Two of Chattanooga's biggest hospitals are teaming up to develop an outpatient surgery center in the growing Ooltewah area to help shift more patients from inpatient hospital care to less expensive ambulatory surgical treatment centers.
Parkridge Medical Center, which is owned by the Nashville-based HCA hospital chain, bought a former U.S. Xpress office building on 38 acres along Jenkins Road near Interstate 75 last week for $36 million, according to property records filed with the Hamilton County Register of Deeds.
A subsidiary of HCA's Parkridge filed an application Thursday with state regulators to work with local physicians and Erlanger hospital to convert the 55,000-square-foot office that formerly housed U.S. Xpress and Transcard into an outpatient surgery center and medical office building.
In a request filed with the Tennessee Health Facilities Commission, a Parkridge-owned venture known as Chattanooga East Surgicenter LLC asked state regulators to certify there's a need for a $23.2 million outpatient surgery facility with five operating rooms and four procedure rooms to provide a range of surgeries, including orthopedic, plastic, gynecological, ear, nose and throat, endoscopy, and urology procedures.
If the proposed certificate is granted, Erlanger proposes to buy 49% of Chattanooga East Surgicenter, and physicians would buy another 49% of the company. Parkridge will continue to own the undeveloped property around the proposed outpatient surgery center for potential future development near Exit 7 on Interstate 75, directly across the street from the headquarters of U.S. Xpress.
"Parkridge Health wants to grow as the community grows," Jamie Lawson, director of marketing and public relations at Parkridge, said in a statement Tuesday.
The new medical complex will "facilitate the shift of outpatient surgery from the hospital-based environment to the more cost-effective and convenient ambulatory surgical treatment center environment and improve efficiencies for patients, surgeons and local hospitals," Chattanooga East Surgicenter said in its application.
The outpatient center will lower the cost of care and improve the efficiency of local hospitals by shifting lower acuity and appropriate outpatient cases to nonhospital settings, allowing hospital surgical departments to focus on higher acuity, emergency and inpatient surgical cases, the 48-page application said.
The project proposes a unique partnership between Parkridge and Erlanger, along with practicing physicians. The doctors who practice in the new center would each own less than 5% of the business, according to the application.
"The collaboration between the two health systems allows them to take advantage of HCA's Ambulatory Surgery Division's experience in building and managing ambulatory surgical treatment centers and to share risk, cost and increase economies of scale to the benefit of patients and the community," the certificate of need application said.
The Tennessee Health Facilities Commission, the state agency that must authorize major hospital projects and expansions, could consider the request at its October meeting, pending a staff review.
If approved, the outpatient surgery center at 3745 Jenkins Road would be in the two-story office building U.S. Xpress originally built in 2006. The facility once was the headquarters for Transcard before the company was spun off and relocated to downtown Chattanooga.
U.S. Xpress vacated the building years ago and has consolidated its headquarters facility in Chattanooga at its main facility across the street on Jenkins Road, as many of its workers continue to work remotely or on hybrid schedules, company spokesperson Mary Fortune said.
"We haven't regularly used the building as a workspace for our teams in a few years," Fortune said in an emailed statement. "Our main headquarters building across Jenkins Road will remain home base for our in-person and hybrid work teams."
The property is among nearly three dozen properties in the Chattanooga market owned by Parkridge and its HCA affiliates, including hospitals, emergency facilities and physician office buildings, according to Hamilton County property records.
The new outpatient center is only a couple of miles from a new $18.5 million outpatient surgery facility opened last month by the Center for Sports Medicine and Orthopaedics on Tyner Road and is within 3 miles of Parkridge North, an emergency department facility at 7402 Lee Highway. When it opened its doors in October 2020, Parkridge North became the eastern-most emergency department in a county of nearly 370,000 people near the area's most rapidly growing suburban neighborhoods and several major employers.
The new Jenkins Road campus would also help serve the growing eastern part of Hamilton County and offer quick access off of Interstate 75.
Parkridge also plans to open a $15 million freestanding emergency room facility in East Ridge next month and is also building a similar $16 million emergency treatment facility in Soddy-Daisy, which is scheduled to open next spring.