Fairhope Surgery Center Wins State Approval Despite Fierce Hospital Rivalry

State regulators have cleared the way for a new ambulatory surgery center on the Eastern Shore, overruling an administrative law judge’s recommendation and brushing aside objections from a coalition of prominent Baldwin County figures who had lined up against the project. The Alabama Certificate of Need Review Board voted 5-0 to approve University of South Alabama Health System’s application to build the free-standing surgical facility on the Mapp Family Campus in Fairhope, at the southeast corner of State Routes 181 and 104.

The vote caps months of regulatory wrangling between two of the region’s largest health systems and hands USA Health a significant foothold in a fast-growing part of Baldwin County. Local philanthropists Louis and Melinda Mapp donated the land for the campus last year, and USA Health has outlined plans for the surgery center alongside a medical office building and an educational component designed to train future healthcare workers.

The project drew swift pushback from Infirmary Health System, which operates Thomas Hospital in Fairhope and argued the new facility would siphon patients and revenue away from its existing Baldwin County operations. The list of people who wrote in support of Infirmary Health’s position included the outgoing mayors of Fairhope and Daphne, Baldwin County Sheriff Huey “Hoss” Mack, Regions Bank President and CEO John Turner Jr., automotive dealer Ty Thompson, and T. Bestor Ward, chairman of the board for the Alabama State Port Authority.

Earlier this year, administrative law Judge James Hampton sided with Infirmary Health’s objections, though he also found that USA Health had not demonstrated the substantial unmet public need typically required to win Certificate of Need approval. The Review Board’s unanimous vote effectively set that recommendation aside, siding instead with USA Health’s argument that Baldwin County residents need more convenient access to specialized medical care closer to home.

“This is an exciting day for all of us,” said Owen Bailey, chief executive officer of USA Health. “We will be able to bring to the people of Baldwin County the specialized healthcare services they need in a much more convenient location for them.” Plans for the Fairhope campus call for a broad slate of services, including primary care, pediatric specialties, pulmonary medicine, gastroenterology, orthopedic surgery, urology and imaging.

Bailey said the project fits into USA Health’s broader mission of training the next generation of medical professionals. “The entire project also allows us to train more members of the next generation of healthcare providers on not only some of the most sophisticated technology available in healthcare, but also in the interpersonal skills that are so important in providing high-quality care to our patients,” Bailey said.

“We are very grateful to have the support of the CON Review Board on this project that will help transform medicine in our area.” The Certificate of Need process exists in Alabama and many other states to regulate how new healthcare facilities and services enter a market, with the goal of preventing unnecessary duplication of costly medical infrastructure.

In a separate action during the same meeting, the Review Board also signed off on USA Health Children’s & Women’s Hospital’s plans to significantly expand and renovate its Pediatric Emergency Center.

The project will more than double the department’s footprint, growing from roughly 9,000 square feet to nearly 19,000 square feet, while increasing the number of treatment areas from 14 to more than 30, including 25 private treatment rooms. The expanded center will also add two behavioral health rooms and a sensory room aimed at improving care for patients with specialized needs, along with more space for parents and caregivers to stay with children during treatment.

“This will be the first major renovation of our pediatric emergency center since its initial construction in 1997,” said Chris Jett, administrator for Children’s & Women’s Hospital. “Not only has the demand for our services grown with the population of the region, but the space requirements associated with the delivery of the high quality of care we are known for makes this expansion even more important.” USA Health officials say the pediatric emergency expansion will also strengthen training opportunities for emergency medicine residents, medical students, nurses, nurse practitioners, physician assistants and other allied health professionals who rotate through the hospital.

Construction on the pediatric emergency department renovation is expected to begin in early 2022 and wrap up by mid-2023. The project carries an initial estimated cost of $15 million for renovation, construction and equipment, with USA Health reporting it has already raised nearly $10 million toward that total through donations.

With state approval now in hand for the Fairhope surgery center as well, USA Health is positioned to move forward on both fronts, expanding its footprint in Baldwin County.

How Certificate of Need Works

In Alabama, the Certificate of Need program is administered by the State Health Planning and Development Agency. In contested cases, an administrative law judge can hear the dispute first and make a recommendation, but the CON Review Board makes the final decision and may accept or reject that recommendation, as it did here.

Related coverage from South AL News

• Thomas Hospital Proposes South Alabama's First Free-Standing ER in Daphne
• USA Health breaks ground on $14 million freestanding ER in west Mobile
• Photos Show Construction Progress at Thomasville Regional Medical Center After $2.9 Million Grant
• Infirmary Health Launches Appointment-Only COVID-19 Testing Sites in Baldwin County