Dr. Ted Abernathy, a pediatrician and founding member of PACKids, says that having a single integrated system would benefit children. Photo by Isaac Harrell
The premise that Richmond sorely needs a dedicated, comprehensive, critical-care children's hospital meets with little objection from any of the three major hospital groups that have participated in talks about the idea during the past year. But as the group of pediatric care providers organized around the cause pledges to press forward with creating such a hospital, the jury is still out on whether these conversations will result in the sort of local collaboration envisioned by the group, called PACKids, for Pediatricians Associated to Care for Kids. Though initially supportive of a freestanding hospital, VCU Medical Center and, more recently, HCA Virginia Health System indicate they will not sign on to the current proposal, which would mean ceding many of their pediatric services to an independently governed facility. Despite those developments, the group of physicians leading the talks is determined to make its case to the public.
"It's important to explain what we want and how that's different than what we have right now," says Jennifer Scott, a PACKids spokeswoman who also serves alongside the doctors on the group's leadership committee.
Few local health care professionals say that Richmond lacks world-class, comprehensive pediatric services. But having those services dispersed throughout the community — in private practices, specialty centers and various hospitals — can cause hardships for children and families already traumatized by a child's illness.
"This needs an integrated strategy; they're right on that," says Roice Luke, professor emeritus in VCU's Department of Health Administration. After reviewing regional statistics on pediatric hospitalization at Richmond magazine's request, he concludes that as a practical matter, VCU and PACKids must return to the negotiating table if there is any hope for the proposal to be realized in a substantive way. "They're asking VCU to close down capacity to meet their vision," Luke says of PACKids. "That's not going to happen." VCU opened a newly renovated neonatal intensive care facility with 40 beds at its downtown campus in 2008, bringing its total pediatric bed capacity to 101. The PACKids hospital model assumes there would be 200 beds maintained at about 80 percent occupancy.
Luke sees HCA's withdrawal as an additional blow, because the single remaining local partner is the Bon Secours Health System, which has the smallest market share of pediatric patients, according to statistics reported to the federal government during the last eight years. HCA officials say that they will not agree to the PACKids plan as outlined, citing concerns about the first phase of a feasibility study. "The study didn't substantiate that a children's hospital would be viable financially," HCA Virginia spokesman Mark Foust told Richmond magazine in a May 31 email. "We cannot support the current proposal, but are certainly willing to keep the dialogue open with all interested parties."
Dr. Ted Abernathy, a pediatrician and founding member of the PACKids board, says he's hopeful that HCA, Bon Secours and VCU can stay focused on children rather than on financial advantages. "The purpose of the study was to verify the financial viability of an independent children's hospital," he says, "and confirm that the entity would not need to be subsidized at some point in the future … It was not to determine whether a single entity would generate a higher [profit] margin than the current fragmented system."
HCA's decision came about a month after VCU withdrew support, citing the participating hospitals' need to give up bed space and to cede control to an independent board. As proposed, the three participants initially would have equal representation on the new hospital's governing board, but after nine years, the board would be selected at large.
At a town hall meeting on May 7, PACKids reaffirmed plans to forge ahead without VCU, but at that time was unaware of HCA's misgivings.
The biggest reason for cooperation between all three health systems, Luke says, is that a dedicated children's hospital in Richmond would be serving a relatively small number of patients. "There isn't enough business out there in a city the size of Richmond to sustain two acute care facilities — there's only room for one," he says. If divided, the small market share likely would lead to a greatly scaled back version of PACKids' envisioned stand-alone facility, Luke suggests — essentially a high-end birthing hospital.
"The vision is right, but the strategy is wrong," he says of the PACKids efforts thus far, with a group of doctors trying to dictate terms to the health systems' leadership. "You don't put together a center of excellence like this with toothpicks."
Members of Richmond's medical community cite a succession of efforts, stretching back more than two decades, to create a stand-alone children's hospital. Each of them stumbled. In late 2005, VCU announced plans to partner with Children's Hospital of Richmond and build such a facility at its medical campus downtown. Children's Hospital was to raise the funds and build the $100 million to $150 million facility, and VCU would operate it. Citing a downturn in the economy, VCU later tabled the plan. In 2010, VCU and Children's Hospital announced a merger that would allow "a continuum of services" spread across various sites.
Mark Wietecha, who became president of the national Children's Hospital Association in September, says that PACKids approached him about working as a consultant. He declined based on his initial assessment that the plan would not work.
Wietecha estimates that building a Richmond children's hospital would require about $400 million today, based on projects in comparable localities. PACKids' own study assumes $500 million in startup costs. So far, private donors have pledged at least $150 million. Wietecha says $200 million is needed to get all the parties back to the table.
Health systems do collaborate to form children's hospitals, Wietecha says, noting a recent partnership between Sentara Healthcare and Bon Secours in Hampton Roads. However, "there's not one in the country that has accomplished this kind of thing," he says of a facility with three hospital groups involved.
"It always ends around control and money — there's no way around that," he says, pointing to an analogous case in San Antonio, where talks between a Catholic hospital, a university hospital and a county charity hospital recently fell through.
In a best-case scenario locally, PACKids could reconsider its governance strategy, recognizing that VCU would have to give up more beds than the other partners, and would have to uproot its pediatric research and teaching components, Wietecha says. "VCU probably comes in and says … listen, we're the first among equals and we've got the biggest assets and we want 50 percent of the board." But more likely, "in the end, you just can't make it work. The money doesn't work. The governance doesn't work, and that's even after three or four tries."
Scott, of PACKids, says the possibility that VCU might not return to the table has necessitated at least considering a partner, from outside the region. Many of PACKids doctors have deep affinities for the teaching hospital, so this is not the preference, she says. "But the realization is that the partner could come from anywhere — it doesn't have to be from here in the city." She notes that the University of Virginia Medical Center participated in early conversations, and "there are other academic and clinical institutions that have expressed interest." Scott characterized the conversations as preliminary, and she did not identify the outside partners.
Wietecha says such a fallback strategy could work, but the result likely will bear only passing resemblance to the comprehensive hospital envisioned by PACKids. "There are certainly people in the hinterlands," he says, mentioning Children's National Medical Center in Washington and Johns Hopkins University. " [But] they have one big problem: They don't have any [local] doctors, and they don't have any children on the ground."