Photo courtesy of Virginia Children's Hospital Alliance
Bon Secours Virginia CEO Peter Bernard, Virginia Children’s Hospital Alliance CEO Katherine Busser and VCU and VCU Health System President Michael Rao are working together for a new children’s hospital.
This may be a make-or-break year for Richmond’s long-discussed freestanding children’s hospital. Despite past setbacks, there is reason for optimism for the region’s families.
Toward the end of last year, the Virginia Commonwealth University Health System and Bon Secours Virginia Health System signed an agreement to negotiate with the goal of jointly opening and operating a facility. Tasked with mediating that process is Katherine Busser, a retired Capital One CEO tapped to lead the Virginia Children’s Hospital Alliance. The best-case scenario, Busser says, is that the collaboration could result in a fully operational hospital before the end of the decade.
“I really believe we can do projects like this in this region,” Busser says. “The fact that we haven’t gotten there before doesn’t mean we won’t get there this time.”
Whether we get there should be evident by year’s end. Negotiations between the two health systems and the alliance must come to a head by December, when the alliance aims to file a certificate of need for a hospital with the state Department of Health. The agency accepts applications only twice a year. Before filing, Busser says, the alliance must settle on a site to build and purchase the property.
Last August, the alliance received 20 site proposals from the city of Richmond and Henrico, Chesterfield and Goochland counties. Busser and company are busy whittling down the stack. The alliance’s top priorities for choosing the site are access and room for growth, Busser says, but there’s also groundwork to be laid dealing with the flow of federal research dollars, which system will be responsible for which services, and the academic aspect of the project. “We want it to be in a location where the majority of families and children in the commonwealth can reach it,” Busser says.
The site will also dictate the project cost, much of which the alliance will have to generate. Maureen Denlea, one of the region’s most accomplished fundraisers, has been hired to lead this effort. Contributions totaling between $8 million and $10 million will fund the planning process through the end of 2015, Busser says. All told, the alliance may need upwards of $400 million to build, staff and initially run the facility.
An early- to mid-year launch of a statewide capital campaign will keep Denlea busy. The alliance aims to raise between $100 million and $150 million, and Denlea says she’s up to the challenge: “It’s the next best thing Richmond should have.”
The campaign funds will supplement an estimated $150 million gift from the Goodwin family. The philanthropists pledged support to the project a few years ago, but threatened to withdraw it if the health systems did not come to terms.
Specifically, Bill Goodwin criticized VCU’s apparent lack of concessions during the negotiating process. Meanwhile, VCU has moved forward with construction of a nearly $170 million pediatric facility downtown. The Children’s Pavilion, which is scheduled to open in 2016, will consolidate services for pediatric patients VCU already serves, says John Duval, the health system’s CEO.
“We can’t know when, or if, the freestanding children’s hospital will come to be,” Duval says. “So we can say that we are advancing children’s care today, not waiting until some unknown date.”
Duval says that investing in the facility is not in conflict with ongoing negotiations with the alliance. Shortly after the interview in December, the health system also broke ground on a children’s psychiatric facility that will cost $56 million to complete.
Charlotte Perkins, a spokeswoman for Bon Secours, says VCU’s expansion of pediatric services does not hurt negotiations, because the projects were in the works prior to the two health systems coming to the table. The region’s third major health system, HCA Virginia, is not a part of the alliance’s negotiations moving forward.
“While we would prefer that all three major health systems be a part of the children’s hospital — as it has been shown that when all services are provided in one clinical setting, quality outcomes improve — we believe that with the correct economic model, the Children’s Hospital can become a reality without HCA,” Perkins says. HCA officials did not offer comment as of press time.
Keith Derco, a longtime local pediatrician and vice-chairman of the Pediatricians Associated to Care for Kids (PACKids) board, is an advocate of the project. The organization, which is made up of local pediatricians, has lobbied the health systems for several years on behalf of families and pediatric patients. Even without HCA, Derco is encouraged that the alliance is making progress. All the region’s families will benefit from their cooperation, he says. With services in one location, run-around will be reduced (patients are often referred to different providers depending on what their diagnosis is), and keeping track of medical records will be easier. “We want to decrease the fragmentation [of pediatric services], because VCU builds up theirs and Bon Secours builds up theirs and now HCA is building up theirs,” Derco says. “Each system, un-tethered, is going to do what’s best for that system, and patients get caught in the midst of that.”