In the Kansas City area, hospital networks are deploying different strategies to expand their emergency footprint. Saint Luke’s Health System recently confirmed plans to open a new micro-hospital near the BluHawk development in Overland Park, just across from an emergency department Shawnee Mission Health opened in February.

“It’s designed for quick service. Our goal is to have you in and out of the hospital, or in a hospital bed, in 45 minutes,” said Bob Bonney, senior vice president of nonacute services and business development for Saint Luke’s. “The staff themselves like the facility. It’s laid out well, very responsive to the patient.”

With micro-hospitals popping up in several states — Colorado, Texas and Indiana — Kansas is seeing its fair share of proposals. The seven- or eight-bed emergency rooms are staffed by board-certified emergency physicians and include radiology and pharmacy services as part of a one-stop shop.

To date, Saint Luke’s has confirmed plans for four of the tiny facilities throughout Johnson County, including another Overland Park micro-hospital and one each in Leawood and Roeland Park. Bonney said the hospital network was evaluating other locations on the Kansas side but did not have plans to expand across the state line.

“Missouri is a certificate-of-need state, which is very difficult to navigate, so our focus is on the Kansas side,” he said of the regulation that requires medical facilities to prove a public need and get approval before starting a new project. “You want to be in areas with growth, that are populated enough to support these facilities. We also want to be in the areas where our patients are.”

Why go micro?

The micro-hospital model is less expensive to build than a traditional hospital, and it could help systems manage patients more effectively. The hospitals cost $7 million to $30 million to build and have small overhead, said Richard Bonnin, communications director for Emerus, a Texas-based micro-hospital operator. Most range between 15,000 and 50,000 square feet, with a few inpatient beds.

“Our micro-hospitals are an innovative way to bring new service offerings to smaller markets where it does not make sense to open a full-service hospital, but where there is a need for more intensive service offerings locally than can be found at a traditional urgent care center,” Bonnin wrote in an email.

For patients and insurers, though, the bottom line would be about the same: No matter the location, an ER visit is billed as such.

“With a freestanding ER, you’re receiving emergency-level care, so the cost is typically the same,” said Robin Harrold, Shawnee Mission Health’s vice president of ambulatory network. “Sometimes, the waits are different at an established location versus a newer location.”

Both Harrold and Bonney said most patients who use these facilities walk in, rather than being transported by ambulance. In some cases, a patient with the most severe injuries might be stabilized before being transported to a trauma center.

Saint Luke’s also could turn that model on its head. Bonney said healthier patients at busy ERs could be transferred to one of the satellite locations, for a shorter wait time.

“If the patient is not as intensely sick, they could be transferred to one of these community hospitals, freeing up a bed for patients who otherwise would need to be in the hospital in a more intense environment,” he said. “Therefore we could allocate our resources more appropriately.”

If you build it …

Saint Luke’s isn’t alone in its quest to expand emergency care. HCA Midwest Health has two freestanding ERs, in Shawnee and Olathe, and Shawnee Mission Health now has two satellite campuses, in Lenexa and Overland Park.

The market is saturated with providers; according to data from the Centers for Medicare and Medicaid Services, Johnson County was in the top 25 percent for ambulance providers as of June, with an average of 379 users per provider.

But Bonney said the proximity to other hospitals isn’t a drawback. In other states, networks open micro-hospitals across the street.

“I’m aware of a health system that put one of these a mile away from their main hospital to depressurize their main ER,” Bonney said.

Despite the wealth of options, Harrold said more patients were filling Shawnee Mission Health’s emergency rooms.

“With the proliferation of freestanding emergency departments, we haven’t seen our ER volume go down,” she said. “We’ve seen growth in both locations.”

In 2016, Harrold added, Shawnee Mission Health saw an increase in ER visits between its main hospital, Shawnee Mission Medical Center, and its Prairie Star location.

“The community is getting to know us,” she said. “It’s a distance from our main campus so it allows us to expand geographically.”

The Prairie Star model also is unique in that it houses primary-care physicians and other clinical specialists across from the ER. This allows for a one-stop shop for lab work, primary care and emergency services.

“All of the health systems are looking for access points,” Harrold said. “Co-locating physicians, that’s a model most of us have shown some interest in. You’ll continue to see that kind of thing grow.”

Originally published in the Kansas City Business Journal, March 9, 2017

Teva Neuroscience Inc. found a new tenant for its $46 million headquarters in Overland Park.

The pharmaceutical giant, which is consolidating its U.S. workforce in a planned New Jersey headquarters, will sublease the 156,000-square-foot building at 11100 Nall Ave. to its neighbor, Netsmart Technologies Inc. On Monday, the Overland Park Finance, Administration and Economic Development Committee approved Netsmart as a tenant.

Netsmart CEO Mike Valentine told the Kansas City Business Journal that the move was driven primarily by the company’s growth; it plans to add more than 400 employees in the next five years. Since Netsmart first moved to the Kansas City area in 2011, its local employment has grown from 10 to 660, according to documents submitted to the city.

“We’ve had a great year relative to growing into the new markets that we’ve entered in the last couple of years — in-home care, long-term care and software platforms,” Valentine said. “Our part of health care is digitizing more and more. The rules (providers) have to play by to get paid are more and more complex. … Generally, as the business has grown, we’re filling up the ranks.”

