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Memorial Hermann Selling Its Southwest Hospital To Harris County


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County wants to buy Memorial Hermann SW

Hospital district purchase could run to $185 million

By PEGGY O'HARE

HOUSTON CHRONICLE

Aug. 6, 2009, 9:36PM

The Harris County Hospital District has tentatively agreed to buy Memorial Hermann Southwest Hospital this fall with hopes of expanding medical care access to the uninsured and underprivileged, hospital officials announced Thursday.

The sale, if approved by Harris County Commissioners Court, would allow the county's hospital district to add 600 beds to its system to keep up with public demand. Officials with both hospital networks declined to release the cost of the move Thursday, saying a confidentiality agreement prohibits them from discussing that, but County Commissioner Steve Radack said he had heard a potential price tag ranging from $165 million to $185 million.

The district entered into a non-binding letter of intent to buy the hospital. The acquisition, scheduled to close by late November, will not result in a tax increase, hospital district officials said. The hospital district said it plans to operate the facility as a full-service hospital serving privately insured patients, as well as those on Medicare, Medicaid and those without medical insurance, they said.

Dan Wolterman, chief executive officer for the Memorial Hermann Healthcare System, said his nonprofit network initially had no plans to sell the hospital at 7600 Beechnut, but noted the county hospital district's proposal to purchase the building “just made good sense” when further studied.

Though Memorial Hermann Southwest Hospital has remained profitable, its earnings have declined in recent years as the demographics of its patients have changed and other nearby hospitals have closed, Wolterman said.

“Ideally, we would not have ventured out to do this, but this is the right thing to do,” Wolterman said Thursday night. “The southwest (Houston) market is a difficult market. Just going back seven or eight years ago, there were multiple hospitals serving that market — today the (Memorial Hermann) Southwest Hospital is the only one there.

“The neighborhood surrounding (Memorial Hermann) Southwest Hospital has experienced significant demographic decline over the last 10-plus years. That has caused some difficulties in running this hospital efficiently as you are inundated with uninsured and underinsured patients and government patients from Medicare and Medicaid ... We have seen a slight deterioration in its profitability and in the volume of patients we treat on any given day. But it's not been significant — just a slow, steady erosion.”

Wolterman said the Memorial Hermann Healthcare System's network is not overleveraged or overextended. He also said the proposed hospital sale was not driven by a need to “dump” some of its property.

The entire Memorial Hermann system just experienced one of its most successful years ever, he said, with the nonprofit network's earnings exceeding its budgeted income by 62 percent. Actual earnings across the Memorial Hermann Healthcare System as a whole have exceeded budgeted income for nine consecutive years, he said.

“This (proposed sale) was not done out of a position of weakness or problems,” Wolterman said Thursday night. “This was done out of a position of strength. We are very strong financially and have been.”

County hospital district officials stressed they have no plans to close any of its other hospitals, such as LBJ Hospital.

Besides adding more beds, the proposed purchase also will allow the county hospital district to pick up more Medicare and Medicaid patients, as well as privately insured patients, which will ultimately help subsidize the costs of its charity and indigent care, said David Lopez, chief executive officer of the Harris County Hospital District.

“The demand for acute care is going to continue to grow,” Lopez said Thursday night. “This gives us an opportunity to take responsibility for the individuals that are considered gold-card members in our community. So there's a lot of reasons why this makes sense for us.”

If the hospital sale is approved, Lopez said, he hopes to staff the facility with a mix of doctors already working there and physicians affiliated with the county hospital district.

Memorial Hermann officials said they do not anticipate any layoffs will occur as a result of the proposed sale. If any jobs are eliminated, employees would be moved to other Memorial Hermann hospital campuses, Wolterman said.

The county's proposed purchase encompasses the hospital building and four medical office buildings, a Heart and Vascular Institute, an accredited cancer center, a surgery center and an outpatient imaging center. The wellness center and the University Place Retirement Community on the hospital campus would not be included.

Harris County Judge Ed Emmett said more health care facilities are needed on Houston's southwest side and the deal could benefit both institutions by shifting patients who rely on Medicare or Medicaid to a public facility.

Members of Commissioners Court were told recently that a deal was in the works, Emmett said, but hadn't been provided with details before Thursday's announcement.

County Commissioner Sylvia Garcia said she is open to the proposal if the price is reasonable and no tax increase is required.

“Anything the hospital district can do to enhance its delivery of services and increase the access to care is a positive thing,” Garcia said.

But Radack was more skeptical. “Obviously, this is a huge potential expenditure,” he said Thursday.

Radack said he is particularly concerned the hospital's location, near Fort Bend County, will make it a magnet for residents of other counties seeking free health care.

“I've been very concerned, now more than ever, with all the free care we've been giving to people from other counties, which needs to stop,” Radack said.

The Chronicle's Mike Snyder contributed to this report.

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I hope they do buy it. Only 2 hospitals serving the un-insured in Houston is not enough. Ben Taub and LBJ arent enough.

(Besides the health centers and clinics.)

Just out of curiosity, if you are uninsured does the county give you free or discounted care?

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Just out of curiosity, if you are uninsured does the county give you free or discounted care?

There are programs for free care based on income, etc. The County provides emergency care without looking at your ability to pay, but will come after you later if you have an income that exceeds the thresholds.

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There are programs for free care based on income, etc. The County provides emergency care without looking at your ability to pay, but will come after you later if you have an income that exceeds thresholds.

I believe The County Attorney will also file claims against estates largely to cloud title to a homestead.

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Wow, this may belong is the Historic Houston thread. For those that remember, this facility when new, was the magnificent replacement for the Memorial Baptist Hospital that was downtown. Look for Memorial Hermann to dump other former Memorial facilities in the future.

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I hope they do buy it. Only 2 hospitals serving the un-insured in Houston is not enough. Ben Taub and LBJ arent enough.

(Besides the health centers and clinics.)

There is also Quentin Mease Hospital on MacGregor and Scott, but they're still not enough. The southwest part needs its one to take the pressure off Ben Taub.

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Wow, this may belong is the Historic Houston thread. For those that remember, this facility when new, was the magnificent replacement for the Memorial Baptist Hospital that was downtown. Look for Memorial Hermann to dump other former Memorial facilities in the future.

My two kids were born in MH Southwest. Now they will never know the hospital by that name.

It makes every sense for Memorial Hermann to dump this facility. It is losing money, and they're moving the corporate offices out to Memorial City. So why not get out of the area completely?

Memorial Baptist predates me. Which are their facilities? If Memorial City is part of them then I can tell you they're not going to sell that. It brings in money.

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Wow, this may belong is the Historic Houston thread. For those that remember, this facility when new, was the magnificent replacement for the Memorial Baptist Hospital that was downtown. Look for Memorial Hermann to dump other former Memorial facilities in the future.

Doubtful. They're all in high growth suburban areas. Besides, MH wasn't looking to sell. They've actually put a great deal into that campus.

What will be interesting to see is how they market University Place. "And your senior facility offers you convenince to a County hospital".

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