Health Hazards

Dig, we must once read the signs around utility construction sites, leading those who were stuck in traffic snarls created by such work zones to grumble that utilities were digging up the streets to bury more of their ratepayers money.

Similarly, those observing the construction cranes looming over numerous hospital projects around Western Washington must have wondered if the additional space was needed not only for more patients but also for the additional revenue those patients, and their insurance companies, generated.

If there has been a recession in the economy generally and construction specifically the past few years, you sure couldnt tell it by the amount of activity at local medical complexes.

Rentons Valley Medical Center added an emergency services tower. Puyallups Good Samaritan put in a new patient care building. Bellevues Overlake Hospital Medical Center is expanding. Swedish Medical Center is building a new medical center in the Issaquah Highlands. Enumclaw Regional Hospital recently moved into a new building.

That listhardly comprehensiveis part of the whirlwind sweeping the sector. Every hospital system is building networks of free-standing emergency rooms, urgent-care clinics and branch medical campuses. And to make sure consumers know about those new outposts, theyve lined the regions freeways with billboards to advertise their networks and services.

When theyre not building, theyre merging and affiliating. Enumclaw Regional is now St. Elizabeth Hospital, a part of the Franciscan Health System that also includes hospitals in Tacoma (St. Joseph), Lakewood (St. Clare), Federal Way (St. Francis) and Gig Harbor (St. Anthony). Valley Medical has been considering a link-up with the University of Washington Medical Center, which absorbed Northwest Hopital in 2010. Swedish, which took over Stevens Hospital in Edmonds last year, has been discussing partnerships with Olympic Medical Center, Jefferson Healthcare and Forks Community Hospital.

Its not surprising theres so much going on in health care. We have a growing population, and a large segment of the populationwere talking about you, aging Baby Boomerswill require and consume more medical services. Thanks to the wonders of modern medical technology, doctors have more services to offer.

Response to the changing market is a change in the industrys structure. The free-standing, independent, single-community hospital is rapidly becoming an anachronism. There are economies of scale to be gained by consolidating into larger networks. But there are also synergies to be had by creating regional networks that can seamlessly channel patients from local clinics to hospitals for more complex procedures.

Those changes occasionally lead to turf fights as networks try to cover as much of the region as they can. Swedish and Overlake have been tussling for years over Issaquah. MultiCare won regulatory approval for a new hospital in the growing Southeast King County town of Covington, although Valley Medical and Auburn Regional Medical Center wanted to serve that market by adding beds at their own facilities.

Those trends are going to continue as long as there are partners to sign up and territory to stake out. Eventually, the big surviving networks are going to run out of both.

What happens then? Will the major players start eyeing one another as merger candidates? Will the local networks consider affiliating with health-care conglomerates elsewhere in the Northwest or the broader United States?

Looming over those issues is an even bigger, meatier one: Wheres the money going to come from to sustain these networks? The private sector says it cant afford health-care costs for employees (who cant foot the bill on their own), and government is quickly learning it cant, either. As for the chimera that electronic record keeping, wellness campaigns and the like will contain health-care costs, you could make a more compelling case for the existence of a sasquatch.

All of which means the industry, as transformed as it has been in the past decade, could be in for even more dramatic shakeups in the next. It may not happen in the coming year or two, but it wont be long before we see an end to the time when the construction worker is as central to the hospital industry as the doctor and the nurse.