Nashville's indigent population is relatively finite, according to Dr. Joseph Webb.
What's infinite is the number of people who can afford to pay for health care services — and the Nashville General Hospital CEO wants to attract more paying customers through the doors of his facility, while still caring for those who can't afford it.
That's one of the driving factors in the hospital's decision to look for a place to build new home, after more than 25 years on the campus of Meharry Medical College.
Nashville General is working through the construction and planning process with Nashville-based project management firm Capital Project Solutions, which gave a preliminary presentation on the project in May at a Metro Hospital Authority Board meeting. The hospital is eyeing a 77-acre site at 720 Mainstream Drive near Ted Rhodes Golf Course for the new hospital.
Nashville General generated more than $111 million of revenue in 2020, according to Nashville Business Journal research, making the facility one of Middle Tennessee’s 20 largest hospitals.
We recently sat down with Webb to learn why building a new hospital makes more sense than renovating its current space and what features he would like to see in the new facility.
Why did Nashville General decide it was time to leave its current location? This hospital was built in 1973. In 1997 it had some renovation done to it and Nashville General moved here after [the previous hospital] closed. In 2027, it will have been 30 years and that’s the length of the lease. We know that we have to be proactive. We did our due diligence in looking at the building, the economic situation and the physical plant to determine what would be the most feasible direction for the city to go with its hospital. Would it be to remain here and put major funds into renovating this building, which it badly needs because it it way out of date, [or build a new hospital somewhere else]? The board decided it makes more sense to build new than to try to bring this facility up to date.
Are you still looking at 720 Mainstream Drive as the potential new location? The criteria that we used was that the land be owned by the city, thereby being able to eliminate that cost. That property is owned by the city and it is good proximity to bus lines, transportation and access to the Davidson County population. We like that property for that reason. Nothing definitive has been decided.
Is there a timeline to make that decision? We are in the process of seeking out the key decision-makers, gathering information … and putting it all together. … [T]ransfer of the land is part of it. We have targeted through November to have a lot of our preliminary work behind us. By the end of November, we should have all these pieces so we can start moving forward with some execution.
What features are important to you in a new building? We are going to need some behavioral health space. We will remain at 150 [total] beds, we won’t increase that. We probably need to look at something that’s more state-of-the-art with our forensic services.
There are a lot of things about a state-of-the-art hospital that can improve the efficiencies of operations, save the city dollars and help to enhance the care so that it grows and generates more revenues to offset what the taxpayers have to cover. Contrary to what people believe, taxpayers now do not cover the entire cost of care for the patients here at Nashville General. It only covers around 40% to 45% but that is because we do care for a large number of patients who are indigent. But we also collect a good amount of revenues, as well, and we’ve grown that number. …We are going to continue to grow that number by providing more services to more individuals who are paying, while continuing to care for those who cannot pay.
What people don’t understand is that the number of people who are indigent is almost a finite number. It’s the number that can pay that is infinite.
Do you have estimates of what building a new hospital would cost and how that compares to renovating the existing building? What we were able to do was look at what it would cost to continue to be [at the existing location] in the way of leasing. We lease now. What we began leasing this building for 25 or so years ago [would quadruple]. The property value has quadrupled, so we would not be able to lease this building for the same price.
After the 30-year lease of a new building, that building is owned by the city. In the current situation, after 30 years of leasing and putting the capital into it to renovate it, the building goes back to the private owner, that being Meharry. That’s a major driving point.
We have financiers that are interested in financing this project. I couldn’t tell you exactly what that’s going to cost, but these are people that have, in most cases, financed hospital buildings before, so they have a pretty good idea. There are some ratios of what it costs per bed to build and we’re looking at a 150-bed base hospital. So, that’s pretty easy math for people that deal in that, but I won’t throw any numbers out there, because I don’t won’t to mislead anybody. I have a pretty good idea.
We did a deep dive into the expenses we incur compared to what we would be insuring in the future if we build. What we saw was that was a compelling case to move forward with a new building.
Gross patient revenue
| Rank | Prior Rank | Name/Address/Phone/URL |
|---|---|---|
1 | 1 | Vanderbilt University Medical Center and Monroe Carell Jr. Children's Hospital at Vanderbilt |
2 | 2 | TriStar Centennial Medical Center |
3 | 4 | TriStar Skyline Medical Center |
How was Nashville General able to navigate the pandemic? The CARES Act helped everybody, in all industries. We were hit hard in being able to secure staff and nurses, as were hospitals across the country, because of the increase in need for intensive care as a result of the respiratory impact that was caused by Covid. Then, having nurses go into traveling jobs, where they traveled to different areas that needed nurses and they were paid exponentially compared to what they would normally earn. No one can fault them for that, but it really did have an impact on hospital operations, as did pharmaceuticals, which [prices] went through the roof. So, when you have nursing staff [shortages] and you also incur overtime costs, everything that could possibly drive up in cost did. Hospitals’ operating margins got really thin. Those that didn’t have margins, God only knows what happened to them. But [the pandemic] certainly did exasperate hospital operations and took us further in a direction that we don’t normally like to go in health care.
Health inequities always existed but the pandemic shown a light on those gaps like never before. How is Nashville General working to combat those inequities? One area is our Food Pharmacy. Early in my career in the Memphis area, I had the opportunity to serve on the board of directors for a food bank. … I always felt we should, rather than distributing food to individuals just so that they would have something to put in their bellies, we should distribute food to people that was more nourishing to their bodies. In other words, if you’re hypertensive, you don’t need to get a bunch of high sodium content and heavy starch laden foods into your body. If you’re diabetic, same thing. There are certain foods you don’t need to eat because its going to exasperate your condition. The Food Pharmacy was created at Nashville General Hospital to address just that.
