Eau Claire hospital expansion: Who will benefit?

Wisconsin State Roundup

Published July 1, 1993  | July 1993 issue

With rising health care costs preoccupying lawmakers and consumers everywhere, a proposal to expand medical facilities in Eau Claire is drawing public attention.

Residents flocked to recent hearings held by Luther Hospital, Midelfort Clinic and their parent company, Rochester, Minnesota-based Mayo Clinic Foundation, to question the reasons for expansion and express their fears about rising health care costs.

In April, the medical facilities group announced construction of a new outpatient facility, expanded cardiac services, and a full-service helicopter ambulance to serve people in rural areas north and east of Eau Claire. In addition, Midelfort Clinic's neuroscience department, which has been housed at the city's Sacred Heart Hospital for nearly 20 years, will move to a newly created department at Luther Hospital.

The Mayo Clinic, with which Luther and Midelfort merged last fall, has been criticized by some for announcing the roughly $40 million project before the July 1 start of a state law intended to regulate growth of medical facilities.

Under the new law, health care providers will have to obtain a certificate of need from the state's Health Care Cost Containment Commission before embarking on construction projects exceeding $1 million, equipment purchases over $500,000 and any new service that will generate revenue over $500,000 annually.

The Mayo group isn't the only service provider with expansion plans: From last October to June '93 medical service facilities across the state have announced their intentions to spend $623 million on new equipment and building projects. That's compared to $191 million in medical expansion projects for 1991 and $239 million in all of 1992.

While provisions of the state's cost containment package may serve to syphon off some bad ideas before they reach state agencies, most projects pass muster, says Linda Reivitz, deputy director, Programs in Health Management at the University of Wisconsin in Madison.

Reivitz also questions the benefits of Eau Claire's medical facilities mergers, citing studies that prove hospital mergers don't save money. "There's a tendency to compete and market that doesn't stop with mergers," she says.

Although the merits and timing of the Eau Claire expansion are under debate, the project expects to create from 200 to 250 new jobs, including some 40 new doctors, and an anticipated payroll expansion of $13 million by 1995.

Kathy Cobb