UHS reapplies for 100-bed Portland-area psychiatric hospital, 2 years after rejection

Portland Business Journal – July 13, 2019

READ – Universal Health Services wants a new hospital in Oregon – ARCHIVE

Two years after Oregon health officials rejected its application to build a controversial 100-bed psychiatric hospital south of Portland, Universal Health Services Inc. is trying again.

UHS (NYSE: UHS) earlier this week re-applied with the Oregon Health Authority to build its proposed $35.8 million Willamette Valley Behavioral Health Project.

“Our hope is that a decision is made on the merits of the project and an accurate analysis of the real need, rather than allowing politics to influence the outcome,” said Project Director Ron Escarda.

UHS, the largest psychiatric hospital chain in the U.S. with 300 hospitals, had served notice in August 2017 that it planned to file an antitrust lawsuit, after OHA denied its application.

OHA had concluded UHS had not demonstrated that another inpatient facility was needed in the region. Portland hospital systems, including the newly opened Unity Center for Behavioral Health, staunchly opposed the project, arguing there was a surplus of mental health beds and the new facility would divert limited resources away from more cost-effective, community-based treatment models.

UHS and OHA have undergone two separate attempts at mediation, the most recent at the end of last year, Escarda said.

He said OHA gave him “a lot of good feedback” about how to enhance its application. The outlines are similar: a 100-bed, freestanding psychiatric facility with two adult units, one general and one for substance abuse, a geriatric psych unit and 16 adolescent beds. After the facility is up and running, UHS plans to build out its outpatient mental health programs at the site, Escarda said.

“We really focused in our application on identifying the reasons why a reconsideration is important,” Escarda said. “We really believe the community desperately needs not just these beds, but these and additional capacity. We think the Portland area is under-bedded, especially for adults.”

The Oregon State Hospital has recently suffered from a capacity crisis, with dozens of people waiting for admission, driven by an escalating number of “aid and assist” orders from local courts.

The Unity Center dealt with patient and staff safety issues last year that nearly cost it the ability to receive reimbursement from Medicare and Medicaid. Transfers to UHS’ Cedar Hills Hospital from Unity Center have tripled, Escarda said.

“We really think it makes a strong case for why there’s a need for a project like ours and other investments in mental health services in the Portland metro market,” he said.

The company must start from scratch with a new Certificate of Need review, which includes public comment. Escarda said he has reached out to area providers.

“We’re hoping to not get the same level of resistance,” he said.