Doctors take on designing, operating their own hospitals

About 90 Houston physicians are collaborating with a health care development company to build and manage a full-service, acute care hospital and adjoining medical office building.

The $70 million development is yet another example of how physicians are ratcheting up their involvement in the health care infrastructure. What started as a smattering of doctor-owned ambulatory surgery centers and imaging facilities expanded in recent years to include specialty hospitals and investments in existing hospitals. Now doctors are adding project development to their lists.

"One of the things I've learned, as we've seen the proliferation of ambulatory surgery centers and freestanding imaging centers, is patients don't benefit as much from all the different locations," said Paul C. Cook, MD, a urologist in Houston and a physician partner in the project. "By consolidating all the locations, we're creating one-stop shopping. We've taken a very fragmented process and brought it together under one roof."

The physicians partnered with GP Medical Ventures, a health care development company based in Nashville, Tenn., to build the facility. It's scheduled to open in fall 2005 and will be named Houston Town & Country Hospital. The name was selected based on a patient survey.

It will house 105 beds and eight surgical suites, a full-service emergency department and ancillary services common to most acute care hospitals.

At the same time, other physicians are getting involved in another Houston development: a pair of acute care hospitals in the Midtown section of the city. About 75 physicians, many of whom have primary care backgrounds, have invested in the $174 million project.

The physician syndicate was organized by Quality Infusion Care Inc., a Houston-based company that provides ancillary hospital services such as laboratory work and pharmacy operations, and will do the same for the physician-owned project.

"They're seeing the potential to make a lot more money, and they're saying it's time," said Jim Rutherford, president of Quality Infusion Care. "They see hospitals are making a killing based on their referrals."

Town & Country Hospital and its attached medical office building will sit on a 26-acre site in a growing region of Houston. Some of the physicians will work out of the office building in which they will have an ownership interest.

The physician partners represent many separate groups and a wide range of specialties, though the mix does include about one-third primary care physicians, said Dr. Cook, who also holds an MBA.

"That's something we think is quite unique," he said. "Primary care physicians are a very important part of this project."

While they will be business partners in the project, the doctors do not plan to merge their practices into one large multispecialty group. Groups will still compete for patients, and many physicians will remain on staff at several different hospitals.

The convenience of having many of the partners together will not be forgotten, though. Dr. Cook said the groups are looking at other ways to integrate their practices to take advantage of their proximity to one another and the new hospital.

The convenience for patients -- not a frustration with the current health care landscape in Houston -- drove physicians to invest, Dr. Cook said.

"This will complement the current hospitals we're working with," he said. "This will not replace any of them."