A cure for growing pains

BURLINGTON -- On the Friday after Thanksgiving in 1980, the Lahey Clinic completed its move out of Kenmore Square and opened near Route 128, betting that its doctors could compete with Boston's teaching hospitals from their own hospital in the suburbs.

Twenty-five years later, Lahey Clinic has almost become too successful. It is literally overflowing with patients, so busy that its emergency room is often forced to turn away ambulances. According to a 2005 state survey, the occupancy rate of its 257 beds on a given day averaged 91 percent, compared to an industry standard of about 85 percent.

''Ninety-one percent occupancy means you are struggling to find beds," said Dr. David M. Barrett, the hospital's chief executive and a urologist.

To cure its growing pains, Lahey is midway through making $130 million worth of improvements including boosting the number of beds to 317, a 23 percent increase.

During a tour this week of 36 new single rooms on the sixth and seventh floors, Barrett peered out of a window and surveyed the other half of the construction project: a wing taking shape below that will feature 24 intensive care beds, five operating rooms, and expansive outpatient clinics for cancer and urology patients.

Lahey also is making efforts to cure its traffic woes by building a 1,200-space parking garage just steps from the main lobby entrance. The area is now frequently clogged with vehicles. All of the work is scheduled to be complete by early 2007.

''Lahey is taking a major step forward in its history," Barrett said.

Much of the new hospital space will help expand care for the most complicated -- and most lucrative -- medical cases, solidifying the hospital's position as the only academic medical center offering tertiary care in the Boston suburbs. Lahey serves as a Tufts University School of Medicine teaching hospital, and some of its doctors also are affiliated with the medical schools at Boston University and Harvard University.

The additional intensive care rooms also will help it reduce the time its emergency room is in ''diversion" mode, when its emergency room must instruct ambulance crews to take patients to other hospitals because Lahey is full. ''Intensive care beds are one of those bottlenecks," said Barrett.

Diversion is a problem at many state hospitals. But Lahey has frequently topped the state's list of emergency rooms most often on diversion because some other community hospitals in the northern suburbs have closed, leaving fewer options for emergency care in the area. Also, Lahey handles large numbers of seriously ill people who occupy intensive care beds, hospital officials said.

In 2004, Lahey's emergency room was closed to new arrivals for the equivalent of seven days per month. In 2005, the hospital has managed to shrink that to about five full days a month, said Jeffrey P. Doran, Lahey's senior vice president.

''We typically experience higher-than-average diversion rates here at Lahey," he said. ''It's not a list we want to be first on. We feel as deeply concerned as everyone else in the community. We're not in the business of turning people away."

A group of Boston physicians founded Lahey in 1923, but it did not have a major hospital building until the move to Burlington. It experimented with a merger with Mary Hitchcock Memorial Hospital in Hanover, N.H., in the 1990s, but that marriage failed after just two years.

Over the last five years, Lahey has established itself as an independent powerhouse. It finished 2004 with $18.7 million in profit and is expected to show an $18.5 million profit for the 2005 fiscal year that ended Sept. 30.

The hospital's key strength, say academics who study healthcare, is that it's owned by member physicians who have a stake in its success and can collaborate closely and easily on patient care. The same type of system is in place at the Mayo Clinic in Rochester, Minn., probably the best-known physician group practice. Another well-known physician-owned hospital is the Cleveland Clinic.

''It's an organization essentially run by physicians. They are the bosses. They set their own policies. And they decide what their salaries should be," said Dr. Arnold Relman, a Harvard Medical School professor and former editor of the New England Journal of Medicine. The system has built-in efficiencies, because doctors can easily confer to discuss a patient's treatment, he said.

''The way they organize their practice is going to become the model that more and more doctors and hospitals are going to follow in the future," Relman said.

There are other large physician groups competing for business in Massachusetts, but they do not own hospitals. Partners Community Healthcare, which is affiliated with Partners HealthCare hospitals including Massachusetts General and Brigham and Women's Hospital, has 1,000 internists and 3,500 specialists and is the state's largest physicians group by far.

Harvard Vanguard Medical Associates has grown rapidly and now counts more than 700 doctors in a broad affiliated network called HealthOne Care System. And Tufts-New England Medical Center is building a physicians group called the New England Quality Care Alliance, which so far has 230 physicians.

A former chief executive at Lahey, John Libertino, told The Wall Street Journal in 1999 that he preferred working at Lahey to Harvard-affiliated hospitals like Massachusetts General because ''downtown is a sinking ship."

Predictions of a sinking may have been premature. Lahey is still dwarfed in size by the highly profitable Massachusetts General Hospital with 897 beds, Brigham and Women's with 638 beds, Beth Israel Deaconess Medical Center with 503 beds, and Boston Medical Center with 501 beds. (Lahey spokeswoman Rose Lewis says Libertino's 1999 quote ''doesn't reflect the current situation. We respect our downtown colleagues.")

Lahey is closer in size to two smaller Boston teaching hospitals, Tufts-New England Medical Center with 283 beds, and Caritas St. Elizabeth's Medical Center with 311.

Yet its books have been stronger over the last four years than those institutions. And it is stronger than most community hospitals, said Alan Sager, professor of healthcare finance at BU's School of Public Health.

''Lahey is uniquely positioned, because it has so many high-quality physicians," he said. ''It's position is very different from that of the dozens of community hospitals that have closed throughout the state."

Christopher Rowland can be reached at crowland@globe.com.