CRESTLINE — Plans to renovate Crestline’s vacant Geyer’s grocery store marked Avita Health System’s latest announcement signaling its growth spurt to another neighboring community.
In six to eight months, the 37,000-square foot Geyer’s building will be the health system’s central distribution center for nearly 40 employees. The strip mall next to Geyer’s will also serve as the company’s conference center.
Avita Health System will have a total of 35 buildings once the Geyer’s renovation is complete, most of which are located in Richland County.
The announcement followed the company’s latest expansion plans for a Bellville 1.7 acres lot. Construction for that 5,500 square-foot primary care clinic will begin next year.
Also, the company received a historic $91.4 million loan from the U.S. Department of Agriculture in November 2015 to expand its facility in Ontario. That 185,000 square-foot facility is expected to create 350 jobs and to provide health care to nearly 125,000 residents in the tri-county (Richland, Ashland and Crawford) area.
According to the health system’s Marketing and Community Relations Director Kelby King, the company recently transferred a physician of plastic surgery, a sports medicine physician and orthopedic surgeon to Marion’s Delex One building.
“Our growth is happening for several reasons,” King said. “We have a very strategic planning process — it’s intensive and it extends to board members, to the administration team and the CEO.
“They have put into place so many facilities that feed into each other and serve different portions of our communities. The community is speaking to us saying, ‘We need X, Y and Z,’ and we want to fill those needs as well.”
OhioHealth Mansfield is experiencing similar growth patterns on a larger scale. This particular health system also serves six different counties in Ohio, with plans to expanding into Ashland in the near future with Dr. John Hanna, a primary care physician.
The hospital in Mansfield expanded in September 2015 with the construction of a $53 million, 157,000 square-foot facility that houses additional medical offices and a surgical robot.
The hospital also announced June 24 the opening of a “freestanding emergency department in Ontario.” The $5.8 million project is slated to open in 2017 and will be in front of Meijer on Lexington-Springmill Road.
OhioHealth Mansfield’s addition of the eight-bay emergency department is comparable to Avita’s plans to introduce a 22-bed emergency department in early 2017 at its Richland Mall location. The two buildings are less than two miles apart.
Between the two health care providers, there will be 62 beds available for emergencies within a five-mile radius in the Mansfield area. The largest emergency department exists within the OhioHealth Mansfield hospital on Glessner Avenue.
Turf war or healthy competition?
Recent acquisitions of building space and land for construction suggests a turf war between the two entities. But the rapid growth also corroborates with a state and national trend.
The U.S. Bureau of Labor Statistics projects a 17-percent increase in medical and health services managers from 2014 to 2024. This rate is “much faster than the average for all occupations.”
BLS attributes the growth to an aging baby-boomer population.
Ohio’s population of residents 65 and over was 1.6 million during the nation’s last census in 2010. The Census Bureau estimated that number jumped to 1.8 million in 2015.
Nationally, that number was over 40 million in 2010, compared to 35 million just 10 years prior. The 10-year difference amounts to a 5.8-percent increase.
Avita Health Systems and OhioHealth Mansfield downplayed any mention of a turf war; however, competition does exist.
“Our growth is in response to the needs of the community. The largest need is to improve access to healthcare,” OhioHealth Mansfield and Shelby Hospitals President Jean Halpin wrote in an email.
King echoes that sentiment.
“We’re not in a footrace, no. But competition is healthy. If there are more health options, the community wins,” King said.
But, apparently, so does the hospital.
Both health systems have improved their bottom lines within the last three years. Since Avita’s consolidation of Bucyrus and Galion Community Hospitals in 2011, the Galion campus has experienced an average 14 percent revenue growth year-to-year.
Before Mansfield and Shelby hospitals joined the OhioHealth system, revenue was dropping, according to MedCentral’s 990 forms. In 2010, its net earnings were reported at $191 million. In 2011, that fell to $175 million and fell further in 2012, ending the year at $170 million.
When OhioHealth, a conglomerate of 11 hospitals, acquired the Mansfield and Shelby buildings, the two local hospitals earnings combined amounted to $207 million in 2013, a $37 million increase.
Are county residents getting sick more often?
Numbers indicate no.
According to Mansfield Emergency Department records for visits, the ER experienced a dip in visitors in 2012 and 2013. However, numbers stayed right around 51,000 in 2014 and 2015.
In OhioHealth’s Shelby emergency department, the number of visitors have dwindled steadily since 2011.
King said Avita’s emergency departments have stayed the same in terms of how many patients they receive each year.
If residents in Richland and surrounding counties are not falling ill more frequently, why do the area’s two main hospital systems continue to invest millions in expansion projects and real estate acquisitions?
A shift
According to Richland Public Health Commissioner Martin Tremmel, the community hospital system as we know it is changing.
“One of the criticisms around the nation and Ohio is that community doctors don’t exist like they used to,” Tremmel said. “The systems are huge, the amount of money spent in the system is overwhelming and difficult to control it.”
The reason is twofold: Technology and health entitlement programs.
Tremmel said health entitlement programs like Medicare and Medicaid are driving health care to a uniform health system on a national and statewide scale.
“We’re reimbursed through tax dollars that go into entitlement programs like Medicare and Medicaid. This is a checkbook that continues to write bigger checks every week, every month, every year. So the system is driven now toward integration, efficiency and outcomes,” he explained. “If you go to one of these systems here, or if you go to one of the largest well recognized systems in Ohio, the reimbursement system is the same — there’s the same result.”
What drives integration, efficiency and outcomes?
The newest technology, Tremmel said. If a community does not have state-of-the-art technology like MRIs, CAT scans and other specialized machines, patients are forced to transfer to a hospital that does.
“The system is now driving these standards,” Tremmel said.
If community hospitals don’t meet the system’s standards, the hospital system’s bottom line shrinks — which unfortunately results in fewer, small community hospitals, he said.
To make matters tougher for hospitals, each system is rated by Medicare and displayed online. OhioHealth Mansfield is ranked 39 out of all Ohio hospitals and Avita Health System in Bucyrus is 142.
Keeping the ‘community’ feel
Tremmel said Richland Public Health works alongside both of the region’s major health systems to foster close relationships with patients. But the main concern is a patient’s longterm health. Tremmel believes longterm health not only helps an individual — it helps the local economy.
“Companies in this county see double-digit premium increases to their health insurance every year. That is unsustainable. We have to become a healthier community,” Tremmel said.
By becoming healthier by eating well and exercising, hospital and family doctor visits go down, which drive insurance premiums down too.
“That’s why we partner with the library, the hospital systems — nonprofits, walking and biking groups. It’s a great movement, a little quiet … we’d like to make it louder,” he said.
Tremmel said he is proud of the partnership RPH has with local entities to promote healthy living. In fact, he doesn’t see the existence of such a relationship as an option.
“We need to redirect our attention to our children and grandchildren. They’re not eating well, not exercising. They are the generation that will not live as long as their parents. How can we look at that and not want to make a difference?”
An online map curated by HealthData tracks variants like obesity, smoking, alcohol use and physical activity that affect health throughout the U.S. by counties. Click on the link to see where Richland, Ashland and Crawford counties stack up.
