A decision by two of the area’s largest healthcare systems has thrown a major wrench in the plan to build a standalone children’s hospital in Richmond, leaving the group behind the project scrambling to make sure it doesn’t flatline.
Bon Secours and VCU announced Thursday their decision to withdraw support for an independent children’s hospital that has long been talked about in the region.
The organizations’ change of heart comes seven months after they signed a memorandum of understanding pledging their involvement in the process with the Virginia Children’s Hospital Alliance, a group created to spearhead development of the project. Their backing has been seen as vital for the project to move forward.
The reason for the decision, VCU President Michael Rao said during a press conference Thursday, has largely to do with cost.
Rao cited a rapidly changing national healthcare climate as one reason why the children’s hospital is not feasible, claiming that trends are moving away from standalone facilities and focusing on coordinated, consolidated care networks that promote outpatient technology and home-based programs.
“The currently proposed independent model looks to be opposite of the general direction in which healthcare is tending to focus,” Rao said. “At this point what we saw was that we couldn’t manage the kinds of risks that we saw with the costs that would be inevitable to the current proposal.”
Katherine Busser, CEO of the Virginia Children’s Hospital Alliance, said the project is, in fact, feasible and the alliance is not going down without a fight. Her group, which includes a number of local pediatricians, believes that creating a concentrated facility for children’s services will benefit families in the area.
“Clearly we’re all very disappointed,” Busser said. “But just because there are a couple of bumps in the road doesn’t mean you have to give up.”
Toni Ardabell, CEO of Bon Secours Richmond Health System, echoed VCU’s reasons for backing out of the project. She added that issues of equity, ownership and governance were also stumbling blocks for the nonprofit health system.
“We felt that we could not give away the pediatric part of our mission and ministry and not also have some ownership of the new hospital,” Ardabell said. “And the way it was being proposed, as a freestanding, independent hospital … that is a model that is not working right now.”
The health systems’ involvement in the proposed hospital would require Bon Secours and VCU to pare back some of their children’s care services to divert those patients and funds to the new facility.
Bon Secours operates four hospitals in Richmond that cater to both children and adults. VCU is in the process of building a $168 million Children’s Pavilion downtown, and a $28 million donation made last year will be used to establish a Children’s Hospital Foundation Heart Center in its Critical Care Hospital.
Busser has said that the hospital project could cost about $600 million, and the alliance’s efforts to raise funds have been ongoing for more than a year. The project has drawn pledges of millions of dollars in support, most notably a $150 million pledge from well-known local philanthropists Bill and Alice Goodwin.
“As an individual, I’m very sorry that we have come to this point of view,” Bill Goodwin said. “As far as I’m concerned, I’m just going to table our interest, and maybe in the future it will be clearer about what’s best for the community, and particularly for the children.”
Leading up to this announcement, the alliance was in the process of selecting a location for the hospital after sending out a request for proposal and receiving 26 responses for properties around the area. Busser said Thursday that an answer to the location question is “on the table, we just have to work a few things out.”
Goodwin, through his real estate entity Riverstone Properties, purchased a sizable chunk of land in Henrico County earlier this year that looked like an ideal location for the hospital.
The next step, Busser said, is to regroup with her community partners and try to have some open dialogue with the health systems to discuss what led to the decision and how to address concerns.
“It’s more than just a business decision,” Busser said. “Sometimes it’s also a decision about doing the best thing for the community.”
Busser said she hasn’t given up on Bon Secours and VCU signing back on to the project.
“I have nothing but hope,” she said.