership on the new entity's board of directors.
The organizations also will seek donations from community residents, businesses and charities.
Carrier said the partnership with a public hospital will not endanger CHRISTUS Santa Rosa's Catholic mission. He said Bexar County officials endorse the CHRISTUS mission and are willing to abide by it.
"We're the only two nonprofit providers in the San Antonio area, and University Health has a long history of providing care for the underserved, which matches our own mission," Carrier said. The new pediatric hospital will follow the Ethical and Religious Directives for Catholic Health Care Services.
Preparing for reform, growth
Vasquez, of University Health, called CHRISTUS Santa Rosa "the perfect partner. The CHRISTUS mission and values, and nonprofit status, are all important to us. (CHRISTUS) has been serving San Antonio and Bexar County for a long time with high-quality care."
Carrier said a jointly run children's hospital would position the San Antonio area well as the federal government changes health delivery under the 2010 reform act. About 80 percent of CHRISTUS Santa Rosa Children's patients are eligible for Medicaid.
"It's part of our reasoning in making a partnership," he said. "We can envision the government creating pediatric accountable care organizations. Consolidation of services, rather than duplication, would be part of that."
But he said the main reason for the new agreement is the projection that San Antonio's pediatric population will continue growing. Forecasters predict 30 percent growth within 20 years. "We want to better serve a rapidly rising pediatric population with high incidence of challenges, especially diabetes and cardiac disease," he said.
The agreement allows for other partners to join. Methodist Healthcare System of San Antonio, a partner of Hospital Corp. of America, opened a children's hospital in 1998. But that hospital is a for-profit entity, a factor that may diminish prospects for partnership, Carrier said.
In 1991, Methodist and CHRISTUS Santa Rosa were part of an effort to build a new children's hospital in San Antonio. But that arrangement stalled when the parties and local government leaders couldn't agree upon a site. The battle was over keeping it downtown or moving to the northwest suburbs.
The new deal does not include a site, leaving that for later. Vasquez called it "a touchy issue still," but believed it will be resolved, noting that top city and county officials already enthusiastically endorse the partnership. Carrier said he was "confident that we will be successful in selecting a site. We and the elected leadership agree that we have to pick the right location."
Integrated system
The discussion for a new children's hospital was renewed in earnest in 2009, after Dr. Thomas Mayes, chairman of pediatrics at the University of Texas Health Science Center San Antonio, warned that some highly sought subspecialists were leaving San Antonio because of its fragmented system of pediatric care.
The new hospital would be the centerpiece of a network of pediatric care. Carrier said the new entity will work with area pediatricians in private practice to develop the particulars of the network's operations. He said the plan calls for outpatient and clinical services at multiple locations, all connected to the new hospital.
"Because 90 percent of what we do is outpatient, we want to create multiple access points," Carrier said.
With each partner already operating several hospitals and clinics, he said, the network would include new sites and modifications at existing centers. For example, CHRISTUS Santa Rosa's other hospitals could have inpatient pediatric centers of five or six beds for patients with lesser medical issues.