As the staff began to run out of space, Valentine said company leaders began to assess their options, including the possibility of building. Then they saw an opportunity in Teva Pharmaceutical Industries Ltd. (NYSE: TEVA).

“The option of moving in just down the street came up six or seven months ago,” Valentine said.

Netsmart plans to move in starting next year, when it will occupy the fourth floor and part of the first. In 2020, Netsmart will fill the entire building and will be responsible for Teva’s lease through 2028. The deal will bring the number of buildings Netsmart occupies in the College Boulevard area to five. Best of all, Valentine can see the new building from his current office.

“We’re excited about staying within the same local, walk-down-the-street type of feel,” he said. “Our long view is to continue to do what we’re doing. If we can find space that’s close and convenient, that allows us to contribute to building out the campus.”

Netsmart still is narrowing down the details of how the building will be used, Valentine said, but it will host a second client briefing center to showcase the health IT company’s technology.

At full capacity, Valentine expects the building will host 400 to 450 employees. The space has two other tenants: the remainder of Teva’s Overland Park staff and employees Teva outsourced to Florida-based AssistRx Inc. Valentine said the current tenants would begin to transition out of the building next year.

Teva employs between 100 and 125 employees in the facility, company spokeswoman Doris Saltkill wrote in an email. Both Teva and AssistRx’s employees will move to a facility at 4500 W. 107th St., where the companies have a sublease agreement.

“The moves are all coordinated to ensure continuity of business for the companies,” Saltkill added.

Teva reported 388 local employees in 2017, but since then it has cut 57 jobs and rebadged 200 employees in a sale of its patient services and solutions segment to AssistRx.

The Israel-based pharmaceutical company began shedding employees after it announced that it would cut about a quarter of its global workforce. Teva received $10.6 million in local incentives and $30 million in state incentives to build the Class A office building in 2013.

If its local employment falls below 200, Teva is subject to pay back a portion of the tax breaks it received from Overland Park. Per the terms of its lease, Netsmart will likely step into the same requirements as Teva.

Originally published in the Kansas City Business Journal, Sept. 18, 2018

Virgin Mobile USA cut nearly two-thirds of its staff this spring and will let go of most of the remaining staff this summer, sources familiar with the matter told the Kansas City Business Journal.

Virgin Mobile cut roughly one third of its total staff in March and transferred another third of its staff to Boost Mobile, Sprint’s other prepaid brand. The majority of the affected positions at that time consisted of marketing positions, which accounted for a large portion of Virgin Mobile’s business.   

Most of the remaining employees — roughly 20 — were informed about two weeks ago that their positions would be cut, sources said. The affected positions included developers and customer care.

These reports match movement from several former Virgin Mobile staff members on LinkedIn, many of whom reported departing the company in December or this spring. Of 13 former Virgin Mobile employees that recently left the company, five currently work for Boost and the remainder work for other companies. Most of them held marketing, digital and customer experience positions.  

Sprint did not confirm how many employees were cut, but a company spokeswoman wrote in an emailed statement that the company “is continually looking at areas of the business to ensure they are operating as efficiently as possible.”

“Virgin Mobile USA is an important part of Sprint’s prepaid business. Uniting the brand back under the Sprint Prepaid umbrella will create a more efficient environment, positioning the brand for continued success,” she added.

The cuts came just a year after Virgin Mobile announced its relaunch. The company moved into One Kansas City Place in January 2017, with the potential to receive up to $1.87 million through the Missouri Works program if it created 84 jobs in five years. As of October, the company had roughly 70 employees, and had finished renovating its new headquarters office by August 2017.

According to Sprint’s most recent annual report, the relaunch didn’t work.

In fiscal year 2017, Sprint (NYSE: S) added 363,000 prepaid subscribers, but those additions “were primarily due to growth in subscribers in the Boost Mobile prepaid brand, partially offset by subscriber losses in the Virgin Mobile prepaid brand due to continued competitive pressures in the market.”

A little over a year ago, Virgin Mobile announced its relaunch, after it had faded into obscurity. That plan relied heavily on Apple Inc., by launching Virgin as an iPhone-exclusive brand that ultimately would require customers to pay for their smartphones upfront instead of providing a subsidized service. The concern, according to analysts, was that by being an iPhone-only carrier, Virgin customers would have fewer low-cost options.

At the time of the launch, Wave7 Research Founder Jeffrey Moore wrote in an email that one major problem with the launch is that phone prices started at $279, while “prepaid customers are generally focused on devices of less than $100.”

Although Virgin Mobile has begun offering used devices at lower price points, it generally remains pricier than Boost Mobile.

Unlike Boost, Virgin Mobile didn’t build any physical storefronts, but distributed its products online, through Best Buy, Walmart, Target and Apple stores. However, Virgin Mobile couldn’t rely too heavily on the latter, as most Apple store employees won’t recommend one carrier over another.

Virgin Mobile was pulled from Target stores in early June, according to Wave7.

It’s unclear what happens to the Virgin Brand at the point. Moore said the brand still had a presence at most Walmart stores and some Best Buy locations. It also has been updated to offer the newest set of iPhones. But in the long term, it’s possible that Virgin could be wrapped into Boost or another company if Sprint merges with T-Mobile US Inc. (Nasdaq: TMUS).

Originally published in the Kansas City Business Journal on July 10, 2018