Both hospital systems have had on-again, off-again discussions over the years about merging to create a single children's hospital. Those talks fell apart again last year and the recent expansion announcements appear to further dash that possibility.
Children's Hospitals and Clinics of Minnesota says its expansion plans have been in the works for many years, but the project was put on hold during the merger talks with Fairview and the U of M.
Now that those talks have failed, it's essential to move forward with modernizing the system's two hospitals located in Minneapolis and St. Paul, says Children's CEO and president Dr. Alan Goldbloom .
He says Children's will start by putting every one of its 326 patient beds in private rooms. All of the rooms will have bathrooms and sleeping space for a parent.
"Private rooms for patients are no longer considered a luxury, they're actually considered a necessity in hospitals," says Goldbloom. "One of the biggest problems in North America is the infection rate that occurs in hospitals and private rooms are a great way to help control that."
Private rooms are also more efficient, according to Goldbloom. He says currently Children's spends a lot of staff time on moving kids from one room to the next as their medical condition changes.
Children's expansion project also creates all new operating rooms in both of its hospitals.
"Operating rooms today are being built to almost double the size that they were 30 years ago just to accommodate the technology and the people you need for very sophisticated procedures," he says
In addition, at its Minneapolis hospital, Children's plans to develop a new neo-natal intensive care unit and a new pediatric intensive care unit.
"I know the intention here is to have Minnesota have a basically a top 25 or top 20 children's hospital," says Stephen Parente, a health care economist at the University of Minnesota. "And to me spending this much money without coordination toward a goal to try and consolidate those resources is concerning."
Parente says he's disappointed that Children's and the Fairview-University Children's Hospital couldn't work out their differences. He says it doesn't make sense to have both hospital systems competing for the same limited pool of federal and private research dollars.
"This diminishes the money flow potentially that could be in the Twin cities by essentially kind of competing amongst ourselves rather than competing amongst other communities in the country," he says.
Parente cites Children's Hospital of Philadelphia as an example of well-coordinated expansion. Parente says in that city several pediatric hospitals combined their resources to form a major research-based hospital. As a result, the hospital has a reputation as a national center of excellence and he says grant money flows readily to Philadelphia.
But Parente hasn't given up on his hopes for a similar hospital merger in the Twin Cities. He thinks talks between Children's and Fairview-University could re-ignite, if either of the hospitals have a hard time raising enough capital to complete their expansion projects.
With the combined cost of the expansions approaching $500 million, philanthropists might balk, says Dave Durenberger, a former U.S. senator who chairs the National Institute of Health Policy at the University of St. Thomas.
"Now the conversation can begin because we know how much the total is and we can begin asking question about what are we going to get for our money and now the conversation begins and we will see where it goes," says Durenberger.
Children's Hospitals and Clinics of Minnesota says it hopes to break ground on its expansion project in Minneapolis later this year. Work on its St. Paul campus would start in a year to year-and-a-half. Officials at Fairview-University Children's Hospital say their facility is scheduled to open in 2010.