Competition hurts medical center revenue, CEO says

Competition with a 15-bed hospital in Gardnerville was a catalyst in the layoff of up to 50 Carson Tahoe Regional Healthcare employees and the cut of several hospital programs, a healthcare executive said.

Ed Epperson, regional healthcare president and chief executive officer, said administrators had not anticipated the revenue effects of the Carson Valley Medical Center, located just over the border in Douglas County, when they decided in early 2004 to add 27 more beds to the Carson Tahoe Regional Medical Center, which was under construction at the time.

"It is the answer to why we're not seeing the patient load today that we anticipated seeing before we opened the hospital," he said.

He said the medical center has averaged daily six to eight patients less than it had projected.

About 4 percent of the healthcare system's staff members were laid off in May and several programs were eliminated or consolidated as part of a cost-cutting reorganization.

Washoe Health System and Barton Healthcare opened the Carson Valley Medical Center in February 2004. Carson Valley Medical Center primarily serves the people of Gardnerville and Minden and has little impact for the residents of Carson City, Washoe Med spokeswoman Alexia Bratiotis said. On average its daily census is less than six patients.

"Washoe Med is taking no action to compete in Carson City as we believe in supporting not-for-profit healthcare services like Carson Tahoe Hospital," she said.

Epperson takes a harder line.

"We were the provider to Minden and Gardnerville until they opened up, and we still are in many cases," he said.

The hospital board made the final decision to add the 27 beds, which Epperson said they couldn't change even after the competing hospital opened.

"We thought we'd need those beds," said trustee Jo Saulisberry. "We felt as long as we had the money we should go ahead with it."

Board Chairman Caleb Mills said they could've held off on the additional rooms if the situation warranted it.

Epperson said the Gardnerville hospital opened without going through an expansive state certification process that would have given them in-depth details on the hospital's capacity and services.

Gerry Conley, Carson Valley Medical Center administrator, disagrees.

"These people are just grasping at straws," he said about accusations that the critical-access hospital didn't inform the community about its services before it opened.

Carson Valley did not need to go through the state certificate of need process because its project cost less than $2 million and it was a remodel of an existing building, but it had other certification requirements, said Mike Willden, director of the Department of Health and Human Resources.

If Carson Tahoe is worried now, things may get worse for it when Carson Valley Medical Center adds another eight beds, which will be completed in September or October. It filed a letter of intent with the state in August 2005. This project only requires a state notification.

Saulisberry said the eight beds may have a little impact on Carson Tahoe, but it could be a good thing for a growing community.

Epperson said this is another example of how Carson Valley Medical Center will avoid public scrutiny for an expansion project that will affect a neighboring hospital.

Carson Tahoe Regional Medical Center has another competitor a little closer to home - situated on its own 80-acre campus - but it doesn't evoke as much concern from Epperson.

Administrators expected to lose patients to the Sierra Surgery Hospital, which has 15 patient rooms a few hundred yards from the hospital.

The medical center is a financial partner in this venture, so the sting is a little sweeter.

• Contact reporter Becky Bosshart at bbosshart@nevadaappeal.com or 881-1212.