Plans for a 107-bed hospital in Provo may make Utah County the new battleground for two competing health-care conglomerates.
HealthTrust Inc., a national for-profit corporation that owns seven hospitals in Utah, wants to build a hospital somewhere in north Provo. A spokesman for the company declined to name a specific site.Intermountain Health Care Inc. already owns three hospitals in the county, including its local flagship, the 409-bed Utah Valley Regional Medical Center in north Provo.
HealthTrust began making plans for its own north Provo hospital six months ago. The corporation has privately circulated prospectuses that include total square footage - 124,168 - and estimated profits for the hospital's first three years of operation - between 22 percent and 35.6 percent.
The hospital - tentatively named Mountain View Hospital North - would provide Utah County residents with a cheaper alternative to the Utah Valley hospital, according to Stephen Walston, chief administrator at Mountain View in Payson.
HealthTrust commissioned a health-care cost analysis that showed that Mountain View's rates are 13 percent to 16 percent below Utah Valley's, Walston said. Rates at Mountain View North would be similar, he said.
HealthTrust is relying on an unusual financing tactic to ensure the support of doctors in Utah County: offering doctors part ownership in the hospital. The Deseret News obtained a copy of a letter HealthTrust sent to area doctors that says limited partnerships in the hospital sell for $500. Doctors were asked to return a signed form along with $500 if they want to buy a limited partnership.
Though it requested money, the letter appears to be an attempt to gauge local doctors' support for the hospital. The letter contained a disclaimer that said it was not a formal limited partnership offering. The request for $500 and the signing of a limited partnership agreement "is only to facilitate negotiations and discussions relating to the proposed hospital," the letter said.
If the hospital is not built, HealthTrust will return the $500, the letter says.
No Utah hospital has used such a financing tactic before, according to the Utah Hospital Association, but Walston says it is a common procedure elsewhere.
"HealthTrust has sold limited partnerships in facilities for the last 12 or 13 years," he said. Hospitals jointly owned by HealthTrust and area doctors have been built in California, Arizona, Texas and Tennessee.
Under a typical partnership arrangement, the more successful the hospital is, the more money the physicians would make.
IHC officials had little comment on the proposed hospital. "It's a free marketplace. With the deregulation of the health-care industry, competition is encouraged, and we will probably see more of it in the future," said John Taylor, IHC's assistant vice president of public relations.
Mountain View North is not a "done deal" by any means. The decision to build the hospital will be based, in part, on local doctors' interest in buying the limited partnerships, Walston said. HealthTrust Inc., based in Nashville, Tenn., will decide sometime in the next two months whether to build the hospital.
At first glance, the area doesn't seem to need a new hospital. Utah Valley Hospital had an average occupancy of 66.4 percent during 1990. Its average occupancy through March of this year rose to 70 percent. Mountain View is somewhat more than half full most of the time, Walston said.
Despite that, Healthcare Trust is spending $10 million to expand Mountain View, adding 26 beds to the 90 beds already there.
Hospital cost comparisons
Comparisons for average costs and lengths of stay for several
treatments at Utah County hospitals:
Simple treatment for pneumonia Stay Cost
Utah Valley Regional 7.3 days $6,568
Orem Community Hospital 5.3 days 5,018
Mountain View Hospital 5.5 days 4,970
American Fork Hospital 4.9 days 4,255
Vaginal infant delivery with no complications
Utah Valley Regional 1.7 days $1,610
American Fork Hospital 1.7 days 1,523
Orem Community Hospital 1.4 days 1,491
Mountain View Hospital 1.5 days 885
Nursery care of normal newborn with no complications
Orem Community Hospital 1.5 days $489
American Fork Hospital 1.9 days 455
Utah Valley Regional 1.7 days 440
Mountain View Hospital 1.8 days 368
Source: Utah Hospital Association - Guide to Hospital Charges, 1989
HealthTrust Inc. hospitals in Utah
Number of beds
Pioneer Valley Hospital, West Valley City 139
Mountain View Hospital, Payson 118
Lakeview Hospital, Bountiful 128
Brigham City Community Hospital, Brigham City 50
Ashley Valley Hospital, Vernal 39
Castleview Hospital, Price 88
Proposed--Mountain View Hospital, Provo 107 (Satelite Facility)