Here We Go Again...

Fox Valley Health Care Transformation Initiative was formed two and one half years ago to oppose a proposed new hospital by ThedaCare on the basis of both cost and need. That project would have shuttered the existing facilities in Appleton and Neenah and created a new one on the southwest side of our area. That effort was ultimately abandoned.

ThedaCare just announced their intention to build a $144 million facility on the campus of Encircle Health on the north side of Appleton just east of Ballard Road. For those of you who don’t understand what Encircle Health is we offer this explanation. In our opinion, it is an effort by ThedaCare to capture independent physician specialists and prevent them from creating their own outpatient services which would compete and draw revenue away from the hospital system. At Encircle, physicians share in revenue that would otherwise be the sole property of the hospital system. Both Neuroscience and Hand to Shoulder already have outpatient capabilities in their existing clinics.

Let’s put this in context. Orthopedic and Sports Institute of the Fox Valley (OSI) is directly across the Interstate from the proposed facility. Does this ring any bells? It should. In May of 2018 Fox Valley Hematology and Oncology abandoned a virtually new, $28 million building adjacent to OSI. They went out of business and that new building remains empty today because ThedaCare built a new Cancer Center (also on the Encircle campus) and hampered FVHO’s ability to compete. Is ThedaCare attempting to drive another competitor out of business? Similarly, has anyone forgotten already that Ascension and Orthopedic and Sports Medicine Specialists (OSMS-Green Bay) have already started construction on a new orthopedics building (about one fifth the square footage of the proposed ThedaCare facility) on the near west side of Appleton? This is completely insane.

Let’s imagine for a second we could turn the clock back to the late 1970s and early 80s. At that time there were Health Systems Agencies (a different HSA than the current Health Savings Account). HSAs were mandated by the federal government to prevent the unnecessary expansion of medical facilities. ThedaCare would have had to present its case for this new facility (because the cost exceeded $250,000) to a local board that was made up of a majority of citizens who were not healthcare providers. That board would have heard arguments, pro and con, for the new project and then voted to either approve or deny the project. If denied, ThedaCare would not receive Medicare or Medicaid payment for any services at the new facility.

Today, you have no voice. These organizations can simply put up these new, completely unnecessary facilities, and you will experience even higher prices (out-of-pocket) and insurance premiums to pay for them. We should ask the following questions:

1. How will this project be financed? More tax-exempt borrowing? A retrieval of the $103 million ThedaCare has stashed in a Caribbean hedge fund?

2. A recent Rand Corporation study showed that commercial outpatient facility fees in Wisconsin averaged 366% of what Medicare pays, well above the national average among 25 states of 284% of Medicare. Given the increase in market power that ThedaCare related facilities would obtain, the implications are the opposite of cost control. Whoops! There go the out of pocket prices and insurance premiums. Whoops again! There go the property and other taxes to pay for health insurance premiums for municipal, county, and school district employees.

3. What commitments to ThedaCare did the two centers make? In short, would they lose hospital privileges if they did not agree? Would they lose access to electronic medical records they presently enjoy as Appleton Cardiology, now known as Heart and Vascular Institute, did?

4. ThedaCare proposes adding 25 new inpatient beds in the proposed facility when no hospital in the area has an occupancy rate much above 50%. Why are these needed?

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