DaytonDailyNews.com

As regional director of community health for General Motors for 15 years, Sam Shallaby has seen hospitals in the Dayton area grow and prosper.

But he says the region's current billion-dollar hospital construction boom should worry local consumers and businesses who will end up footing the bill. "It has been quite staggering, and a lot of people in the community are really quite concerned."

Shallaby wonders why the building boom is necessary, especially in Montgomery County, where he says hospitals are operating at 50 to 60 percent of their bed capacity.

"If we're building more, we're adding waste into the system," he said. Shallaby retired last month from General Motors but continues to advocate for consumers as president of the Tri-River Employer Health Care Coalition and a member of the quality council that advises the Greater Dayton Hospital Association.

Hospital construction, of course, often has little to do with bed capacity. Hospital officials say they have to attract more privately insured patients in order to offset growing losses from uninsured patients and dwindling Medicare and Medicaid reimbursement rates.

Brian Bucklew, chief executive of the Greater Dayton Hospital Association, said that's a major reason that Premier Health Partners and Kettering Health Network — the two hospital giants in the Dayton area — are rapidly expanding into the suburbs with new primary and urgent care facilities and beefing up their main campuses with new heart treatment centers. Both are lucrative sources of private-pay patients.

Premier Health Partners alone is spending $135 million for an 11-story "cardiac tower" with 180 private rooms and another $80 million on its Miami Valley South Health Center, which opened in Centerville last fall.

"We need to enhance our patient mix, basically to compensate for our uncompensated care," said Tom Breitenbach, chief executive of Premier Health Partners, the parent organization for Miami Valley and Good Samaritan hospitals. "Premier is handling 75 percent of the indigent care load even though we have only 58 percent of Montgomery County's inpatient admissions. That's vastly disproportionate."

Bucklew said that private-pay patients have been pushing for many of the capital improvements on the way in the region, including hundreds of new private rooms. "No longer do they want to spend two, three or four days in the hospital sharing a room with another patient. They want private rooms and they have more choice in how to spend their health care dollars."

Hospital officials argue that construction projects don't have to increase health care costs because new technology and new facilities can make them more efficient in delivering care.

But under the current system of pay, hospitals have no incentive to improve their efficiency, only to expand their capacity to deliver more care to more people, consumer advocates say. Hospitals and doctors are rewarded for performing procedures and hospitalizing patients — not for finding ways of keeping them healthy and out of the hospital.

"More care is not always better care," said Bill Hayes, president of the Ohio Health Insurance Institute in Columbus. A growing amount of data from think tanks like The Dartmouth Institute show that "areas that spend more on patient care don't necessarily produce good outcomes, and may sometimes produce less good outcomes," Hayes said.

One Dartmouth study found that while the UCLA Medical Center spent twice as much on patient care as the Cleveland Clinic, the two facilities had similar patient outcomes. "Higher spending ... (and more capacity) is not associated with better care," the study concluded.

To expand coverage to America's 71 million uninsured and under-insured citizens, the nation will have to squeeze more efficiency from the health care system or else face an overwhelming cost burden, Hayes said.

Ohio is no exception, he said. Finding ways to encourage health care providers to collaborate on the best, most efficient mix of services will be the focus of a three-day workshop in Columbus on Monday, Nov. 17, expected to draw 180 health care providers, insurers and consumers from around the state.

Congress is moving in the same direction. Earlier this week, U.S. Sen. Max Baucus, D-Montana, unveiled an 89-page health care reform blueprint that provides universal coverage to Americans, emphasizes prevention and wellness and places greater value on primary care and management of chronic diseases like diabetes, arthritis, heart problems and cancer.

But the heart of the Baucus plan is to realign payment incentives to improve the efficiency of care. The plan would promote accountability and coordination among a variety of providers — physician offices, inpatient hospitals, rehab centers and others — to collaborate in finding the highest quality, lowest cost approach to caring for each patient.

Breitenbach agreed that the key to health care reform is better accountability and quality control. As a nation, "we're spending twice as much per person as any other developed country in the world. Are all those services necessary?" he asked. "That's where all of us need to get together and take the Dartmouth (studies) more seriously."