Doctors Hospital South prepares to open doors in Nixa

by Jill Henry

SBJ Reporter

jhenry@sbj.net

Springfield's Doctors Hospital will soon provide services to Christian County at a new facility, Doctors Hospital South. The 8,770-square-foot clinic will be located in the new Crimson Plaza at 105 Ridgecrest, Suites 1 and 2, in Nixa.

Bill Campbell, DO, a physician affiliated with Doctors Hospital, partnered with builder Steve Eoff to form Crimson Plaza LLC to build Crimson Plaza on four of the 38 acres at the site. Campbell said he and Eoff purchased the land for $550,000. "It's been several years we've been sitting on the land," he said.

Doctors Hospital will lease the space and will pay for the infill at Crimson Plaza. Campbell said he hopes to be in the facility by Sept. 1.

"The original concept was I was going to move my office, which has been located in Nixa for 20 years to anchor (Crimson Plaza)," Campbell said. "I was going to try to bring in complementary disciplines into the clinic setting and have the pharmacy and hopefully physical therapy, and maybe dentistry, optometry and massage therapy.

"Originally, (the individual providers) were going to own this and build the building, but when you try and get that many people scheduled to go at the same time, it just didn't come to fruition," Campbell said. "Steve (Eoff) and I said, We've got the land, the time's right, we think the corridor between Nixa and Ozark is good commercial property.' So we just went out and borrowed the money and he and I built the building."

Campbell said the first phase of construction will total about $1.9 million. "The ultimate total square footage will be 40,000," Campbell said. "The first phase that we've got so far is about 22,000 square feet."

According to the Nixa Planning and Zoning Department, the estimated value of improvements and infill for the 8,770 square feet to be occupied by Doctors Hospital is $219,250.

Paul Taylor, administrator and CEO of Doctors Hospital, said the hospital will have six providers based at Doctors Hospital South. Providers are Campbell, Marsha Taylor, MD, Randall Halley, DO, Lester Condiff, MD, and nurse practitioners Annie Lee and Janice Jones.

"There are 18 exam rooms. And there will be an X-ray there. It's going to be a pretty large multiphysician clinic," Taylor said, adding that Doctors Hospital plans to finish and occupy another 8,000 square feet at Crimson Plaza by the end of the year. The space will be used for additional physicians and services.

In addition to Doctors Hospital South, Family Pharmacy and Cruisin' USA Frozen Custard have signed on as tenants at Crimson Plaza.

Growing hospital

Doctors Hospital had 65 employees when Taylor took the reins as CEO in June 2000. "We now have 400 employees, and we're going to be adding 20 to 25 new jobs in the Nixa area," he said, adding that there are more than 70 physicians on staff. "But if you look at the number that actively support the place, very few of our doctors are solely on staff here. Most of them are on staff here and elsewhere. But there's a group of about 35 physicians that are pretty active in using Doctors Hospital."

The 100,000-square-foot facility, opened in December 1999, sits on 22 acres located at 2828 N. National. It is a sub chapter S corporation owned by 22 individual shareholders, 21 of whom are physicians, Taylor said. According to the facility's 2004 annual registration report on file with the Missouri Secretary of State, the hospital's board of directors includes Taylor, Campbell, Arthur J. Cohn, James Godard, Charles Cantrell, C. Kevin Watt and William Lewis McKay.

Taylor said the decision to create Doctors Hospital South was motivated by desire to fill a need.

"We believe that the Medicaid/Medicare population in that area sometimes has trouble getting access to primary care physicians," he said. "That's what we do and we will do it down there. (The decision was) also a product of the fact that we had a bit of serendipity and just happened to have some physicians who were looking at relocating their practice."

The payment mix at Doctors Hospital is made up of 40 percent Medicaid, 40 percent Medicare, 15 percent commercial insurance and workers' comp, and 5 percent self-pay, Taylor said.

A smaller building project is under way at Doctors Hospital as well.

The Springfield project, Taylor said, is less than 5,000 square feet. "We are expanding our outpatient surgery department. We're adding on to the hospital to increase the number of recovery rooms available to us."

Taylor declined to disclose costs associated with the Springfield expansion. The architect for the project is Joplin-based Patterson Latimer Jones Brannon Denham Inc.

An addition of approximately 30,000 square feet to the Springfield facility also is being considered.

"We're looking at relocating and expanding our resolutions unit, which is an inpatient geriatric psych unit, among other things. We need to build a new emergency department. We run an urgent care clinic through our ER and it's experienced quite a bit of growth, so we're looking to relocate and expand that as well," Taylor said, adding that the project, if it happens, would be in late spring of 2005.

Hybrid employment plan

Campbell said the hospital acts as a provider-based clinic, receiving a facility fee for Medicaid and Medicare patients to offset the low reimbursement physicians normally receive from the state.

"The physicians aren't employees in the sense that they have noncompetes, they have to show up and see this many patients a day and have this much vacation time. It's more of an independent contractor arrangement where you see these patients (and) this is reimbursement for the service. But the hospital is billing the service like an employer would. It's a hybrid. It's not employment. It's not exactly independent practice, either, because the hospital takes a risk. They're hiring employees and infilling the space. It's their facility," Campbell said.

With this type of model, Campbell said, an "organization value" is established, resulting in a higher chance of the physician using Doctors Hospital if patients need inpatient care or further testing.

"The hospital, as a provider-based clinic, will contract with the physicians to see patients in their clinic," Campbell said. " The people that work in the clinic setting are all going to be in Doctors Hospital's facility."

Rebounding from bankruptcy

The growth of Doctors Hospital comes after filing for reorganization under Chapter 11 of the bankruptcy code in August 2002. The hospital, which at that time had 19 physician-owners, had more than $8 million in secured and unsecured debt, according to the bankruptcy filing $2.2 million in tax debt, $4.8 million in secured claims and $1.1 million in unsecured claims.

"We entered into plan where we paid 100 percent to all of the creditors," Taylor said. "We restructured some long-term debt, agreed to pay 100 percent even to the unsecured creditors and had the plan confirmed and approved, and we've been outside of the chapter 11 bankruptcy for quite some time."

Taylor said the hospital's future plans include an employee stock ownership plan for employees and possibly more construction.

"We're in the initial stages of developing an ESOP for our employees here. The intent would be for the employees of Doctors Hospital to own 30 percent, give or take. That's a good working number somewhere between 30 percent and 40 percent of the hospital will be owned by the employees," Taylor said.

Taylor estimates "March or April of 2005 as far as when a transaction actually occurs. There's a lot of work to do, with drafting a plan, filing the plan, getting approval from the IRS."