With a new $37 million cardiovascular center just opened at Wheaton Franciscan-All Saints, a new $87 million hospital just opened north of the Racine County border in Franklin, and a new $95 million cancer center opened on Monday at Froedtert Hospital in Milwaukee, the area may seem to be sprouting new hospitals like spring flowers.

And customers may fear that these shiny buildings with their woods, soft lighting, curving walls, and suburban-home atmosphere won't appear quite so pleasant on a bill. However, say local health care company leaders, the building spurt is being driven by the age of buildings and by technology, and they say that the industry trends driving the construction will result in a cost savings for patients.

Pushing Wheaton Franciscan is both population growth and population shift, said Richard Canter, the system's vice president of strategy and corporate affairs. "Obviously no where in southeastern Wisconsin are we in a significant population growth area compared to other part os the country." But the Franklin area is growing rapidly, and as more services shift to outpatient use because of its efficiency, demand will grow for that, he said.

Also factors are technological advances and state codes which are constantly revised, said Jon Flyte, Wheaton's vice president for facilities and construction. "The state doesn't prescribe equipment but it prescribes the environment that equipment operates in." That means requirements for more extensive power supplies for all the computers machines, backup power supplies, and requirements for air conditioning and ventilation to take away all the heat which those machines generate. All of those demand more than old buildings can be retrofitted to provide.

New machines also require different room sizes than those built for hospitals dating from the 1950s and '60s, he said. A spokesman for Aurora Health Care noted that until the early 2000s no new hospital had been built in Wisconsin in almost 50 years.

That spokesman also said that construction costs don't play that large a role in health care costs. What do, he wrote in an e-mail, is the lack of full government reimbursement of costs for Medicare and Medicaid patients, a shortage of workers and in particular a shortage of specialist physicians, and the need to treat people for problems such as smoking, diabetes, and obesity which are the result of lifestyle choices.

John Balzer, vice president of planning for Froedtert & Community Health, said he sees another factor driving construction, and that is the creation of more and more private rooms which have been shown to reduce the possibility of transmitting infections among patients. He, too, sees the spread of advanced technology as the other main driving force, and one which is pushing more care to outpatient use. In the mid-1980s, most medical campuses devoted about 10 percent of their space to outpatient services; now almost every campus is at 50 percent, he said, and ultimately that will be more cost-effective for patients.

Other views

HCTrends, an industry analysis firm begun by health care consultant The Benefit Services Group of Pewaukee, notes in its May newsletter that health care costs are higher in places where the number of hospital beds for every 1,000 people exceeds the national average. In southeastern Wisconsin the number of beds has been decreasing, the newsletter says, and it also notes that while Milwaukee County still is high because of its concentration of acute care hospitals, surrounding counties enjoy much lower ratios of hospital beds to residents.

When the federal Government Accountability Office studied the reasons for geographic variations in health care costs, it also noted that higher costs occurred in areas with a high percentage of hospital beds in the largest hospitals, and with less competition.

Froedtert's cancer center emphasizes outpatient visits, and the Franklin hospital has only inpatient beds.

A paper published two years ago in the journal Health Affairs raised some concerns about the hospital construction, which has been an industry feature nationwide for several years. Although there is some concern about hospital-acquired infections, the shift to private rooms largely reflects hospitals' desires to provide a service seen as a competitive business advantage, wrote Gloria Bazzoli and colleagues. She is a professor in the department of Health Administration at Virginia Commonwealth University and a senior consulting researcher at the Center for Studying Health System Change for which she did the research described in the paper.

What the eventual result of the construction cost will be is uncertain, Bazzoli's group wrote. Health plans, employers and health benefit consultants saw some potential advantages from increased capacity because it suggests lower prices through competition, yet there is also the risk of duplicating services and the temptation of hospitals to overuse facilities to cover their costs.

