Business

Summit marks a year

It's been a bumpy first year for Phenix City's Summit Hospital, a $36 million facility that opened its doors Aug. 24, 2006, to much anticipation within the community.

The first year has been marked by the closure of one of the hospital's departments, employee layoffs, a resignation by its chief executive officer and speculation of a buyout or, in a worst-cast scenario, closure.

Hospital officials acknowledge the past year is a classic case of lofty expectations that went unmet.

"Like any new business — and we're just a really large, new business — you have to start with assumptions," said Ian Watson, chief operating officer at Summit Hospital. "And certainly a lot of assumptions we had didn't turn out to be correct."

The numbers speak for themselves.

Relying on population-based statistics, the hospital had predicted an average of 40 to 50 patients would occupy the 70-bed facility at any given time. Today, fewer than 30 of those beds are routinely occupied.

At opening, 200 procedures per month were expected to be performed in Summit's operating room. The hospital currently conducts about 100 a month.

To its credit, officials point out the hospital celebrated a major accomplishment simply by getting the doors open and remaining solvent.

And with challenge comes room for growth — something Watson said the hospital is truly focused on.

"We're here and we're open and we're operating," Watson said. Volume issues

Summit — which is owned by Ameris Health Systems — has about 70 physicians who work out of the facility. Only six, however, consider Summit their primary hospital and generate "the bulk of Summit's work," Watson said.

Without more doctors regularly admitting patients to Summit, the hospital has experienced low and fluctuating patient volumes.

"All physicians — they work at multiple hospitals, they have referral relationships," Watson said. "You don't change that just by building a hospital and saying, ‘Hi. We're here.’ ”

Greg Griffith, who resigned as Summit CEO about two months ago, said the hospital's biggest challenge in its inaugural year was putting a medical staff together and "assuming or hoping that some of the Columbus physicians would come over and bring some work with them."

"That took a lot of work and a lot of one-on-one," he said. "And it was slower than I certainly anticipated."

Without expected patient volumes, Summit has had to staff the facility accordingly. In July, about 25 employees were let go, most from the surgery units.

"The volume didn't materialize," Watson said. "As managers, we need to manage to what we have. Not what we want to have."

The hospital had planned to employ up to 350 employees. At the moment, there are about 210 on the payroll, most of them employees whom are called in on an as-needed basis.

Watson said it seems doctors and patients simply started frequenting other area hospitals after Phenix City's only major medical facility, Phenix Regional Hospital, closed its doors in March 2002.

Phenix Regional was operated by Columbus Regional Healthcare System, which currently operates The Medical Center.

"We had to do everything starting from scratch," Watson said of the startup. "That really does complicate a project like that."

In the Columbus area, a number of the major local medical facilities have enjoyed longevity in the community. The Medical Center, for example, was established in 1836. St. Francis has been in Columbus more than 55 years.

"It just takes a while of struggling and finding your niche in the market, and they'll do just fine," Griffith said. "I think they're just normal growth pains, but I think it will be someone's crown jewel someday."

John Storey, Phenix City councilman for the district that surrounds the hospital, said the new facility will simply have to make adjustments.

"I think just like any other business, you've got to have a good old marketing plan," Storey said. "And once we get those interchanges complete, that's going to have a lot of impact on it."

Construction on the interchange connecting the U.S. Highway 80 Bypass and Riverchase Drive has temporarily blocked certain routes to Summit. The project is expected to be completed by the end of 2008.

Past troubles



Summit's troubles became apparent last spring, when the hospital announced it would temporarily shut down its labor and delivery unit.

The unit had been struggling financially since its opening. Because of low Alabama Medicaid reimbursements for labor and delivery patients, the unit had been operating at a loss of $100,000 a month — or a projected $1.2 million a year. All of its patients in this unit were Alabama Medicaid recipients.

Officials attributed the closure to a shortage of qualified obstetrical nurses.

"We've had some cash flow issues," Watson said. "But the main thing now is we've got our expenses in line with the revenues we generate with the patient volume we see. That provides us the stable base that will allow us to move forward."

Watson admitted Summit currently is not breaking even, but administrators are hoping it will do so this month.

Griffith's resignation, meanwhile, came with him citing a desire to pursue other interests — specifically, health-care consulting. In an interview last week for this story, he said the hospital's challenges did not play a part in his departure.

"It's just you put a lot of your effort and time in it, and you kind of get a little case of burnout," he said.

Summit has divided CEO duties among its management team. Company President Robert Bauer is acting as interim CEO as well. He is now conducting phone and face-to-face interviews with potential candidates, Watson said.

"Successful CEOs are marked by how well they build relationships," Watson said. "We don't have those relationships as firm as they should be, and they take time. That needs to be the CEO's primary responsibility." What's ahead?

Summit has also been the subject of buyout speculation, specifically by a group of Hughston Clinic physicians.

When asked last week about the possibility of Hughston Clinic physicians being interested in buying Summit, Hughston Clinic Chief Operating Officer Mark Baker simply responded that the clinic's physicians "have not signed any agreement to buy Summit Hospital."

"We're looking at expanding at all levels," he said. "We're expanding in LaGrange, we're expanding in Valdosta, we're expanding in Auburn. It is too early for me to comment any further on that."

Despite the challenges throughout the year, Summit officials said there is still time to turn things around at the Phenix City hospital.

Watson characterized the medical facility's condition as "stable."

The hospital has relied on the core of its business: medical inpatients and general surgery.

And its emergency room has hit all major goals, providing Summit with half of all its inpatient admissions.

When it opened last year, the hospital expected to have an emergency room with 13 treatment areas handling as many as 30,000 patients a year — a level Watson said has been reached.

"The ER has been very good for us," he said.

As for plans in 2008, Watson said with available capacity, the facility plans to promote different types of surgery. Outpatient diagnostics — including X-rays, laboratory tests and CT scans — are big possibilities for more business.

On a larger scale, Summit needs to focus on accessibility and awareness, Watson said. The completion of the off-ramp should help with accessibility, he said.

"It's just a question of getting physicians and the public to realize the full array of services we can do," Watson said. "We basically opened a hospital expecting a volume that we didn't achieve. We want to be in a position in 2008 for smart growth."

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