Wednesday, March 21, 2001

Mercy closure extends trend to consolidate

By Tim Bonfield
The Cincinnati Enquirer

        While the timing may come as a shock to patients, employees and supporters, the closing of Mercy Hospital Hamilton comes as no surprise to Greater Cincinnati's health-care industry.

        “This is part of a trend that has been going on all through the '90s,” said Jonathan Lippincott, executive vice president and chief strategic officer at the Health Alliance of Greater Cincinnati. “The business community for a long time wanted us to consolidate the industry. We have come a long way. In fact, I don't think we can go much farther.”

[photo] Mercy Hospital Hamilton will become the Tristate's third hospital to close in four years.
(Dick Swaim photo)
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        When Mercy Hamilton closes in June, it will be the Tristate's third hospital closing in four years, following Jewish Hospital in 1997 and Bethesda Oak Hospital in early 2000.

        Like nearly every other hospital closing, it will be painful. Mercy Hamilton, founded in 1892, was the first of Mercy Health Partners' six area hospitals. It is one of Hamilton's oldest institutions and among its biggest employers.

        But signs that Mercy Hamilton could be or should be closed have been building for years.

        The opening of Mercy Fairfield in 1979 marked the beginning of the end.

        For many years, Mercy ran the two hospitals under a single board of trustees while pumping money into expanded services at Fairfield, including new medical office buildings, diagnostic equipment and a birthing center.

        Mercy Hamilton got some renovations, but its focus increasingly shifted to rehabilitation and hospice services. Its emergency department and inpatient services were kept open more as part of a charitable mission than part of a business plan.

        That mission has never been given proper credit, said Dr. Brad Woodall, a radiologist with the Mercy hospitals who also serves as president of the Butler County Medical Society.

        “The Mercy Hospital in Hamilton has been a quiet, unsung hero for the entire community of Hamilton for many years,” Dr. Woodall said.

        While much of the hospital consolidation controversy over the years has focused on Cincinnati's Pill Hill, many analysts said all along that the city of Hamilton did not need and could not support two full-service hospitals.

        Yet instead of closing, Mercy Hamilton just got smaller. Licensed to run more than 160 beds, it actually had about 130 beds in 1998 and didn't keep those full. Now it has 108 beds.

        The closing “is not a shock to anyone,” said Stu Scheller, a partner in the Scheller-Bradford Group, a health care consulting company. “This may be just the beginning of more assertive actions at Mercy Health Partners to shore up their bottom line.”

        Tuesday's announcement comes amid rough times for Mercy Health Partners. Last year, the system announced an operating loss of more than $10 million that led to cutting 99 jobs. Last month, Mercy's chief executive, Julie Hanser, retired.

        However, as recently as a year ago Mercy officials denied that the Hamilton hospital was at any risk of closing. In fact, speculation about the possibility drew a sharply worded response from Ms. Hanser, printed as a guest column in The Cincinnati Enquirer on Jan. 4, 2000.

        “Regardless of what any unnamed experts say, we are operating a health care system that is fiscally sound with hospitals that have a solid base of revenue and volume,” Ms. Hanser wrote. “In Hamilton and on the west side of Cincinnati, we will maintain our hospitals as an integral part of those neighborhoods.”

        Mr. Lippincott of the Health Alliance said Fort Hamilton Hospital expects to absorb many of the patients who used Mercy Hamilton.

        Fort Hamilton hospital, founded in 1929 as Fort Hamilton-Hughes Memorial Hospital, joined the Health Alliance in 1998.

        Lynn Olman, president of the Greater Cincinnati Hospital Council, said the closing announcement reflects the transformation of the hospital industry from mostly inpatient care to mostly outpatient care.

        Even hospitals that haven't closed have cut capacity. From 1984 to 1999 the number of hospital beds in Greater Cincinnati shrank more than 46 percent, from 7,414 to 3,971, — even though the population served by those hospitals grew 11 percent.

        “I've said for years and years that we have excess capacity in some places and not enough in others,” Mrs. Olman said.

        “It's a distribution issue. And I still think there are some distribution issues that haven't been resolved.”

        With one hospital still running in Hamilton, most sources said they do not expect patients to suffer any serious loss of access to health care.

        However, Dr. Woodall said he is not convinced that Fort Hamilton will be able to pick up as much of the indigent care than Mercy Hamilton has provided.

        “Mercy Hamilton sees 23,000 patients a year in its ER. Many of them are indigent,” Dr. Woodall said. “Fort Hamilton will have a hard time meeting the demands if all the patients go there. They'll have to change things really quick.”

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