People living in growing areas will benefit from an increase in access and number of providers, especially in areas where there are no governmental controls on hospital construction, Bazzoli's group wrote. But people in lower-income areas will continue to be served by older hospitals with limited resources.

Balzer doesn't expect the new $95 million cancer center to have an effect on what patients see on their bills. Since the project projections were done in 2004, Froedtert's oncology services have grown by about half again what they were, yet inpatient charges have consistently been 24 to 30 percent below the metro Milwaukee average, he said.

Wheaton Franciscan officials said that the All Saints and Franklin projects won't cause an increase in charges to patients. Both projects, funded by bonds sold in 2006, were built into the overall cost base.

Wheaton Franciscan doesn't have any more large building projects coming, although like other hospitals officials there said they will continue to remodel. "The worst thing any hospital system can do," Canter said, "is allow its facilities to not keep up and then just like the upkeep of my home, you realize, now I've got my roof, my air conditioner to replace in one year."

Watching competitors

Both Balzer and Wheaton Franciscan officials said they didn't look closely at local competitors when designing their new facilities. Certainly they looked, said Canter, of Wheaton Franciscan, but the company's strategy is to support patients and the physicians who care for them. Balzer said the Froedtert group toured other national cancer centers such as M.D. Anderson in Houston. With no disrespect intended, he said, Aurora and Wheaton are not points of reference for Froedtert because they are not the same.

Froedtert, which opened its new cancer center in Milwaukee Monday, will be doing some research on the results of its designs, Balzer said. During the next 18 to 24 months, the hospital will look at how patient success varies based on how the treatment space is divided, how specialists are grouped, and how much difference ancillary support services make.

The treatment space is split into a day hospital which provides a greater amount of skilled care and is intended to reduce the need for inpatient stays.

There are social treatment areas which patients can request when they're feeling good and want to talk, private areas for patients who are not feeling well, and another space socially between those extremes.

In the new center, 13 subspecialist doctors will be grouped. They will now come to patients instead of the other way around, Balzer said.

Ancillary services will be provided in the quality of life center, and those services comprise many types of other supports - personal financial counseling, genetic counseling, nutritional help, and psychological and spiritual counseling.

"I think that's one of the mistakes that we've made in health care," Balzer said, "in that we're getting better at measuring clinical outcomes, but we're spending billions of dollars on real estate and all people are doing is saying, 'Look at our beautiful fireplace in the lobby. We've got the fanciest patient bedrooms, and we've got the nicest tile on the floor.' Well, hell, does it make a difference? And health care has to get better at justifying the billions they're spending as it relates to outcomes in patient care."

Wisconsin's on and off health care controls

It's been a few years since the state Legislature last took a stab at controlling health care costs. In 2002, researchers in the Legislative Reference Bureau prepared a summary of Wisconsin's various attempts at cost control. Here are some excerpts.

* In 1972, the Wisconsin Hospital Association and Blue Cross/Blue Shield of Wisconsin started a program in which health care providers and insurers voluntarily tried to control costs. In 1975 the Legislature directed the state administration to contract with the group to set hospital rates.

* In 1977, the Legislature required that entities building hospitals, or making major changes, first obtain a certificate of need, like the certificates which utilities must get before building new power plants. This requirement was repealed by the Legislature in 1983.

* In 1980 the Legislative Audit Bureau reported that the rate-setting program wasn't controlling costs. The Legislature responded with a law requiring both incentives and penalties for control, and this was replaced in 1983.

* In 1983 the Legislature created the Hospital Rate Setting Program with three commissioners who set charges for private-pay patients. The enabling legislation specified an automatic end to the commission in 1989, but the Legislature accelerated that timetable and the commission ended in August 1987.

* From 1991 to June 1993, the state required public hearings for some major health care construction projects. After that date hospitals and others had to obtain approval from the Cost Containment Commission before undertaking certain major building projects. The law limited the number of hospital beds in the state and applied a moratorium on construction. The law and commission were eliminated by the Legislature in 1995.