LVHN eyes expansion into Montgomery County
It wants to build a micro-hospital in Gilbertsville
Southeastern Pennsylvania will get its first micro-hospitals — facilities with small emergency departments and 10 inpatient beds for people who are not seriously ill — as ChristianaCare and Lehigh Valley Health Network seize upon an efficient option for expanding into the Philadelphia market.
Also called neighborhood hospitals, the model is designed to fill coverage gaps in areas that can’t support a full-scale hospital, while allowing health systems to expand their reach into more distant communities. Micro-hospitals are also a way to draw more referrals to the larger health system’s flagship hospitals for advanced care.
ChristianaCare, Delaware’s largest health system, is planning to reopen the former Jennersville Hospital in Penn Township as a micro-hospital early next year. The model would use just one floor of the facility, allowing ChristianaCare to expand on business momentum it has been building for years through primary and specialty care clinics in southern Chester and Delaware Counties.
In northwestern Montgomery County, Lehigh Valley Health Network is building a micro-hospital expected to open this year. The single-story hospital along Route 100 near Gilbertsville in Douglass Township is in the middle of an area where Lehigh Valley hopes to compete with Tower Health, whose Phoenixville, Pottstown and Reading hospitals dominate the inpatient market share there.
The Gilbertsville micro-hospital and another
that the nonprofit LVHN is building in Lower Macungie Township will test a model that CEO Brian Nester has seen succeed in Texas and other parts of the country.
But he acknowledged it remains unproven in eastern Pennsylvania’s highly competitive health care market.
“We know we have to get to a future where our cost of doing business is lower than anybody else,” Nester said in a December interview on Thomas Jefferson University’s preliminary agreement to acquire Lehigh Valley Health. “The last thing we need to do is build big box replacement hospitals and big box hospitals.”
LVHN has also proposed micro-hospitals in Hellertown and Whitehall Township, The Morning Call has reported.
Momentum for micro-hospitals
Treatments and even
surgeries increasingly are being moved to outpatient clinics, but hospitals with emergency departments are still where people go for care in times of crisis, such as a heart attack or a serious car accident.
The micro-hospital model allows health systems like LVHN to offer low-level acute care services in a community at 20% to 25% of the cost of a full-scale hospital, Philadelphia lawyer Bill Rhodes said last year on a podcast about the micro-hospital trend.
Micro-hospitals typically don’t have operating rooms or teams of high-cost specialists, but the location gives the parent organization access to patients who need specialized care, according to Rhodes and other experts.
“It creates a stronger stream of referrals back to the flagship hospital and, hopefully, captures a greater percentage of the market in these outer service areas and strengthens the referral
network,” Rhodes said.
The model is gaining momentum in Pennsylvania.
Allegheny Health Network in 2019 and 2020 opened four micro-hospitals in Western Pennsylvania in a partnership with Emerus Hospital Partners, a company headquartered near Houston that specializes in the development and management of micro-hospitals.
The hospitals have been profitable and successful so far in that they “absorb lower-acuity patients and emergency volume, so that our larger hospitals can more efficiently serve higher-acuity patients,” Allegheny, which is owned by Highmark Health, said in a statement.
Emerus is also partnering with WellSpan Health, a nonprofit health system in central Pennsylvania, to open three micro-hospitals in Cumberland and York counties.
The University of Pennsylvania Health System
is also considering a micro-hospital as part of an expansion in western Chester County.
But in Bucks County, plans have stalled for a micro-hospital in Langhorne that had been proposed in 2022 by Capital Health, which has its main hospital in Hopewell Township, New Jersey.
“Capital Health is working on various options for their Langhorne site at this time, which include primarily ambulatory procedural, diagnostic, and testing services,” Capital said in a statement.
Gilbertsville long eyed as new site
Lehigh Valley is not the first health system to eye Gilbertsville for a new hospital.
Tower Health, before it expanded by acquiring five hospitals south and east of its home base in Berks County in 2017, had tentative plans to build small hospitals in Gilbertsville and Orwigsburg (where a joint venture of St. Luke’s University Health Network and Geisinger Heath has since built a hospital).
LVHN’s Nester said Gilbertsville is promising for a micro-hospital because it has a concentration of “patients that have to travel to disparate places for their care.”
The $25 million Gilbertsville facility is expected to receive close to 30 emergency department visits a day, according to a bond prospectus for LVHN’s two micro-hospitals. LVHN’s partner is Houston-based Community Hospital Partners.
Pottstown Hospital had an average of 90 emergency department visits per day in 2022, according to state data. Pottstown’s relatively low patient satisfaction scores could make it vulnerable to new competition, LVHN noted in its bond prospectus.
Tower said in a statement that Pottstown has a different approach than a micro-hospital, which is focused on “stabilizing patients before transferring them out of the community.”
With 216 beds and nearly 600 employees, Pottstown’s goal is to ensure that “our community has access to comprehensive care close to home, eliminating the need for long-distance travel to receive quality treatment,” the company’s statement said.
Sometimes patients choose to go farther, even in an emergency. That’s what Dallas Eltz, 81, did when he had a heart attack about a year ago, choosing Penn State Health St. Joseph Medical Center over Pottstown, even though Pottstown was closer to his home near Boyertown in Berks County, he said last week.
Of the new LVHN hospital, Eltz said with a laugh: “It’s great. It’ll be closer when I have my next heart attack.”