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Atrium, Novant competition heats up in Charlotte

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The rivalry between Atrium Health and Novant Health Inc. has entered another competitive front in Charlotte.

State health regulators recently conditionally approved a 26-bed hospital campus for Atrium in the Steele Creek community.

Where the competitive marketplace comes into play is that in May state health regulators approved Novant building a 32-bed acute-care hospital in the same community, about 6 miles away.

That likely sounds familiar to local residents, given Novant and Atrium affiliate Wake Forest Baptist Medical Center built community hospitals about 4 miles apart in Clemmons and Bermuda Run, respectively.

Baptist and Novant needed more than two years — from September 2007 to December 2009 — of often-heated debate and colorful marketing pitches to secure state permission under certificate-of-need regulations that are designed to limit overlap of medical services, particularly from new projects.

Atrium was able to avoid potential regulatory pushback or appeals from Novant by agreeing to transfer 26 acute-care beds and an operating room from its Pineville hospital to the planned Steele Creek hospital.

Still, the proposals for competing community hospitals 6 miles apart provide another example of how population growth in one of the state's largest metros can trump overlap concerns.

"Population growth in North Carolina's metros continues to beat forecasts," said Michael Walden, an economics professor at N.C. State University.

"Lack of health care facilities that lag population growth is a big source of concern for residents.

"I would expect big public pushback if new facilities were artificially limited to protect the financial returns of health care providers," Walden said.

Baptist-Novant dispute

With the two Triad community hospitals, Baptist and Novant gained a conditional certificate-of-need approval in 2008.

Both appealed the decision favoring their rival, with Novant ending its pursuit in March 2009. Baptist dropped its appeal in December 2009 as part of a settlement.

During a press conference announcing the settlement, the systems said they had reached "a mutually satisfying solution." 

Officials with both systems acknowledged it took the realities of legal expenses of more than $1 million a year, and the prospects of seven to 10 years of litigation and appeals, to persuade them to reach a compromise that allowed both hospitals to open in 2017.

"There were times when emotions ran high and some people thought litigation would be the only way to get to the finish line," Greg Beier, the president of acute-care services for Novant, said in December 2009.

"As we started the steps of litigation, we realized we were wasting resources that could be used to focus on the health-care needs of the communities."

Donny Lambeth, then-president of N.C. Baptist Hospital, said its officials eventually determined that there was a slim chance of its appeal of the Clemmons hospital being approved.

Atrium plans

Atrium's $53.8 million "satellite" hospital in the Steele Creek community is scheduled to open in the spring of 2024.

The hospital would create a C-section operating room and a procedure room.

Atrium has had health care facilities in the Steele Creek community of southwest Charlotte since 2010, including an emergency department with 13 examination rooms, a trauma room and eight fast-track rooms.

"We’ve spent a little more than a decade building a bond of trust in the Steele Creek community with our 24/7 emergency department at Atrium Health Steele Creek," Atrium said in a statement.

"We’re excited to be able to continue improving health and serving the area with the expertise of Atrium Health in additional ways."

However, it hasn't been an overall successful regulatory process for the systems' community hospital projects.

In May, regulators denied Atrium’s request to open a new hospital in the Lake Norman area of Mecklenburg.

Atrium had asked permission to relocate 18 acute-care beds and an operating room from Carolinas Medical Center and 12 acute-care beds and an operating room from its University City Medical Center.

Novant plans

Novant's Steele Creek community hospital would be its fifth in Mecklenburg County. The project cost is estimated at $178.59 million with an October 2025 opening date.

There would be 22 general-use beds, another six for post-delivery and four intensive-care beds within the 186,000-square-foot hospital at the southeast intersection of I-485 and Steele Creek Road.

The hospital also would feature 16 unlicensed observation beds, two operating rooms, an emergency department with 15 treatment rooms and one isolation room, one dedicated operating room for C-section deliveries, one procedure room and imaging services.

Regulators approved both hospital plans in part because of a projected 15% population growth rate in Mecklenburg County by 2028.

A Novant $154 million, 36-bed community hospital in the Ballantyne area was approved in 2019 and is under construction.

Novant said in its certificate-of-need application that the Steele Creek hospital would complete “a ring of community hospitals in Mecklenburg to improve access and choice.”

"We must ensure acute-care resources expand to reach our growing suburban populations," Saad Ehtisham, president of Presbyterian Medical Center in Charlotte, said in a statement in May. "Simply put, we must meet patients where they are.

“A hospital in southwest Mecklenburg County will make vital services more accessible and convenient for residents who may otherwise feel the care they need is out of reach.”

Novant's Wilmington presence

State health regulators also recently provided conditional approval of Novant's certificate-of-need request to add 35 acute-care beds to its New Hanover Regional Medical Center.

Novant branched out to a third major operational hub in North Carolina via completing on Feb. 1 its $5.3 billion acquisition of New Hanover Regional in Wilmington

Novant has been permitted to add 35 beds to the New Hanover hospital.

According to media reports in the Wilmington area, the New Hanover system announced plans for a $210 million, 66-bed community hospital in the Scotts Hill community near the Pender County line. If approved, that hospital could be opened in the fall of 2024.

Novant is southeastern North Carolina's dominant health care provider.

It also operates Brunswick Medical Center in the nearby town of Bolivia, where it opened a $100 million, 78-bed community hospital in July 2011.

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@rcraverWSJ

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