St. Johns County’s growing population has local health care providers fighting for dominance (Courtesy of the Jacksonville Business Journal) — A generation ago, acute health care in St. Johns County was the sole realm of Flagler Hospital — the only hospital in the county after merging with St. Augustine General in 1991.
With most of the county’s development near the beaches and St. Augustine, it had adequate capacity to serve the general needs of a population that was around 125,000 in 2000.
More than 20 years later, the population has more than doubled, and the development has spread to every corner of the county. Now, a county that was until recently served by just one hospital is — thanks to growth, wealth and regulation changes — a battleground territory for some of the region’s biggest providers.
Chasing those thousands of new rooftops are health care giants like Baptist Health, Jacksonville Memorial and Ascension St. Vincent’s, which have all announced or built major facilities in St. Johns County.
At the same time, Flagler Hospital has rebranded itself as Flagler Health+ and is rapidly expanding to maintain its hold on the market.
“For us, to be able to continue to sustain what we’ve been doing for this 130-plus years, the growth is necessary so we can continue to reinvest in our economic mission — whether it’s deep investments in community behavioral health… (or) the work that we’re doing with Care Connect,” Flagler CEO Jason Barrett said.
“I have nothing but admiration and respect for these other folks, but we are going to compete.”
The ‘sudden’ surge
While the health care landscape has changed a lot recently, the changes didn’t come as a surprise to the long-term incumbent: Barrett said his organization’s plans have been well established.
Because of the way the county is growing in the north with large master-planned communities, First Coast health care providers — all of which, other than Memorial, are nonprofits — are establishing themselves in those neighborhoods.
Flagler has built health villages in Nocatee and Murabella to go along with its planned hospital in the large commercial development of Durbin Park.
Baptist has its own similar health park in Nocatee along with enough vacant land to add services as need increases. At the same time, Baptist is working on other county facilities at SilverLeaf, off State Road 16 and off State Road 207 near the interstate. It hasn’t announced specific plans for those developments yet.
Memorial has an ER facility in Julington Creek and will soon open a medical office park with various services on U.S. 1 in northern St. Johns County.
Ascension broke ground on a 56-bed facility off County Road 210 in December.
With so much activity from so many players in the industry, Flagler could have been pushed into obscurity had it not prepared for the increased competition.
“Competition is good for the consumer and we embrace it,” Barrett said. “We’re very excited about the growth. It’s not growth for growth’s sake. It’s growth for the sake of continuing to honor this mission.”
Jax-based growth
For providers with strong roots in Jacksonville, growing into St. Johns County also seems natural.
When Flagler opened at its current location in 1989, there were fewer than 100,000 residents in the entire county, and most of them were south of State Road 16 or clustered in the Ponte Vedra Beach area.
But now much of the population lives in the northern sector, and many residents already look north to Jacksonville for shopping and other services. So for health care providers, bringing new facilities to those people makes sense.
“When it comes to growth, we want to go where there’s a clearly demonstrated need for more healthcare options,” said Tom VanOsdol, president and CEO of Ascension Florida and Gulf Coast, in an email to the Business Journal. “St. Johns County is one of the fastest-growing counties in Florida, and our research confirmed that the community would certainly benefit from a new hospital that’s more conveniently located near them.”
Baptist’s neighborhood health care offices are similar to what Flagler has done. In fact, just like Flagler did in Murabella, Baptist partnered with the YMCA at its Nocatee facility.
Baptist Health Vice President of Business Innovation and Development Catherine Graham said getting into a growing community like Nocatee is great way to begin or continue relationships with patrons.
“We literally can grow with the community,” she said. “As the community grows and their needs change, they become more complex … we can adapt and grow with them.”
A demonstrated need for more providers
There’s no doubt the population growth in Northeast Florida warrants more health care options.
The University of Florida and the Bureau of Economic and Business Research’s annual population study, released in April, projects the population of St. Johns County will grow from an estimated 261,900 in 2020 to at least 287,000 but possibly as high as 381,000 by 2030.
Serving that growing population, though, would have been more challenging in the past. As recently as 2019, the competitors would have had a tougher time entering the market.
That changed when the state legislature altered the Certificate of Need process, opening the hospital industry to all comers. The decision in 2019 phased out some regulation for hospital projects like for acute care. The current law eliminates the certificate requirement for general hospitals, complex medical rehabilitation beds and tertiary hospital services.
While the state still have a Certificate of Need program administered by the Agency for Health Care Administration, the removal of most medical services from its purvey means that health care organizations now can operate and expand more freely.
That’s good for customers in places like St. Johns County with one of the highest median household incomes in the state at $82,252 (according to U.S. Census data).
But it might not benefit everyone equally.
“The sad reality of the repeal of Certificate of Need is you’re not seeing health systems rush to Levy County, Putnam County,” Barrett said. “And we have been long-standing providers in Putnam County because we’ve had a relationship. The people of Putnam County expect care from us.
“So the answer to why you’re seeing this influx is just that because it is lucrative for them to do so.”
It’s lucrative for Flagler to expand to the north, too. Patients with higher incomes are more likely to have health insurance and more likely to be able to afford services.
There’s no reason for Flagler to simply cede that territory to Jacksonville providers.
“It (Flagler’s Durbin facility, which is a partnership with UF Health) is intended to meet a (distinct) need,” Barrett said. “The intention isn’t just to build a big box store with no sense of identity. Any of the offerings that we provide will be deeply seeded in community need as well as our community mission.
“Our mission is to reinvest in ourselves to provide care. We don’t answer to shareholders, but we still have an economic mission.”
Other providers expanding into St. Johns County say they have similar missions. They might not have the same history of working in St. Johns County as Flagler does, but that’s because the need wasn’t there until recently.
It’s why Baptist, for instance, is targeting so many new communities. And it’s taking a strategic path, building its recognition with patients through primary care and wellness initiatives.
“What we’re done with is ‘We will build it they will come.’ That doesn’t work,” Graham said. “These campuses are built for a given community and what they need.
“We have to earn that business. We know people have options.”
Big business for the county
While increased competition might put more pressure on Flagler, Barrett is quick to recognize the overall benefits to St. Johns County from an economic standpoint.
He has previously served on the county’s economic development council and says growth in health care is good for the county.
For years, county commissioners have bemoaned the lack of tax base diversity, relying on residential property taxes for approximately 88% of general fund revenue.
But new health care facilities like what Flagler is building at Durbin and what other organizations are adding around the county bring in a lot of money, whether its property taxes or through payroll for the many jobs created.
Once the Durbin Park facility opens, it is projected to have 1,380 employees by its third year of operation. After five years, its total economic impact is estimated to be more than $1 billion.
“Health care is the type of industry you want: highly educated workforce, high wages, clean industry,” Barrett said. “We feel that our role as being here as the longest-standing provider is to help foster that.”
Photo courtesy of Downtown Vision