MERIDIAN — From their hillside perch, all three hospitals provide a scenic overlook of downtown Meridian. The anthill type activity surrounding them is probably the area’s largest economic impact.
Obviously it’s unusual for a city of 40,000 to have three major hospitals. Wallace Strickland, president/CEO of Rush Health Systems, points out, “Not only that. It’s probably unique given the fact we’re within two blocks of each other.”
In addition to Rush Foundation Hospital that Strickland oversees, there’s also Jeff Anderson Regional Medical Center and Riley Hospital. The trio have a total of 657 beds and are staffed by approximately 360 doctors. And their total payroll is estimated to exceed $90 million exclusive of those doctors. They all agree that the trade territory from which they draw is around 300,000 people. Economic impact indeed!
How they compete
The high profile — both figuratively and literally — of the three facilities can lead to withering competition. The most recent example is Riley’s installation of a 40-bed long-term acute care facility scheduled to begin operation in January by Regency Hospital of Atlanta. Rush Health Systems already has a similar facility and is appealing the State Health Department’s approval of the certificate of need.
Rush’s Strickland says that their acute-care operation averages only 34 patients in their 49 beds, so he doesn’t see how another similar operation can be justified. Steve Nichols, the CEO of Riley Hospital, counters, “When the numbers were done, there was actually a need for 100 beds in the area and the (Rush and Riley) medical staffs don’t get along. This is more cost effective and a year from now, I predict that both facilities will be running at 75% capacity.”
That tiff was preceded by another recently resolved long-term legal battle. That time, Rush was victorious when they were certificated for an open-heart facility that Anderson contested as unnecessary and a duplicate of their capabilities.
Advertising is another point of contention. Anderson’s TV and radio ads, e.g., “Health Tips,” are regulars on the local scene, but Mark McPhail, Anderson’s CEO, says his advertising budget is low when compared with Rush’s. And he’s right — Rush dominates both local radio and TV airwaves.
“Sure, we intend to influence a potential patient’s decision, but our ads are also meant to educate people which we see as one of our missions,” Strickland said. “We may not have been the first, but we’re the ones who really started the advertising you see today.”
McPhail and Nichols both make the point that the best advertising is word-of-mouth. McPhail puts it this way: “We feel that satisfied customers, families of patients and physicians, and satisfied employees are worth a lot more than advertising dollars.”
In response to local complaints that duplicate facilities — and the heated competition — only add to medical costs, all three CEOs contend that, as in any business, the competition is beneficial to the consumer. Nichols says, “If you have only one hospital, things can get lax, but all of us really have to strive to give our best at the lowest cost.”
History and the CEOs
All three hospitals were begun by physician families for whom they are named. Rush was the first in 1915 and boasts two descendant physicians still on the staff while Anderson — started in 1928 — still has one family physician on staff. The Riley family founded theirs in 1930, but sold their facility to Health Management Associates of Naples, Fla., in 1998.
The three CEOs also have much in common, including a Southern drawl. McPhail has hardly left Lauderdale County except to obtain his business degree at the University of Southern Mississippi. Strickland is a native of nearby Decatur and a Mississippi State graduate with a master’s from Alabama. Both started in the business office of their institutions in the early 70’s — Strickland at the bottom rung as a collection agent.
Nichols is a native of Selmer, Tenn., just across the line from Mississippi and is a devout Ole Miss fan. He graduated in pharmacy in 1975 and moved around the South in hospital administration before landing in Meridian two years ago. He likes the signs of recent cooperation between the three rivals.
That cooperation is best exemplified by the joint financial and equipment support given to the expansion of Meridian Community College’s registered nurse and allied health personnel program. “There have only been 140 RN graduates annually and there will soon be 190 graduates,” McPhail said. “Then X-ray technician graduates will increase from 15 to 30 and a new operating room technician program will have 15 graduates annually. All of them will be grabbed up real quickly.”
Then there’s the Meridian Regional Medical Support Center run by a board representing the three hospitals. It began with one magnetic resonating imaging (MRI) machine and now has three of the very expensive pieces of equipment. “That’s been a very positive experience,” according to McPhail.
The era of specialization has come to all three hospitals. Riley’s acute-care contract with Regency and a contract with National Healing Corporation to care for chronic wounds are prime examples. “It’s hard to be the best at everything,” Nichols said, “So we contract rather than try to duplicate top-notch care.”
Rush has various groups as part of their system including pain treatment, rehabilitation, women’s care, acute-care, sports medicine and workforce wellness. Anderson divides their specialties by having separate floors and departments including a popular fitness center.
Expansions of facilities have become part of life for all three institutions. Anderson will complete a $10-million cancer clinic in May that’s already treating patients. In addition, there’s a million-dollar sleep disorder center (the biggest in the state) under construction.
Rush will soon undertake an $8 million three floor renovation of their women’s services area. Nichols said although there are no major expansions planned, “Certain areas will grow, including our OB and GYN departments.”
Perhaps Strickland had the best perspective of all the competition and cooperation. “I’d rather have patients go to an in-town hospital,” he observed. “That way, I have a chance to get them to us, but if they go to Birmingham or Jackson, I’ve lost them.”
Contact MBJ contributing writer Bill Johnson Jr. at firstname.lastname@example.org.